Analyzing Innovation and Commercialization in Amazon Go's Development

This report provides an in-depth analysis of innovation and commercialization strategies, using Amazon Go as a case study. It differentiates between invention and innovation, highlighting the importance of innovation for organizations like Amazon Go. The report explores how organizational vision, leadership, culture, and teamwork contribute to innovation and commercialization. It also explains the 4Ps of innovation (Product, Process, Position, and Paradigm) and applies the innovation funnel concept to Amazon Go. Furthermore, the role of frugal innovation in Amazon Go's development is critically evaluated, emphasizing how it addresses constraints related to institutional, financial, economic, and social factors. The analysis concludes by underscoring the significance of both invention and innovation in achieving business growth and a competitive edge in the global market.

INNOVATON AND COMMERCIALIZATION
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Table of Contents
Introduction................................................................................................................................3
LO 1...........................................................................................................................................4
P1 : Explain the difference between invention and innovation and determine the importance
of innovation in comparison to invention in organizations like Amazon Go............................4
P2 : Explain how organizational vision, leadership, culture and teamwork can develop
innovation and commercialisation.............................................................................................6
LO 2...........................................................................................................................................8
P3 : Explain the 4P's of innovation and apply innovation funnel for Amazon Go...................8
P4. Explain and critically evaluate the role of Frugal innovation in development of Amazon
Go.............................................................................................................................................11
Conclusion :.............................................................................................................................12
References :..............................................................................................................................13
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Introduction
Business development and growth in recent times is dependent on the ability of the company
to think of new ideas, and implement them in an effective way so that, customer needs are
met and the company can maximize its profit margins. n the extremely competitive global
market, company's won't be able to survive and make a mark without constant innovation and
invention and proper use of marketing strategies that can attract customers. This makes
innovation and commercialization the need of the century.
The chosen company in this study is Amazon Go. This study focuses on comparing
innovation with invention and the need of innovation and commercialisation in recent
times. Innovation funnel and Frugal innovation which are the strategies used in the
development of any organization are also key elements of this study.
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LO 1
P1 : Explain the difference between invention and innovation and determine the
importance of innovation in comparison to invention in organizations like Amazon Go.
Invention and Innovation both are key elements in the foundation of any business
organization. Though both are mistaken to be the same, they differ significantly in meaning
when it comes to the idea of business.
Invention refers to a creative idea that can be applied in any business organization to
manufacture a different product, or to alter the processes involved in production so that it
requires minimum time and manpower, both of which brings increased amounts of revenues
to the company (Aleve et al., 2017). In context of the case study mentioned, Amazon has
opened corner stores which allow the customers to pick up their groceries just while passing
by , without having to wait for hours in the long queue, which saves a lot of the customers
time in today's fast moving lifestyle. This invention will increase the Amazon's customer
spectrum, and increase the company's profit margins.
Innovation on the contrary refers to the application of innovation which results in a the
production of a new product ,process of service, which is not only practical and economically
viable but benefits the customers and brings in huge profits to the company (Basaiawmoit, et
al 2017). Another Very important factor for innovation is that it has reproducible at a low
cost. Amazon Go is a successful innovation because it keeps in mind the needs of the
consumers and economically viable for the company which brings it high amounts of
revenues.
The differences between invention and innovation are summarised as follows:
PROPERTIES INVENTION INNOVATION
DEFINITION Invention refers to a creative idea
involved in the manufacture of a
completely new product.
Innovation refers to the
application of a creative idea
to produce a new product, or
to improve an existing
product, process or service.
REQUIRED SKILLS Mostly requires scientific thoughts
and ideas
This requires marketing
strategies, technological
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information, and also
understanding the needs of
the customer and the goals of
the company
OCCURENCE This occurs when a creative idea
strikes the company's leaders or
employees
This is mainly needed to
meet the goals of the
company and to maximize
profit margins, by improving
on an existing product or
process involved
FOCUSES ON The main focus is development of
a new product or service
The company needs
innovation then and now to
improve on all its products
and services
DEPARTMENTS
INVOLVED
The Research and Development
department of the company mainly
performs this job.
