ASDA's New Energy Drink: An Innovation and Commercialisation Report

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Innovation and Commercialisation
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INTRODUCTION......................................................................................................................3
TASK 1......................................................................................................................................4
P1 Explaining innovation and its importance to ASDA comparing to invention..................4
P2, M1 Explaining the ways organisation vision, leadership and culture foster and develop
culture of innovation..............................................................................................................6
D1 critically analysing how innovation is developed and measure in an organisation.........7
TASK 2......................................................................................................................................8
P3, M2 Explaining the 4P’s of innovation and use of innovation funnel in examining
innovative ideas......................................................................................................................8
P4, M3 Explain developments in frugal innovation and its use in organisation with
example................................................................................................................................10
TASK 3....................................................................................................................................11
P5 Explaining the importance of the commercial funnel and new product development
processing for commercialisation........................................................................................11
P6, M4 Build an innovation business case for ASDA and ways to access funds................14
TASK 4....................................................................................................................................16
P7, M5 Evaluating the different tools that ASDA can use to develop, retail and protect
knowledge and intellectual property....................................................................................16
D2 Critically evaluating the nature of innovation and solution to overcome the challenges
to develop successful innovation.........................................................................................17
CONCLUSION........................................................................................................................18
REFERENCES.........................................................................................................................19
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INTRODUCTION
Innovation can be termed as an act or making changes to the existing product or introducing a
new idea and ways to improve it. Commercialisation is the process to present and market the
new product in the market efficiently. In UK, with changing in the need of the customer the
demand for the new product is also increasing. In view to remain competitive and earn
profitability, organisation needs to continuously meet the changing need of customer by
offering them new product through innovation. The present report will discuss the innovation
of new product of ASDA; it is one of UK’s leading supermarkets. ASDA is planning to
introduce new energy drink as their new product after considering the demand of the product
in the market which helps them to increase their sales and profit ratio.
It has headquarter is in West Yorkshire offer different products like Grocery, general
merchandise, financial services etc. The report will highlight the importance of innovation
comparing with invention. Report will identify the ways organisation vision, leadership and
culture foster and develop culture of innovation. Further, the 4P’s of innovation and use of
innovation funnel in examining innovative ideas will discuss. The report will also discuss the
concept of innovation funnel and development of frugal innovation. It will also provide a
deep insight regarding the commercial funnel and process of new product development in
ASDA. Report will also present the innovation business case and methods of intellectual
property.
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TASK 1
P1 Explaining innovation and its importance to ASDA comparing to invention
In the rapidly changing business world, each and every organisation are engaging in
introducing new product as the demand for these products are increasing in market. It can be
said that developing and introducing new product in market will assist the organisation to
gain the sustainable growth and development in market. Most of the organisation is taking
innovation method to grasp the market opportunity and exploit them effectively. Innovation
can be termed as an act or making changes to the existing product or introducing a new idea
and ways to improve it.
Innovation is significance for ASDA for the development of new product, its importance
are presented as follows:
Identify market opportunities: Innovation assist the ASDA in identifying the better market
opportunity to grasp in order to achieve competitive advantage. R&D department seeks to
combine the market trend pattern with the changing social condition and provides innovative
ideas. It is useful for the organisation to hit the big and new ideas in market before the
competitors.
Important for growth: Innovation is essential for the growth of any business. It can be said
that business with innovation culture assist in adds up scale and employees which leads to
increase in productivity and more customer satisfaction. Managing innovation in the
organisation makes it easier to grow at global level regardless of the size.
Stand out from competitors: There are lot of products which are some of other way are
similar to each other. However, right innovations will assist ASDA to make its new product
to stand out from other competitors. Innovation assist in either creating a new product or add
innovative feature in it which assist the brand to be differentiated from other competitors in
market.
Meeting customers need: Customers need regarding the products are changing rapidly, it is
important to meet their needs to gain the competitive advantage in market. Innovation
managers predict the change in market and need of the customer regarding the product. The
business needs to come up with innovative idea in order to satisfying the need of the
customer efficiently.
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Difference between innovation and invention
However, innovation and invention are always considered as same, but there is a fine line
between both. Invention can be defined as the act of creating, designing or discovering a
product, method, process that do not exist. Invention is sometimes comes from the process of
innovation, but is it is not always required in organisation. Comparison of invention and
innovation are presented below:
Table 1: Difference between innovation and invention
Basis of Difference Innovation Invention
Overview It refers to adding up the value in the
product, process that already exists.
Innovation is the process through which
ASDA can improvise their existing
product by adding some of the elements
in that product.
It is completely creating and
discovering new product. On
the other side, invention is the
patent attached with the person
who introduced that product for
the first time in the world.
Invented product did not match
with any of the existing product.
