Innovation, Commercialization, and Frugal Innovation at ASOS Plc

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UNIT 8: INNOVATION AND
COMMERCIALISATION
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INTRODUCTION
This assignment shows the importance of innovation as to how innovation helps
business to achieve business goals and gain competitive advantages (Lin et al., 2014).
As the world changing at rapid pace businesses needs to polish their thoughts and
modify and innovate their business ideas to remain in the competitive market as
competition is increasing day by day. Innovation refers to as getting a new idea, creative
thoughts, and new imaginations in products or services with respect to the modern
world.
For better understand the assignment topic ASOS Plc business organization is chosen
as the nature of the business is fashion and cosmetic retailer they also design and
manufactures fashion in their own name which makes them perfect industry with
respect to the assignment topic (Loya and Rawani, 2016). Asos Plc is a British online
fashion trend business industry which sells its products and services through an online
channel which is an also innovative method for business activity.
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LO1
P1 EXPLAIN INNOVATION AND DETERMINE ITS IMPORTANCE TO
ORGANIZATIONS IN COMPARISON WITH INVENTION.
Innovation
The thought process or creation which leads to modify the service and products into
something good which increases the value for which customer willing to pay is
innovation. The innovation is the activity in which product is new and unique or product
is modified in a way which increases its value more but affordable as well as satisfies
customer need (Mertens, 2014). In a business organization, innovation often refers to
the new ideas for products and services which satisfy and fulfill the needs of the
customers.
Difference between Innovation and Invention
In the simple language invention is the activity and process of creating a product or
introduction of a process for the very first time (Neumann et al., 2017). For example
Mobile phones. On the other hand, innovation refers to the modification or makes a
product more significant by making few changes or introducing new technology onto
them. For example smartphones.
Basis Invention Innovation
Meaning The invention refers to the
creation of the product or
introducing any service for
the very first time (Norman
and Verganti, 2014).
Innovation is the process in
which existing product and
services are modified or
making few changes into
them to make them more
superior.
What is it? Creation or introducing new
product or services which
never seen the world
Innovation adds value to
the existing product and
services (Norman and
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before. Verganti, 2014).
Concept The idea is original as well
as it’s operational in theory.
Practically applying a new
idea totally thought
process.
Skills required Technical or scientific skills
required.
Strategic skill, market
knowledge as well as
marketing skills.
Occurs when Striking a new idea to a
scientist.
A need for the product or
service or need for
improvement in existing
product felt by the innovator
(Radjou and Prabhu, 2015).
Concerned with Individual product or a
single process.
Combination of different
services and products.
Activities The invention is limited to
the R & D department.
Innovation spreads across
the business industry.
Importance of Innovation
Innovation is a very important business activity for the business organization. For all the
business organization whether it’s already established or new startup innovation is
important for both because if a company failed to innovate their all employees, business
all suffer very much (Shirotsuki et al., 2017). Today with respect to changing world
managers are hired with their innovative and creative skills. Following are the points
which prove innovation is very necessary for business organizations:
Creative Development
Innovation makes business and its products creative as well as it helps business to
grow further. The potential market requires a high demand for creativity in which
innovation provides all the needs which the market requires in terms of change (Sweet
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and Maggio, 2015). Asos Plc drawn towards creativity for its business and achieve
success as Asos is the leading online fashion brand in the UK.
Continuous Improvement
Through innovation asos, it keeps improving as they going with the pace of the market
and improves with it as well. Innovation brings continuity of change as whenever the
business trend of market changes business products and services ultimately changes
and meet with the market need (Swann, 2014).
Reinforce your Brand
By keep innovating business products and services according to market needs and
satisfy the customers as well, asos reinforce its brand and for that innovation
significantly helps business. Innovation makes business capable to meet the
expectations of the market as well as of customers which ultimately make the business
brand popular amongst the customers (Branstetter, 2017).
