Innovation Management: BrewDog's Historical and Future Development

This report provides a detailed analysis of BrewDog's innovation management, focusing on the application of disruptive innovation and the three horizons theory. The report begins with an introduction to innovation, highlighting its importance in adapting to market dynamics. The main body delves into disruptive innovation and three horizons theories, outlining their principles, processes, merits, and demerits. It then applies these theories to BrewDog's historical development, providing a company overview and background, and analyzing its evolution within the beer industry. The report concludes by recommending future development pathways for BrewDog, based on the insights gained from the theoretical analysis and historical context. The report emphasizes how BrewDog can leverage innovation to expand its market share and adapt to future trends. The report is a comprehensive study of BrewDog's innovation practices and strategic planning.

Managing Innovation

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Innovation theories.................................................................................................................3
Company overview and background......................................................................................7
Historical development...........................................................................................................8
Implement of three horizon theory in context of future development....................................9
Future development................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Innovation refers to the part that is related with something new and to implement changes
in the existing products and services. The main motive of innovation is to turning an idea into the
solution that generates more value from the customer’s perspective. Application of ideas works
as a systematic tool that generates ideas which are novel and useful. Creativity plays an
important role in innovation perspective that is implemented by organisation to meet with
dynamic needs of market and customers. This report is written from perspective of BrewDog that
is one of the largest beer company in Scotland. Moreover, this report highlights on innovation
theories and there implementation in organisation. The first theory relates with creation of new
market and value network (Zeng and et. al., 2017). Second theory is used for determining that
right value is delivered by organisation among their products and services. In the last, the
assignment also focuses on implement of different theories from perspective of future and
historical development.
MAIN BODY
Innovation theories
Disruptive Innovation
The disruptive innovation theory relates with formulation of fresh and new business ideas
that helps to target new market in order to increase the number of customers. This is also
considered as a less expensive option for the organisation that are planning for launching a new
innovative product in market for increasing their market area. Along with this the level of
accessibility to make products is very high that leads enterprise for attaining competitive
advantage in market. In the context of Brewdog management implement disruptive innovation
theory to enhance their market area by presenting new beverage section in market and at new
location. With the implement of this identity it is easy for organisation to introduce better results
that is leading company to generate better results such as to target more number of clients for
expansion of business successfully (Winch, 2019).
Principle of Disruptive innovation theory- Some of the key principles that focuses on
all types of organisation to implement right strategy for increasing business growth are mention
as follow:

 Letting go the past- According to this principle each organisation must learn from there
experience by implementing right methods. This is required to focus on the purpose for
attaining right growth in future. To encourage courage- For attaining better growth it is important for all organisation to
bear some risk factors that show courage as this aspects show that slow and steady
progress helps to achieve more number of results (Szutowski and et. al., 2019). To
implement this aspect properly organisation analyse the right ideas for selecting right tool
that attain more growth. Embrace of failure- With the principle of embracing it is analysed all organisation face
challenges and failure so it is mandatory to deal with them properly. All mistake that are
made by organisation must be ignored for achieving long term success. Opposite- According to the principle of opposite it is identified that several activities are
performed by organisation which are contradict with each other. It also depends upon
various expectations and keep going with boundaries to accomplish desired goals. Possibilities- Increase in the market and competition also generates various opportunities
for organisation that leads management to analyse market situation and accomplish all
existing possibilities. Rejecting limits- According to the rejecting principle of innovation it is stated that
planning must introduce new product and service in market. Therefore, this is essential
for organisation to work beyond the limits in order to develop business.

Figure 1Source(https://aethon.com/patience-virtue-disruptive-innovation/)
Process of disruptive innovation theory
In order to implement it within the organisation it is mandatory for management to follow all
steps related with disruptive theory.
Identify of key markets- The first process or stage that is related with disruptive
innovation theory is to identify the key market for make successful launch of new and innovative
products that is leading company to increase their market size. It is also beneficial to identify
opportunities in market ( Smith, 2018).
Selection of market segment- When the specific market for the organisation is introduced
and selected then management for the organisation is required to select right segment. Further,
decisions are based on different terms that are geographic, psycho-graphic, behavioural and
demographic.
Deciding the innovation- After the selection of right market segment the organisation
focus on innovative products and then select them to choose appropriate suggestion which match
with innovation needs and market segment (Prokop and Stejskal, 2017). In simple terms, this
stage is used for evaluation of all idea and selects the right one.