Skill requires It requires set of marketing, technical and
strategic skills. Innovation of the product
is done by the organisation then they need
to consider the marketing, planning and
technical skill so that product must be
innovated as per the requirement of
ASDA and its targeted customers.
It requires unique scientific
skills. While product invention
the only skill is required is of
inventor or scientific who have
knowledge of new product
development.
Concept It is the practical implementation of new
idea. The major concept behind the
innovation of the product is to improve
the quality of the existing product with
the help of the new idea.
It is an original idea with
working in different theories.
On the other side, the concept
behind the invention of the
product is to analyse the brand
new idea through which totally
new product can be developed.
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P2, M1 Explaining the ways organisation vision, leadership and culture foster and develop
culture of innovation
As the UK market is becoming more competitive, it is essential for ASDA to introduce new
product in the market to maintain its customer base and growth. In order to meet the
increasing demand of new product in market and developing new product, ASDA needs to
implement the innovation culture in organisation. It can be said that the vision, leadership,
organisational culture and teamwork will assist the management of ASDA to foster the
workplace environment and culture of innovation. It can be described as:
Organisation vision: The vision statement of an organisation serves as a tool in order to
increase the efficiency and productivity to accomplished goals in future. The vision of ASDA
will ensure that the management are working in a direction as per the vision. It will help in
enhancing the innovation in operational method as well as in creating new product and
commercialisation.
Leadership: A leader or managers need to influence the employees to suggest innovative
ideas. The leaders can make strategies to recruit, develop and acknowledge the employees
that have innovation thinking. Leaders should communicate to the employees regarding their
view and ideas. Leaders can also provide different task in order to explore the employee’s
innovative thinking.
Organisational culture: The most important way to foster the innovation environment and
culture in workplace is to create a positive culture. It is the norms, beliefs of the organisation
and employees. The ASDA culture to increase the productivity in order to achieve the
business goals and objectives will assist the management in increasing the need for
innovative culture to meet the changing needs of the customers. ASDA needs to create a
culture where employee feels free to share their ideas with seniors. The culture should
support the innovation and commercialisation.
Teamwork: Working as a team act as a dynamic concept which assists in solving the
problem and complete a task in an innovative manner. ASDA can create the team which will
perform each task to accomplished the team gaols for innovate a new product. Team work is
efficient in enhancing the culture and helps in formulating the process of organisational
innovation and culture
Different sources of innovation:
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Unexpected: Sometimes, innovation happens unexpectedly, it can be comes up even by
stumble the new product or idea.
Necessity: it is one of the most important sources for innovation. Need for something leads to
thinking and results in some innovative product or idea (The 7 Sources Of Innovative
Opportunity , 2019).
Demographic: The culture and lifestyle of society also gives rise to innovation. For fulfilling
the need of lifestyle, an innovative idea or product can develop.
New knowledge: It is also a main source of innovation. With the new technology,
biotechnology these technology is the source that gives rise to new innovation.
D1 critically analysing how innovation is developed and measure in an organisation
ASDA organisation can use various types of ways for measuring the innovation of the
product so that they can analyse the progress and effectiveness of the product in the market.
For measuring the effectiveness of the innovation of new energy drink product in the market
the team of ASDA can compare the response of their current and past product in the market.
They can also calculate the sustainable profitable value in respect of the new product
innovation. With the help of the comparing or monitoring the progress of the product in the
market will help them to analyse the response of customers towards the new energy drink in
the market. It can be argued that the balanced group of matrices such as benchmarks,
balances scorecard and leys performance indicator can be serves as a measure to evaluate the
development of innovation as per the goal of ASDA.
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TASK 2
P3, M2 Explaining the 4P’s of innovation and use of innovation funnel in examining
innovative ideas
The innovation mix is an important tool which will assist in identifying the innovation
process in order to bring the improvement in the organisation’s new product. ASDA is
introducing the new product, energy drink with full of nutrition that can satisfy the high
demand of such product in UK market. This tool will assist in determining the area of
business that needs to be improved for the innovation process. The 4p’s of innovation can be
used in ASDA in following way:
Product innovation: This includes providing or offering new product. ASDA has
introducing a new energy drink that are health with full nutrition and vitamins, considering
the different in taste the company will launch the drink in different flavours so that all the
customers will prefer to but it. However, competitions are also introducing the similar
products. But the organisation can add the ingredients and different taste which can
differentiate the new products from others (Goffin and Mitchell, 2016). The management
should also focus and improve the packaging of the product and the way it will be appeal to
the customers. These will assist the organisation to create significant value for the customers
and maximise profit for company.
Process innovation: These will assists in improving the method of creating and
manufacturing the new product that could help in reducing the cost of supply also. The
process innovation also related to improve commercialisation and the way organisation will
deliver and offer product to the customer and market. Process innovation assists the
organisation to improve the process and delivery in cost effective manner to increase the
revenue. It will assist in indentifying the defects ion each steps if the process from idea
generation to delivery.
