ASDA's Mobile Phone Launch: A Business Innovation Report (ICN)

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INNOVATION & COMMERCIALISATION-(DISTINCTION) (ICN)
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Executive Summary
The report is based on the innovation process of Business Company for introducing
their new products in UK market. ASDA Store Ltd has focused in this report for
differentiate the concept of innovation and invention in relation to business companies.
The discussion has stated about the new product launch of this company in UK market
by which they can increase their competitive level in relevant manner. On the other
hand, 4 P’s of innovation has discussed in this part to shed length on different elements
in which companies can introduce their innovation strategies. Furthermore, an
innovation plan has represented in which ASDA company is planning to launch mobile
phones with the name of their brands. Moreover, this has focused on the frugal
innovation process in relation to the commercial funnel of innovation. Furthermore,
different tools have given which help companies to protect their intellectual properties
and knowledge from any illegal matter.
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Table of Contents
Introduction...................................................................................................................... 4
LO1 Determining the difference between invention and innovation.................................4
P1: Explaining the importance of innovation in comparison to new invention in the
company....................................................................................................................... 4
P2: Role played by organizational goal, leadership, teamwork in shaping
commercialization.........................................................................................................5
M1: Analyzing the sources of innovation and ways to develop an innovation
environment..................................................................................................................6
LO2: Briefing about different types of innovation.............................................................6
P3: 4Ps of innovation and innovation funnel to develop innovative ideas.....................6
M2: Application of innovation funnels in relation to company.......................................8
P4: Development phases of frugal innovation and how can it be used in company
context.......................................................................................................................... 8
M3: Role played by frugal innovation in company.........................................................9
D1: Critical analysis of development of innovation in company....................................9
LO3: Process of commercializing innovation.................................................................10
P5: Importance and application of commercial funnel in respect to new product
innovation................................................................................................................... 10
P6: Building an innovation business case for an organization....................................11
M4: Building a detailed innovation business case including techniques to measure
and improve................................................................................................................ 12
LO4: Evaluating range of methods to protect new ideas................................................12
P7: Different tools used to develop retain and protect intellectual property and
knowledge...................................................................................................................12
M5: Evaluating the use of these tools in context to wider business............................13
D2: Evaluation of nature of innovation and measures to company to overcome
challenges...................................................................................................................14
Conclusion..................................................................................................................... 14
Reference list................................................................................................................. 16
Appendices.................................................................................................................... 17
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Introduction
Innovation refers to a system of adding value to a particular good or service so that it
provides better services to the consumers for which they will pay. As opined by Dereli
(2015), innovation is an important economic tool for a business as it helps in the growth
of a particular business quality wise. The assignment is mainly done to analyze the
present retail market scenario of UK in terms of profitability and potential market
competitiveness and accordingly, it would help the ASDA stores Ltd. to develop
strategies and analyze the product value of their new innovations before they launch
any new product in the UK competitive market.
LO1 Determining the difference between invention and innovation
P1: Explaining the importance of innovation in comparison to new invention in
the company
Invention refers to the creation of a new product or services that have not been created
before whereas Innovation is concerned with the development of new idea or product
that is present from before. As opined by Bertoni and Tykvová (2015), innovation is
much more concerned with improvement of quality whereas invention is all about
designing and creating new things. Innovation generally takes place when there is a
need for specific improvement of the product or service whereas Invention takes places
whenever a new idea strikes in the mind of an inventor.
ASDA Stores Ltd is a supermarket store operating in UK. The store mainly deals with a
variety of goods ranging from food items baby products, clothing, home products to
electric appliances and even mobile phones. Although the store deals in mobile phones
belonging to various renowned companies like Samsung, Vodafone and Nokia it doesn't
have any mobile phones with its own brand name. The company has recently thought of
launching its own cell phones handsets in the UK market (Asda.com, 2019).
This would create a lot of scopes for the company to increase its profit margins.