Introduce of new product in market- This is the last stage in which an organisation such
as Brewdog organise meetings to select right decisions for introducing innovative products
Merits and de-merits of disruptive innovation
Merits- With the utilise of disruptive innovation an organisation is able for introducing
innovative products in market. Along with this disruptive innovation also engage large number
of clients by attracting them to invest in organisational products.
De-merits- Disruptive innovation is one of the risky process that is impacting on
operations of organisation as it not ensure that innovation match with the needs of customers in
proper manner. So time to introduced new products is also crucial for company.
Three horizons
This is one of the main theories that relates with innovation and it is used by the business houses
for making sure that all products and services which are offered by business houses must by
provided by organisation to monitor that size of business is increasing or not (Ottosson, 2019).
With help of this it is also used to provide better value among all products. There are some
different horizon that are provided by organisation are mention as follow:
 Horizon first- This states that an organisation must require to implement and exploit
all current offerings with in proper manner. As per this horizon the management of an
organisation pay attention towards incremental innovation for improving the existing
products and its value.
 Horizon second- The second horizon demonstrate that business can be extended by
offering new products that deliver more value to customers. They also offers good
value to the organisation.
 Horizon third- It is the third and last horizon that is focused towards exploration of
better offerings that develop changes in the organisation within future.
From the perspective of Brewdog management implement theory of three horizon with the
purpose for introducing new and innovative product in market. This refers that organisation also
provides its existing offerings with in organised manner. With the help of this it is easy for
management to attain long term growth in the market.
Principle of three horizon theory
 Exploit of existing resources- This principle defines that there are various entities are
planned for apply of all three horizon theory properly. It makes sure that all the resources

which are provided by company must be implements with right approach for increasing
overall productivity of business(O'Gorman, Brophy and Clinton, 2015).
 Generating value- At the time of designing and develop an innovate product it is
mandatory for organisation that sure all items which are designed must be increasing
value that enhance overall performance of organisation.
 To make future assumptions- There are various principle are stated which defines all
business entities that is used for making assumption related with future. This is also used
for determining better and innovative products in order to sustain among competitive
market for longer period.
Procedure related with three horizon theory- Steps that are required for focusing to
implement this theory is as follow:
 To maintain core business- The first stage for the three horizon theory refers that there
are various techniques must be implemented to make sure which is defending and
maintain core business for the growth of business in future.
 Emerging business- Second stage for the organisation entities long term planning for
launch of innovative products. It is also analysed for analysing the business that nurtured
by them. With the help of this management perform their operations is systematic
manner.
 Creating of innovation- This refers to the last stage in which an organisation are
required for formulating better and new ideas. It also relates with implement of better
relations that launch products in market with better innovative ideas (Mac and et. al.,
2019). It results that organisation is able to achieve more success in market.
Merits and De-merit of three horizon theory
 Merit- This is useful as well as beneficial for the organisation that helps for innovating
better and existing offerings through exploit them on systematic basis. Along with this by
utilising it managers are aware about all requirements of future that leads to achieve more
growth.
 Demerit- It is complex for management to implement the three horizon theory because
all situations must be monitored that take place in business surroundings. Therefore, it
not possible to predict all situations at a similar time due to different level of risk and
uncertainty in business (Land, Sutherland and Taylor, 2018).

By monitoring and understanding the above theories it is recognise that Brewdog must adopt
disruptive innovation theory through which business organisation introduce innovative bear
among different locations. Along with this it also helps to increase market share and
expansion of business. The major advantage that is gained by organisation is that
management increases market share which directly increases number of customers.
Implement of three horizon theory of innovation in context of historical development
Company overview and background
The Brewdog is a multinational brewery that also operates pub chain it was established in
the year 2007. James Watt and Martin Dickie are the founders of Brewdog and currently they
hold 46% shares in the market and its headquarter is situated in Scotland, UK and currently
company deals with large variety beers in the market. In the present scenario, organisation is
performing their work in domestic as well as international market. Brewdog starts to operates its
business with brewed beer and then enter in global market to increase the customer base. This
results it is easy for organisation to increase sales by performing business in large market it also
increases profits of company (Kupeshova, Lazanyuk and Kareke, 2019). Thus, after increasing
the profits management of the organisation also start to operates business in production activities.
Along with this to deal with innovation perspective management consider that its operational
activities develops alcoholic and non-alcoholic drinks in the market. They approach more
number of customers through pub and bars, but similarly there is also increase in demand of food
so organisation also introduces fast food in there restaurants. The company was registered as the
UK drink organisation known as Watchdog who makes an align with Brewdog for breaching the
code of practice in relations to generate the label of for one own product. Brewdog denied the
offer and give statement that watchdog was looming the development of small and medium sized
organisation. The founder of the Brewdog who are James Watt and Martin Dickie enter into
television industry in the year 2013 but due to some uncertainties it is stopped after three years.
After this Brewdog decided to enter into television industry and launched Brewdog network that
features original content to viewers.
Historical development
Brewdog is a beer organisation that serve brewed beer to its buyers by managing there
business from pubs and it mainly provides ales. The organisation was established in the year
2007 and its first bar was opened in the year 2009. In the present scenario, management is

