Managing Innovation in Business: ASDA's Innovation Audit Report

This report provides an in-depth analysis of ASDA's innovation strategies, covering its past, present, and future initiatives. It begins with a company overview, highlighting ASDA's history and market position as a leading British supermarket retailer. The core of the report is an innovation audit that examines key aspects such as innovation strategy, idea generation, prioritization, organizational culture, and output. The audit details ASDA's past efforts to improve transportation costs through advanced software and its present adoption of 360-degree laser checkouts to enhance customer experience. The report also explores future innovations, including the implementation of parcel vending machines and advancements in online capabilities. By analyzing these aspects, the report offers a comprehensive understanding of ASDA's approach to innovation and its strategies for maintaining a competitive edge in the retail market.

MANAGING INNOVATION IN
BUSINESS

Table of Contents
INTRODUCTION ..........................................................................................................................1
Company Overview ........................................................................................................................1
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The term “Innovation” refers to the procedure of translating an invention or idea into a
product or service that creates value for end-user or for which consumers are willing to pay. For
businesses, this could mean employing new ideas, improving existing services or creating
dynamic products (Andriopoulos and Lewis, 2010). It act as a catalyst for business growth and
success and help firm to grow and adapt in the marketplace. The given report is based on ASDA
which is a leading British Supermarket Retailer. Main purpose of this report is to cover past,
present and future innovation capabilities and activities of given firm through conducting
innovation audit.
Company Overview
ASDA is globally renowned British supermarket retail merchant, since 1965. It is
founded by Fred and Peter Asquith. Besides its core supermarkets, the organization also deals in
providing number of other services including financial and mobile services. In 1999, it become a
subsidiary of Walmart which is an American retail giant. Today, ASDA falls in the category of
most -well and reputed brands of UK. Currently, it operates in more than 25 countries with over
642 stores all across the world.
Innovation Audit
Before we undertake the innovation journey of ASDA, it is better to know from where we
are starting. Thus, an accurate and genuine assessment of company's innovation, creativity and
agility capacity is necessary. An innovation audit take a glance at various issues to perceive what
is functioning well and what is obstructing development or innovation in the business. The
primary objective of this audit is to identify the exact strength and weakness of company's
innovation practices & processes and also to discover best possible ways to improve overall
performance. Five key aspects of innovation audit are discussed below:-
1. Innovation Strategy: It include to what extent the innovation strategy is effective, clear
and communicated (Seebode, Jeanrenaud and Bessant, 2012). But before developing
strategy, it is important to identify what key problems were overlook by company and
how it can be solved through embedding innovation.
Past ASDA has gained popularity for its innovative practices & consistently tried
to bring new technology into its business model. During 2012, ASDA faced
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several issues like increased cost of transportation, high use of fleets and
drivers which adversely affected it's overall operations and logistic
department.
Present The retail market is changing and that too at a faster rate. This enable ASDA
to embed innovation in its existing business process model.
Future Strong competition is growing in retail industry which makes ASDA to do
frequent innovation in their businesses so as to attain high competitive
advantage in the market place.
2. Idea Generation: It define the extent to which there is positive and collaborative approach
towards developing customer-centered ideas (Lundstedt and Colglazier, 2013). This
means idea generated by firm must provide high level of satisfaction to customers.
Past Considering the problem aroused in 2012, idea is generated by ASDA
keeping in mind to improve its delivery process so that goods can be reached
on time. The idea generated must utilise vehicle and driver resources in an
effective manner. During 2012, company projected to improve its supply
chain operations so as to delivered transport efficiencies for supermarket
giant. As a result, overall transportation cost of goods were reduced by using
advanced map-based transport optimisation software. This system provide
better routes & make use of drivers and fleet more efficient. Paragon's Multi-
Depot software is strategically used by ASDA to precisely design routes of
delivery and use of vehicles across its twenty two depots. By encouraging
transport efficiency in this manner, ASDA had a chance to reduce road miles
via enhanced use of its 1600 trailer units and more than 1000 fleet of tractor
units.