Introducing new handsets would help the company in its promotion because when a
new product is launched, the local newspapers generally publish the news which helps
people to know about the company. This attention thereby helps in increasing its new
customer base and more sales of its products. Besides by launching its own cell phone
handsets, the company could also enter into the telecommunication market of UK and it
might also enter into a partnership business with other leading mobile companies of UK
like O2, BT. launching of new mobile handsets would help the company to gain more
reputation in the market. For example, if the sales of the mobile handsets launched by
the ASDA store becomes high then it would automatically gain a good reputation in the
telecommunication market of UK and in turn might prove to be a tough competitors for
the leading mobile companies like BT, Vodafone.
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P2: Role played by organizational goal, leadership, teamwork in shaping
commercialization
Commercialization is the system of introducing new products and services to the
market. Commercialization of products involves a series of task which includes
developing sales strategy, conducting market campaign, consulting with responsible
distributors, developing appropriate pricing strategies.
● Organizational Vision
The ASDA Company aims to become the best retailer company in UK that always deals
in products that can cater to their consumer needs. It also focuses on providing quality
products to its customers and providing products at an affordable cost. In the upcoming
years, the company also aims to increase its business base (Asda.com, 2019).
● Leadership followed
The company takes pride in counting itself among the topmost retailers in UK.
According to the company starting from the founders to the employees, all are
concerned with providing value-added and affordable products to its consumers.
● Organizational Culture
As opined by Osoro et al. (2017), The Company’s organizational culture is the most
effective framework that helped in its growth in recent years. The company aims to
follow an ethical business process thereby providing its consumer's value-added
products. The company also trains its employee to maintain a good relationship with its
consumers as well as the stakeholders as they are the vital resources.
● Teamwork
Team coordination is essential to complete a wide range of work associated with the
retail industry. Zastempowski and Przybylska (2016) suggested that lack of proper
coordination within the team members can slow down the business processes thereby
leading to losses. ASDA Company aims to maintain a friendly working environment that
would help in increasing the company's sales.
Analysis
For the successful launching of the mobile phones of the ASDA Company, it is
necessary that the company follows its basic goals. The company should try to
manufacture mobile handsets that are advanced and have high values similar to the
handsets of the other mobile companies available in the market. Besides, the company
should also try to keep the cost of the mobile average so that it can be affordable by all
consumers. A company's organizational culture plays an important role in determining
its success level. As for ASDA Company, it should try to maintain a good relationship
with its stakeholders before the launching of its new product in order to make the entire
launching process a great success. According to Davoudi et al. (2018), team
coordination is very essential to carry out any business process. During the launch of
the new mobile handsets, all the team members of the ASDA Company should try to
cooperate and coordinate tasks. The employee base of the company should not only be
technically skilled but also should be flexible to work in any environment. The
coordination of all these above-mentioned factors would help the company in the
successful launching of its mobile handsets.
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M1: Analyzing the sources of innovation and ways to develop an innovation
environment
Recently the company has taken initiatives to introduce its own range of mobile
handsets. There are many sources through which the company gets the strength to
bring in new innovations are:
Market Structure: The ASDA Company has an oligopoly type of market structure. An
oligopoly market structure involves the few firms that dominate the entire market. As for
the ASDA Company it has high economic scales that often deter the growth of its
potential rivals like TESCO, SAINSBURY PLC (Asda.com, 2019). Secondly, the
company also takes initiatives to bring out new innovations through the huge amount of
revenue that it has. The market strategy of ASDA is to sell their products at low prices
which allow them to gain more profit.
Industry: The supermarket business in UK has grown in recent years. As for ASDA
company, it is online operations have helped the market to gain additional revenue.
Demographics: The main goal of the ASDA Company is to launch products keeping in
mind the taste of the customers. Considering the statistics of 95% mobile phone users
who are aged from 16 to 24, the company also takes up initiatives to change its
production process in accordance with the changing customer needs [Refer to
appendix 1].
New Knowledge: ASDA Company has always tried to bring about new innovations in
its business structure. For example, in recent years, it has collaborated with University
Of Leeds to ensure the development of green and sustainable products that would help
to save money of the customers with least environmental impact.