Position innovation: It is also very important for ASDA to effectively launch the new
product in market. Process innovation will help in identifying the target market, the method
of promotion and the way new product will communicate to the customers in market.
Position innovation also assists in achieving the goals of the organisation related to the
product.
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Paradigm Innovation: It involves the activities through which organisation will enter and
expands in the market with the new product with innovation. It is a planned process which
ASDA faces the change in the process of innovation.
Innovations funnel for ASDA’s new product:
Innovation funnel can be described as the steps that take place in order to develop a new
product. The innovation funnels will assist the ASDA to successfully create the new product
that can satisfy the market needs. As per the innovation funnel, there are different steps
involves which assist in successfully examining and shaping the innovative idea for energy
drink (Rothaermel, 2015). The first step will explore various ideas regarding the new
production the information base.
This stage will aim to collect as much idea as possible. In second stage the innovation
manager will refine the idea with the goals of the ASDA regarding new product. The
manager will evaluate the possible challenge and available resource. In next stage, the top
management ensures that the idea has potential to deliver the customers need and will help in
achieving the organisations objectives. This step will lead to put the idea into action of new
product.
Figure 1 Innovation Funnel
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P4, M3 Explain developments in frugal innovation and its use in organisation with example
Frugal innovation can be termed as the concepts which assist in responding to the limitation
in resources, whether, financial, technical, material. It involves turning these constraints in
innovative ideas and practical solution. Frugal innovation principles are low cost based than
that of standard or tradition innovation without comprising to the quality of the product.
Frugal innovation is the process of producing the product at considerably low cost level. Such
innovation process is importance in developing countries which will assist in reducing the
poverty from the society and from the organisation itself. The frugal innovation is beneficial
that requires focusing on the quality based solution which is accessible and affordable.
Frugal innovation process is essential cutting down the funds to reduce the funds in
developed economy which leads to increase the deemed for frugal product and processes. It
will also beneficial as this process requires less environmental constraints like energy, water
and other resources (Etzkowitz and Zhou, 2017). Frugal innovation process is drastically
reducing the cost of the manufacturing which leads to provide low cost products to
customers. It assists in developing the standard of living of people and society.
Use of frugal innovation in ASDA:
Frugal innovation is a process that aims to use less resource and process cost which leads to
reduce the cost of the product. This process leads to remove the complexity of production and
the process which assist the product to the customer. In ASDA, frugal innovation process will
help to develop the low cost product at low manufacturing cost. It will assist in attracting the
customers as this process does not lead to compromise with the quality of product. However,
this process is beneficial for the developing country which does not have enough resources.
ASDA can use frugal innovation process for developing new products.
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TASK 3
P5 Explaining the importance of the commercial funnel and new product development
processing for commercialisation
Commercial funnel or sales funnel can be termed as graphic representation of the sales stages
through which customer goes through buying. There are various stages included in the sales
funnel which predicts the customer’s perception regarding the purchase of product in market.
Sales funnel in very essential for an organisation to ascertain their strategies which are
turning customers in buyers. The four stages of Commercial funnel are presented as follows:
Awareness: At this stage, there are largest numbers of prospects customers which will get
attracted towards the product through different marketing and promotional techniques (Berry
and Berry, 2018). Here, the marketing techniques need to be effective which can attract more
customers.
Interest: At this stage, the number of customers being stated decreased but the possibility of
sales conversion will increase (sales funnel , 2019). The customer will take information
regarding the product. Proper communication with the customers is very effective to change
their perspective to get interest in product.
Decisions: When the customer is being aware about the product and organisation, it will help
them in making their decisions whether to purchase the product or not. This is the stage
where customers will ask for more information related to the product.
Action: This is the final phase, where the customers will make the decision of buying the
product.
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Figure 2 Commercial Funnel
New product development processing is the process that assists in bringing the new product
in market. It includes the product-design along with different consideration. New product
development can be termed as transferring the market opportunity of new product into
making product available for sale. New product development requires a deep understanding
of the customer need and wants the competitive environment and the nature of market. There
are various consideration that are taken in order to start the process of new product
development, these includes cost, time and quality of the product (Biemans, 2018). ASDA
can adopt the new product development process for innovation and commercialisation of
their new product idea of energy drink. The new product development processes of ASDA
are presented below:
New product strategy: In this stage, the innovation manager after identifying the need for
such product ion the market will defines the goals and objective for their new product. The
new product should meet the customer demand in the market with achieving competitive
advantage also.
Idea generation: It is an important step where, the manger will get all the information related
to the market trend and need of customers. Manager can also explore ideas from within the
organisation from employees.
Screening: From the various ideas that are collected, the manager will evaluate each idea on
the basis of the goals of the organisation to meet and satisfying the customer requirement. In
this stage an idea for the new product will be selected.
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