Present In order to cope up with present situation, ASDA must focus on meeting
customer requirement in a structured and thorough manner. Here the idea
generated must provide high level of satisfaction to end-users. Presently,
ASDA is trying 360 degree laser check-out at its Yok Store so as to provide
convenient shopping experience to its target consumers. The new check-out
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system called Rapid Scan is introduced by ASDA who very easily picks up
bar code from every angle, moving belt and cameras. At a moment, it scan
more than 100 products in a minute and it is 3 times faster than manual
scanning. Every customer wishes to save maximum amount his/her time
while doing shopping. By fulfilling this desire of customer, ASDA become
the first one to invent this amazing machine to its shoppers.
Future For anticipating future projections, ASDA must improve its online capacities
related with a new cutting edge technology. Along with this, company needs
to focus on monitoring all interaction and traffic on its global website i.e. 24
hours a day, 7 day in a week. ASDA will become the first one to install
parcel vending machine in United Kingdom. Taking the advantage of high
end technology, company has decided to implant automated parcel vending
machine. It is 8ft wide and 16 ft tall that can hold up-to 500 parcels at a time.
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Simultaneously it allow customer to collect online order as well as take
returns. In future when customers visit ASDA store, they can simply scan a
product barcode sent to their smartphones at the Parcel Tower and gets it
order within 60 seconds. In-fact for capturing high market share, company
has decided to provide its service to third party partners as well such as
Decathlon, Missguided and Asos. By implementing this service, ASDA aims
to increase its per day customer visits by 40 million by 2019.
3. Prioritisation: It define the extent to which most suitable ideas are selected for
implementation (Tschirky and et. al., 2010). There are many ideas generated by company
but selecting most appropriate and suitable among them is a challenging task.
Past The innovative software used by ASDA is Multi-Depot (part of Paragon
Software System). With the application of this system, company aims to
provide benefit to both customers and environment. Using fleet capability in
an optimum manner results in decreasing vehicle emission and fuel usage. In
total, 5-10% of transportation cost were saved by implanting this software.
Further, the cost was re-invested into the business to reduce overall costs to
shoppers. ASDA not only able to minimise its capital expenditure with the
application of this system but also use existing resources in a cost efficient
manner.
Present In this competitive era, every company aims to deliver best product or
services that gives high satisfaction level to its target consumers. Taking the
advantage of this, company aims to provide convenient shopping experience
to its end-users by implementing 360 degree laser check-out system.
Knowing the fact that shopping habits of consumers are constantly changing
i.e. people are looking & shopping around for greater convenience that
ultimately saves their time, efforts and energy. By using high end
technology, ASDA ensure a smooth shop for its potential buyers.
Future ToYou (Innovative Parcel Delivery Option) will act as a game changer in
forthcoming period. Interest for internet shopping is consistently expanding,
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with it develops the hunger from online retailers to have physical
impressions their clients can get to. With this, ASDA bridges the gap
between consumer who what to return or collect their online orders while
carrying out their weekly shop. Also it gives a reason to customer to visit
ASDA stores.
4. People and Organization: It define to what extent is there a innovation culture(Gillier and
et. al., 2010).
Past In 1979 barcode system was added to organisation which helped to track the
quantity and volume of inventories. This was also the part of key marketing
in Spalding, Lincolnshire and market changes. This was the easier option in
terms of managing the order level, sales targets, level of recording the
structure, improving the stock and management with in the organisation.
Clubcard facility was also one of the customer attractive and exploring factor
of retail culture in world wide in past decades. It develop the purchasing and
investing power of customer and motivate them towards purchasing the
goods and getting discounts and memberships. ASDA also started attractive
schemes and offers to enhance the sale graph and purchase power of
customers.
Present There are a revolutionary changes seen in terms of innovation and cultural
change in retail sector. ASDA is one of the retail sector organisation which
also adopted some innovative changes in terms of exploring and emerging
the business structure at next level. At present ASDA is adopting artificial
intelligence, online trading and exporting goods and services to enhance the
digital marketing. There are efforts were putted by ASDA in the direction of
putting customer interest first and enhance the basic structure at next level.