The presence of a large customer base, firm market structure, and adequate revenue
resources has helped the company to carry out its mission of launching its own mobile
handsets.
LO2: Briefing about different types of innovation
P3: 4Ps of innovation and innovation funnel to develop innovative ideas
ASDA Company has high competition level in their business from other supermarkets of
UK markets such as Waitrose, Tesco, ALDI, Morrison, and several others. In this
context, their company can innovate some new products and services for their
customers which can help them to get competitive advantages. However, in accordance
to Akgun et al. (2017), innovation can be applied to any factors of business companies
which help them to improve in the performances. In relation to this, 4 P's of innovation
has four different factors such as process, products, Paradigm, and position.
Process
Innovation in process is related to making of products or delivery process of the
services and products to other people. As opined by Zastempowski and Przybylska
(2016), selling, recruiting, supplying, and accounting process can improve by innovation
by business companies. In this context of ASDA Company, there are different
processes they are applying in their business process. Moreover, this company
provides their services and products in both online and offline mode to their customers.
Products
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This is related to the products and services of companies in relation to the innovation
process. This has seen that most companies focus on products innovation process in
addition (Akgun et al. 2017). In relation to the ASDA Company, there are several
products this company provides to their customers as like other supermarkets.
Moreover, this increases their competition level in the UK market.
Paradigm
Paradigm is related to any system of business companies. This has seen that
customers can buy their products from physical store of ASDA Company as well as
from their online platforms as well. Moreover, as stated by Laužikas et al. (2016), radical
changes in paradigm of business can affect business organizations in both positive and
negative manner. Changes in products and any kind of system can affect negatively to
people who are reliable with the previous system.
Position
This factor of business organization helps companies to gain proper market share.
Moreover, Osoro et al. (2017) argued that position can refer to as some relevant
element of business companies in competitive market. Moreover, this is related to
perception of customers as well. In this case of ASDA Company, the position can refer
to as one of specific factors for competition with other similar supermarkets.
Figure 1: 4 P’s of Innovation
(Source: created by author)
Innovation funnel
Innovation funnel can be stated as one of the models for business companies which
used for evaluation of ideas for new products. As opined by Dereli (2015), there are
several factors which business companies need to focus at time of innovation of new
products. Idea development is the first step for any innovation process. Business
companies can gain ideas of innovation from their teams in relation to their products,
process, paradigm, and position as well. The development of concept has two different
steps which are scoping and discovery. Discovery helps business to gain knowledge
about market in relation to new products. Furthermore, scoping is related to increment
in business factors. Furthermore, launching concept has four steps such as establishing
case of business, development of innovative products, validation, and testing and the
last step is launching the products in market.
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Figure 2: Innovation funnel
(Source: Created by author)
M2: Application of innovation funnels in relation to company
This has seen that demand for mobile phones is increasing in global market and ASDA
Company can take innovative approaches for launching new mobile phones in their
business. In the context of idea development, ASDA Company can take several ideas
from their employees regarding creating new handset for their customers. In
accordance to Zastempowski and Przybylska (2016), the development of concept can
be done with the market research and interest of customers for new technologies.
Moreover, other supermarkets of UK market are creating new ideas for several
products. In this case, launching new mobile phones can provide ASDA Company some
relevant benefits. However, there are many telecommunication companies resent in UK
market who are leading in their business such as Samsung, Vodafone, Motorola, and
many others. On the other hand, new mobile brands from any retail supermarket can
attract customers to any retail shop as other retail companies do not sell mobiles to their
customers. This can be stated as innovation in the products of ASDA Company for their
development as well.
Furthermore, Business Company needs to established business case, in which they can
apply different new technologies to their new products. As stated by Bertoni and
Tykvová (2015), development of the new products can be done by skilled workers.
Moreover, ASDA Company recruits new IT skilled people who help them to develop
their products. After that, testing and validation can be done by testing process. In this
process, ASDA can provide some of their mobile phones to specific people for getting
their feedback. In order to launch this new product, ASDA Company needs to follow all
these steps.