Usually all the departments
of the company are involved
in the process of innovation.
Table 1: the differences between Invention and Innovation
(Source: Create by the Learner)
Thus, Amazon needs both invention and innovation to achieve greater heights in the global
market. The corner stores of the company are a result of successful invention by the
company, which is already attracting many customers. Again improving its existing products
by using various innovative ideas will further maximize its profits. For example the company
can sell imported grocery items, at its corner stores, and also give offers like buy 1 get 1 free
to grab the attention of customers.
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P2 : Explain how organizational vision, leadership, culture and teamwork can develop
innovation and commercialisation.
Innovation and commercialization form the foundation of any business organization. Every
company has its specific needs of innovation in accordance with the goals of the company.
Organizational vision, leadership, culture and teamwork play key roles in the development of
innovation and commercialization of a company (Bosworth et al., 2017). The following
summarises how these factors shape up the innovation and commercialization used by the
organization:
Organizational vision: Every Company has its own sets of aims. The kind innovations
needed by the company must align itself with the goals of the company. When a company
needs to choose from a bunch of innovative ideas, it as to decide which idea is best fitted to
fulfil its vision (Finn, 2017.). The main of Amazon is to meet the needs of the consumers in
this fast-paced lifestyle and at an affordable price so that it can target a large number of
customers and at the same time maximize its profit margins. These corner stores serve both
these purposes as the customers can pick up grocery on the go at and make payments through
Amazon prime, which saves even more time for the consumer. Thus, this innovation is
serving the purpose of the company.
Leadership: Recent researches show that, that according to the senior leaders of a company
the major driving force for a company growth is innovation. Innovation, leads to evolution
and hence growth of a company. The more the number of creative leaders, the more the
company will be able to bring in newer products and processes that minimizes the production
time and labour costs and maximizes profit. Innovations in marketing and management
strategies are also the key aspects to attract more customers (Fleming et al., 2017). The
Leaders of Amazon have been creative enough to form the corner stores, which are a definite
boon to the company in terms of increasing revenues and improving its position in the global
market.
Culture: The work culture and ethics of the company has a great impact on the innovation
and commercialisation of the company. A healthy work environment allows sharing of
different ideas among the employees and suggesting that to the management, who can further
work on the ideas to effectively implement it for the betterment and growth of the
organization (Germain, 2017). On the other hand, an unhealthy work culture or an extremely
strict work environment restricts the sharing of ideas among the individuals. Thus a healthy
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work culture in Amazon, which is promoted by the fact that they are allowed to share the
reviews on the first purchase of the product, will further promote Innovation and
Commercialization.
Teamwork: Innovation and commercialization is shaped to a great extent by its employees.
A good work culture and hard working employees is the key to the success of any
organization. Every employee should contribute their ideas, all of which should be considered
by the management before implementation of the same (Guo and Ding, 2017). This will lead
to maximum growth of the company and help it to maximize revenues. The company must
also consider various marketing strategies suggested by its employees to achieve maximum
commercialization of it products. This is because different employees come from varied socio
economic backgrounds and hence are a reflection of the varying needs of the customers and
thus will suggest promotion strategies that will result in maximum commercialization.
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LO 2
P3 : Explain the 4P's of innovation and apply innovation funnel for Amazon Go
Innovation mix, which comprises of the '4P's of innovation' namely 'product', 'process'
'position' and 'paradigm' are the key factors in the development of any company. Each of
them are summarised are as follows:
Product: This is the most important innovation in any business organization. To survive in
the extremely competitive market in recent times the company's need to constantly evolve,
therefore produce different kinds of products .Implementing various creative ideas and
manufacturing or bringing in new products and services are the key elements in a company's
growth (Hamilton and Hamilton, 2017). Amazon has formed these corner stores in order to
target customers in this fast-paced lifestyle. It can also begin selling imported products from
these stores, to grab the attention of the customers, as they will be interested to have a look at
the products from different regions of the globe.
Process: The next important element after product is process. This refers to innovation in the
manufacturing process that will cut down on time, labour and cost, or an alteration in the
marketing strategies that will lead to better commercialization of the products (Holt-
Giménez,, 2017). The company has made payments easier for the customers as they can now
make payments using Amazon prime, instead of standing in long queues and thus an
alteration in the process of payment serves as an important marketing strategy for the
company. The company can also think of having home delivery services to promote its
business.