Competition
One of the most important roles of the innovation played within the business industry is
it significantly helps business organization to gain a competitive advantage over their
competitive rival business industries as innovation helps business to think more than
their capabilities and provide opportunities to understand customer needs which
ultimately helps to gain competitive advantage (Bryman and Bell, 2015).
USP
Through innovation, a business can have their Unique Selling Proposition as innovation
helps business to modifies their products unique and attract a customer through it as it
is rare in the market (Chesbrough et al., 2014). For example, the products of asos are of
the latest trend as well some of them are rare which can be available at an affordable
price which is the USP of asos in which innovation significantly helps.
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As the above points shows the significance of innovation is can’t be ignored or avoided.
The continuous process of innovation within the business organization helps business
activities to keep growing towards success. Innovation not just helps business to gain
competitive gain over business rivals but also helps business to generate more profit as
innovation is the best way to attract more and more customers and satisfy their needs.
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P2 EXPLAIN HOW ORGANIZATIONAL VISION, LEADERSHIP, CULTURE, AND
TEAMWORK CAN SHAPE INNOVATION AND COMMERCIALISATION.
The innovation and commercialization within the Asos Plc are highly affected by vision
and teamwork, culture and leadership. The vision of the organization benefits the
business through futuristic as well as realistic measurements. It is totally based on the
effective long-term decisions of the business organization (Davidson, 2014). It benefits
the business if the fluctuation in the situation, change in market trend is not effectively
assessed.
The workplace of business is very critical in the process of innovation. Workplace
makes a direct impact on the process such as enough opportunity provided to the
employees. A healthy environment of the workplace increases the efficiency which
ultimately surpasses the limits of innovation activities within the organization (Abdul
Razak et al., 2014).
Leadership is an important aspect for all the business activities not for just innovation.
Effective leadership shapes innovation process as leaders motivate employees for
better work. In ASOS supportive leadership style is adopted by the managers which
create a healthy environment within the organization and ultimately boost the efficiency
of employees (Autio et al., 2014). An effective leader understands the need of their
customers and quickly asses the change required in the market for which additional
value added to products and ultimately give birth to innovation.
The cross usefulness such as vision, leadership, teamwork, and culture in one process
effectively shapes the innovation within the business. These activities help business to
meet the change which is required for a business with respect to market trend through
innovation. Good leadership, vision, teamwork, and culture of the business organization
bring effectiveness within the business as well as leads to various innovative ideas
whereas ineffectiveness of these can demoralize employee, results in various
disadvantages for business industry (Bhat, 2017).
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LO2
P3 EXPLAIN THE 4Ps OF INNOVATION AND EXPLAIN THE USE OF THE
INNOVATION FUNNEL TO EXAMINE AND SHAPE INNOVATIVE IDEAS.
The 4Ps of innovation can be explained as:
Product Innovation: It is defined as the collection of the new set of products and
services which are offered by the organization with the aim to provide the better set of
products with respect to the fulfillment of demands, where Asos defined the collection of
80,000 brands along with the own-branded products, in the year 2017, €1.9 billion
revenue was generated with an increase of 145% in pre-tax profits (Triguero et al.,
2013).
The innovations in the sectors of product manufacturing are done in such a way that no
product of Asos is sold more than 3months, and the set of new products ranging from
2500-7000 are introduced per week.
Process Innovation: The innovation done in terms of the process includes the ways in
which the changes over the existing procedure followed within an organization is being
made, which has been achieved in Asos by offering the long warranty period of the
particular product, by offering the service availability in 24*7 hours format (van Hemert
et al., 2013). The secret behind the success of the company is the implementation of
the set of processes derived in the combined form of technology, content and cutting-
edge design. The company offers the facility of opting for the best suitable dress
according to the size and shape defined by the customer over the application, which
attracts a huge number of customers.