Future Technology has been shaping and disrupting traditional retail models for
decades. There are new dimension and innovative changes are to be
implemented in ASDA as introducing advanced customer support system,
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effective search engine and analytical tool for filter quality products are the
main innovative changes to be done in proper manner. Local based
marketing technology, virtual reality, personalised promotion, virtual
mirrors, Haptic technology are the upcoming innovations which are to be
implemented by ASDA.
5. Output: It describe to what extent the number of new goods and services developed are
sufficient enough (Nambisan and Sawhney, 2011).
Past In total, there were 21 depots of ASDA all across the globe covering main
region including North East, North West, South East, South West and
Midlands. It is obvious to have issues related with transportation when
company is operating with such large fleet. In order to overcome these
issues, ASDA optimise its supply chain operations by transforming its routes
and logistics. However, the system used proved to be effective for the
company as it was in total saving 5-10% of total fleet cost of transporting
products to stores. In-fact it comes out as a major success for ASDA in terms
of reducing capital expenditure via better and optimum use of driver and fleet
availability.
Present With the application of 360 degree laser checkout, ASDA is collectively
saving time, efforts and energy of its end-users. This has the make the
process of shopping easier and convenient for customers. Presently, ASDA is
the only store in UK that is using this technology. Shoppers only need to
unload their items onto the conveyor belt, then groceries are scanned through
to bagging. This makes the check out time three times more faster than
manual scanning. Additionally, it also improve the overall efficiency and
performance of company and enables them to gain high competitive edge in
the market place.
Future ToYou ASDA's latest parcel delivery service is going to provide high
competitiveness level to company in forthcoming period. It has been
estimated that by implementing this system, ASDA will be able to increase
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40 million extra visit of customers per year. Along with this, projected profits
going to be increase by 1.5 billion on annual basis.
CONCLUSION
According to above mentioned report, it can be concluded that success and growth of any
firm depend upon how effectively it fulfil diverse needs and requirement of customers. For
sustaining long term in market & gaining high competitive edge, it is important to do innovation
on constant basis. Before embedding innovation, it is important determine exact strength and
weakness of firm by conducting Innovation Audit. Along with this, past, present and future
innovation capabilities of chosen organization is also taken into account which further indicates
how company improvize its operations and performance via undertaking innovation.
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REFERENCES
Books and Journals
Andriopoulos, C. and Lewis, M.W., 2010. Managing innovation paradoxes: Ambidexterity
lessons from leading product design companies. Long range planning. 43(1). pp.104-122.
Seebode, D., Jeanrenaud, S. and Bessant, J., 2012. Managing innovation for sustainability. R&D
Management. 42(3). pp.195-206.
Lundstedt, S.B. and Colglazier, E.W. eds., 2013. Managing innovation: the social dimensions of
creativity, invention and technology. Elsevier.
Tschirky, H. and et. al., 2010. Managing innovation driven companies: approaches in practice.
Springer.
Gillier, T. and et. al., 2010. Managing Innovation Fields in a Cross‐Industry Exploratory
Partnership with C–K Design Theory. Journal of product innovation management. 27(6).
pp.883-896.
Nambisan, S. and Sawhney, M., 2011. Orchestration processes in network-centric innovation:
Evidence from the field. The Academy of Management Perspectives. 25(3). pp.40-57.
Bieraugel, M., 2015. Managing library innovation using the lean startup method. Library
Management. 36(4/5). pp.351-361.
Lundstedt, S.B. and Moss, T.H. eds., 2013. Managing innovation and change. Springer Science
& Business Media.
Den Hertog, P., Van der Aa, W. and De Jong, M.W., 2010. Capabilities for managing service
innovation: towards a conceptual framework. Journal of service Management. 21(4).
pp.490-514.
Wang, C.J. and Tsai, C.Y., 2014. Managing innovation and creativity in organizations: an
empirical study of service industries in Taiwan. Service Business. 8(2). pp.313-335.
Talukder, M., 2014. Managing innovation adoption: From innovation to implementation.
Ashgate Publishing, Ltd..
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