P4: Development phases of frugal innovation and how can it be used in company
context
Frugal innovation is another process by which business companies can reduce the
products' complexities. In relation to this, this helps business companies to reduce their
production cost and goods' cost as well. As opined by Andersson et al. (2016),
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CollectingideasIdeadevelopment

removing the features which are non-essential for any products such as mobiles can
several people toward new products. In this case, ASDA Company is planning to launch
their new mobile handset. In order to avail this, they can reduce the number of features
which are not used by their customers in regular manner. Provide new essential
technologies in their handset can make their products unique than other similar
products. As opined by Davoudi et al. (2018), frugal innovation can be stated as binary
process with non frugal and frugal matters. This helps to minimize the resource uses in
the developmental process. Moreover, this limits the delivery and production of the
companies as well.
Companies can use these innovative ideas for launching lower cost products and
different services in their market. Products with low prices increase the competition
between business companies and this attracts more customers and increases the
customers’ base. Moreover, application of frugal innovation process is related to
decrease the cost process and this can be available for the large scale of market.
Moreover, this has stated that ASDA business is planning to provide option to their
customers for choosing the mobile features. In this context, this can help them in the
frugal innovation process in which their pricing cost can get lower than the original.
[Refer to Appendix 2]
M3: Role played by frugal innovation in company
ASDA Company can apply the frugal innovation process in their innovative process to
their mobile phones. This helps their company to lower their production cost. This has
seen that frugal innovation process can be applied by ASDA Company to decrease the
cost of the mobile phones. Their company sells mobiles phones of other companies
from their stores and they provide network connection to their customers as well.
However, in relation to this process, ASDA can apply their network to their own handset
at lower price which can attract many customers towards their new products. As
suggested by Davoudi et al. (2018), business organizations can focus on the interest of
their customers for any kind of products before launch. Reducing the unimportant
applications can make it more durable and their company can only apply the
technologies which people required in their handsets. ASDA Company can provide
opportunity to their customers by which their customers can select the features for their
handset as per their requirements. This can be stated as another innovative approach
by their company as well.
D1: Critical analysis of development of innovation in company
ASDA Company is doing their business as retail supermarket in the market of UK.
Moreover, there are many other supermarkets present in UK market which is increasing
the competition. In this context, ASDA Company required to launch new innovative
products to their market by which they can set a high competitive level from their
business as well. In the context of innovation, their company can be focused on the
products innovation process in which they can launch mobile phones of their brand. In
accordance to Woo et al. (2015), both frugal innovation and funnel innovation process
can be applied in any business company In the context of ASDA company frugal
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innovation process enhance their costing process by which they can omit the
unimportant features from their new products.
On the other hand, conceptualization and launching products can be revealed with the
innovation funnel model as well. There are many leading telecommunication companies
present in market of UK. These companies can create competition for ASDA Company.
Otherwise, application of frugal innovation concept to mobile phones can attract
customers in relevant manner.