Position Innovation: It defines the use and the popularity of the products within the
public demand, which defines the set of innovative techniques performed with the aim to
achieve the fame about the products and services offered by the organization (West
and Bogers, 2014). In Asos, many opportunities are available for the employees to
enhance their position, to achieve this the company provides the two-month internship
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program relating with the digital analytics, performance marketing, content, and
engagement, etc., which help the company to compete with the upcoming changes in
an effective way.
Paradigm Innovation: It is the last paradigm defined in the field of innovation, where
the paradigm mainly focuses on answering the set of the three main questions such as
What type of pattern is demanded by the customers, how the development of products
and services be made according to the upcoming demand, why the change and
innovation is to be necessarily determined within the company (Wonglimpiyarat and
Chandrachai, 2016). In ASOS, the new brand has been launched named as Z, which
deals with the styles and fashions in relation to the people who have turned to be 18.
In ASOS, the innovation funnel is used to generate the maximum number of ideas
defined within the field of innovation in huge amount, where the set of the ideas are
further filtered according to the accurate set of requirements and the demands of the
customers, with the aim to generate the maximum profit within the company by
implementing less number of resources, to achieve this the innovation funnel tool has
been defined in order to generate the priorities among the various set of ideas
according to the most demanding set of procedures required within an organization
(Autio et al., 2014). The ASOS has achieved success in the variety of products by using
the innovative funnel tool over the business environment, which serves to be helpful in
taking the company at a higher level of growth and development.
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P4 EXPLAIN DEVELOPMENTS IN FRUGAL INNOVATION AND PROVIDE
EXAMPLES OF HOW IT IS USED IN AN ORGANIZATIONAL CONTEXT.
The frugal innovation in terms of development is also known as reverse, constraint-
based or inclusive innovation, which defines the set of the technological products which
are defined at low prices and in high volume, with the aim to complete the demands of
the people or it can be also defined as the type of innovation done with respect to the
financial, institutional and material terms provided to generate the innovative and
sustainable set of ideas with respect to the business development (Abdul Razak et al.,
2014).
To achieve the benefit of implementing the frugal innovation within the marketing
environment good quality of solutions must be provided in relation with thinking od=f
design at the service level, new ways of introducing the new set of development and
designs, implementation of the effective business model which contributes towards the
achievement of most appropriate set of solutions towards the business plan (Radjou
and Prabhu, 2015).
The creation of frugal innovation can be defined by including the set of processes like
open innovation, maker movement, and inclusive business and sharing and circular
economies.
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Figure: Stats chart of countries
Source: Bryman and Bell, 2015
The use of frugal innovation in ASOS can be defined as:
Innovations made in the technological form: The frugal innovation in ASOS helps in
determining the set of new innovations and the creativity defined in terms of creating the
huge number of opportunities for the fugal innovators present within the organization
(Abdul Razak et al., 2014).
Environmental Constraints: It helps in defining the modes of innovations in the
company by considering the environmental factors such as water, climate, energy, and
other resources, increasing the demand for introducing a frugal model of consumption
and production within an organization (West and Bogers, 2014).
Upcoming trends: The Company ASOS aims to develop the set of products and
services which met the demands of the people, by including the reduced cost estimation
over the financial structure of the company (Wonglimpiyarat and Chandrachai, 2016).
Capital Efficiency: During the initial establishment of the company ASOS, the financial
capital of the company was termed as low, where the use of the frugal innovation
served as the boon for determining the effective set of procedures at low rates (Loya
and Rawani, 2016).
Way of development: The frugal innovation implemented within the company, served
as the way of providing the path for the successful development of the company, as the
result of which the company has achieved its fame and popularity in the maximum
number of areas of the world (Norman and Verganti, 2014).
ASOS Plc business organization is chosen as the nature of the business is fashion and
cosmetic retailer they also design and manufactures fashion in their own name which
makes them perfect industry with respect to the assignment topic (Radjou and Prabhu,
2015). Asos Plc is a British online fashion trend business industry which sells its
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