Position: This refers to the innovations that will help the company to achieve a better
position in the global market (Khoobiyan et al., 2017). The more customers the company
attracts and the more it can satisfy its employees, the better will be the revenues it can bring
and hence achieve greater heights in the global markets. Amazon go is targeting at improving
customer relations and on the other hand, the employees are welcome to share their reviews
after the first purchase from Amazon go , which aims at improving employee relations and
thus helps the company to achieve a better position in the global market.
Paradigm: This refers to the designing the products or services keeping in mind the needs of
the consumers (McCormick, 2017). Amazon has identified that most of its customers lead an
extremely fast paced lifestyle and thus they designed Amazon go whereby customers can
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pick up groceries on the go and make payments through Amazon prime and thus serving its
customers to the best of its capabilities.
Figure 1: 4P'S INNOVATION
(Source: Niemann, 2017)
An Innovation funnel has a very similar shape as of that of a real life funnel with a wide
mouth and a narrowing segment ending in a narrow bottom.
The wide mouth: At this stage, the company gathers a lot of ideas and information, from
various sources, such as journals, online websites and employees. Amazon must have
collected a lot of ideas from various sources to finally design Amazon go.
The narrowing segment: At this stage, the company chooses one or more ideas from a
bunch of them, which is best suited to fulfil its visions (Niemann, 2017). After conducting
various surveys, the company realised that most of its customers lead fast-paced lifestyles, so
designing Amazon go will help it achieve its goal of targeting an enormous group of
customers.
The narrow bottom: This is the stage where the company implements the best-suited ideas
to create an innovation, which will maximize its revenues and help it achieve a better position
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in the global market. Amazon Go has finally been developed, which serves the needs millions
of consumers leading a fast life on a daily basis.
Figure 2: INNOVATION FUNNEL
(Source: Yun., 2017.)
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P4. Explain and critically evaluate the role of Frugal innovation in development of
Amazon Go.
The development of business under constraints of various factors, which include institutional,
financial, economical and social factors, is referred to as frugal innovation. Frugal
Innovations not only enable business organizations to develop under these constraints but
also keep the pricing of its products such that it is affordable by not so affluent strata of the
society (Stephany Filho, 2017). Frugal innovations are the need of the century as it also
ensures that minimum raw materials are used for maximizing production and profits, which
thereby ensures sustainable development.
There are 4 basic steps involved in the development of frugal innovations which are
explained as follows:
Identification of frugal innovations: The company conducts thorough study of the different
frugal innovations taking place in different parts of the world using various websites,
magazines, journals and conducting surveys to have an idea of the customer demands
worldwide, so that it will be easier for design its innovations.
Problems related to frugal innovations are identified : This refers to the identification of
various constraints , so that the company can formulate its products and services to eliminate
these problems( Aleven, 2017). For example, time is a huge constraint in this fast paced
lifestyle which was identified by Amazon.
Development of solutions to the problem : This refers to the development of ideas and
implement them in such a way that it can eliminate the identified problem (Finn, 2017 ).
Since the company could identify time as a huge constraint for its customers, it designed
Amazon Go, which enables its customers to pick up products on the go and make payments
through Amazon prime instead of standing in long queues.
Aligning the problems with the solution : Matching the solutions with the corresponding
problems and the goals of the company and implementation of the same, is the purpose of
this step (Holt-Giménez, 2017). Amazon Go was implemented, which now serves the daily
needs of millions of customers who lead a fast life.
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Conclusion :
From this study it can be concluded that innovation and commercialization, are the need of
the century and every organization needs to constantly invent and innovate to evolve in the
competitive market environment in the recent times. The growth of a company and its
position in the global market is dependent on its ability to use its ideas to meet the consumer
requirements to the best of its capabilities. A company to strategically implement its ideas to
meet the consumer needs while maximizing profits uses an innovation funnel. Frugal
innovations on the other hand enable a company to develop its business under certain
constraints and promote sustainable development
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