LO3: Process of commercializing innovation
P5: Importance and application of commercial funnel in respect to new product
innovation
Commercial funnel is related to three segments such as marketing funnel, sales funnel
and customers funnel. As suggested by Ngo et al. (2017), marketing funnel refers to the
activities which help business companies to enter into the sales funnel. Moreover, sales
funnel is related to the customers of business companies and customer funnel is
referring to the loyalty of customers for their organizations. In the context of new
products development process, all these three funnels are required. Moreover, business
companies need to focus towards their marketing process, sales process and
customers for getting success. On the other hand, as opined by Osoro et al. (2017),
commercialization of the innovation with new products can be derived by the companies
to their customers with the application of commercial funnel. Business companies can
face several challenges from other companies in relation to launch new innovative
products. In this case, research for market and sales factor is needed which help them
to increase their competition also. [Refer to Appendix 3]
Figure 3: Commercial funnel
(Source: Created by author)
Marketing funnel can help ASDA to maintain their products quality and price of their
products. On the other hand, sales funnel is related to four factors such as awareness,
interest, desire, and action. Furthermore, there are some other phases such as the
awareness phase, evaluation phase, interest phase, decision phase, purchase phase
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and repurchase phase which help companies to commercialize their innovating product
in proper manner. [Refer to Appendix 4]
P6: Building an innovation business case for an organization
ASDA Company provides different groceries, clothing and mobile phones of other
companies to their customers (Asda.com, 2019). Moreover, their company sells their
products in both offline and online procedure to increase their sells (Asda.com, 2019). In
the context of innovation, their company can produce mobile handset with their brand
name. Additionally, their company can use the frugal innovation process to lower their
cost of production. Furthermore, they can provide chances to their customers to choose
the features of their mobile phones as per their requirements. ASDA Company can sell
their new products by their physical stores and online procedure. Moreover, they can
promote these products in their store and with the help of digital techniques. Akgun et
al. (2017) suggested that promotion of new products is needed to do by appropriate
process by which new products can identify the customers in easy way.
In this context, printed advertisement can use by ASDA company in their physical stores
and they can provide offers to their customers for using their sample phones as well. In
relation to launch new innovative products, their company needs to estimate their
expenses. This has seen that they can apply frugal innovation strategy which helps
them to maintain low cost.
Types Cost
1. Production expense $5000
2. Expanse for resources $10000
3. Expense for employees $12000
4. Expenses for management $9000
5. Expenses for risk management $5000
Total expense $41000
Table 1: Expenses for new product
(Source: Created by author)
Estimated sale and revenue of products are as follows:
Name of products Product price Number of
products
Total revenue
1. ASDA A9 $101 100 $10100
2. ASDA A9 Pro $115 125 $14375
3. ASDA M2 $120 175 $21000
4. ASDA P6 $130 110 $14300
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Total revenue $59775
Table 2: Revenue from the new product
(Source: Created by author)
Thus the profit of ASDA company will be $59775- $41000= $18775
In this context, this can be stated that ASDA Business Company can get relevant profit
from their new products as per the estimated rate.
M4: Building a detailed innovation business case including techniques to
measure and improve
This has seen that ASDA Business Company can plan for their new mobile handset of
their brand and by this; their company can get relevant profit. However, the
measurement of effectiveness can be done through different process. As opined by
Woo et al. (2015), Business Company can take feedback from their customers about
their products and services. This process can enhance the measurement of the
effectiveness of Business Company regarding their new product. On the other hand,
ASDA can improve their products as per the comments and opinion of the customers.
On the contrary, their company provides opportunity to their customers for choosing
their mobile features. This can be stated as new factor which business company is
going to apply in their production process as well. Moreover, this changes the pricing of
products as well.
There are many features present in mobile phones which are not used by customers. In
accordance to Laužikas et al. (2016), innovation and uniqueness in product process can
also attract customers towards business organizations. This is a unique approach of
their company and this can increase the interest of consumers in relevant ways.
However, this has seen that the estimated revenue is higher than the estimated
expenses. This helps ASDA Company to develop their revenue rate in positive manner.
LO4: Evaluating range of methods to protect new ideas
P7: Different tools used to develop retain and protect intellectual property and
knowledge
Intellectual property can broadly be classified into two categories - physical (machinery,
equipment, and buildings) and intangible assets consisting of brand, designs, human
capital. As opined by Woo et al. (2015), in terms of business assets knowledge refers to
the information skills and ideas related to the business. Both the knowledge and
intellectual property helps to make a company unique therefore it is necessary for the
company to use tools to protect it. Tools like:
● Non-Disclosure Agreements: A non-disclosure agreement is a type of
confidential contract that is maintained between two business partners. As for
ASDA Company, it can use this agreement when it enters into a partnership
business with other leading mobile companies in UK.
● Patent application: A patent is a protection grant that is often taken up by an
organization to protect its invention. As for the ASDA Company, it can use this
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