operating more than 75 bars among different locations of the world. Moreover, in the year 2015
organisation was awarded for the best organisation in their local region for successfully
operating the business. With the analysis of disruptive innovation it is analysed that there are
various task and operations are managed through simultaneously implement of innovation. The
study of disruptive innovation is imperative and it is used for improving products of Brewdog.
This is also beneficial in improving and managing all work methods as per desired goals and
objectives. Brewdog was launched recently so it is important for management to implement all
those aspects such as disruptive innovation which boost performance of organisation and
implement more value in organisation products to satisfy needs of customers properly. Along
with this in the similar year organisation was implemented further plans for increasing the
number of operations and employee engagement in the organisation (Hector and et. al., 2019).
After some years TSC also invested money in the Brewdog for gaining 22% stakes in the
company. Moreover, management of Brewdog is also implementing disruptive innovation that
leads to complete all work in accurate manner. Moreover, by aspects and application of
innovation and its aspects such as creative aids to complete all work in organised manner by
performing essential task on urgent basis. With increase in profits and productivity organisation
focus to accomplish opportunity of production brewer and establish there factory among
greenfield under a metroplex complex that is situated in Australia. As the organisation increases
there size and enter in multi-national market management start to operate and manage business
among different geographical locations. Within the current year organisation is focused to open
there first bar that is alcohol free within London. Further, there are various health problems are
also increasing at the global level like, most of the society is facing challenges of Covid19 which
generates health issue for all individuals. This results the shortage of hand sanitizer is happening
because there is sudden raise in the demand of them. Therefore, Brewdog make some changes in
there production unit for starting the production of Hand sanitizer to match with demand of
market. Along with this it is also helping organisation to match with economic conditions in
appropriate manner.
The bars which are operated by Brewdog among the UK, they offer food that relates with
either the Burger menu or pizza menu. But the core business of company is to implement product
life cycle engaged with non-alcoholic and alcoholic products. Therefore, organisation is adopting
proactive techniques related with marketing and financial perspective for their business as it

enables organisation to manage the business in the international market (Hakala, Niemi and
Kohtamäki, 2017). The business of the Brewdog is at developing stage so management adopt
open nature that leads them to grow its business size by utilising different model that gives
potential aspects to convert business into opportunities. Along with this Brewdog is continuously
moving towards the innovation for increasing the value of products and services that are offered
by organisation. To implement innovation in all perspective company also implement innovation
in its past operations products. Three horizon model of the innovation is adopted by management
of Brewdog to continuously increasing products range and its variety that is served by them
among there Pubs. According to the present market conditions organisation is managing their
business at world-wide locations. Therefore, Brewdog always move towards innovation
perspective that also raise expansion by keeping the operations update with right information and
innovation (Deola, 2014). The business was started with motive of serving beers but by the
change in times organisation also introduced non-alcoholic drinks to capture more market. It is
also beneficial for company in two ways that demonstrate market size and customer base both
are increased by organisation by offering good variety of products that provides range for
consumers and its segment match as per target market area.
Implement of three horizon theory in context of future development
Future development
Brewdog is one of the persistent organisation that believes to expand its business size with
methods of innovation and expansion. The company always evaluate and analyse the market and
other areas through implementing innovation that further develop growth and success for
organisation. Along with this Brewdog is operating start to manage their business at international
level that offers customers wide range of products it is also used by management for considering
better results within business that is to earn more amount of profits. The organisation was
established in year 2007 and with the pass of time it increase their business among different
regions. Ideas plays an important role that is leading management to complete its work with new
approach. This determines management enhances their work productivity by implement of new
idea that is all individuals consider that its task is used to work with automated machines for
completing work with right manner. Real world utility is another idea which is enhancing
performance of organisation and it also leads to manage their work in right manner through
considering right vision that provides long term objectives for completing all work according to

new innovative method. In the last, another innovative method or idea is to market all innovative
methods that is used for work with innovative ideas to gain effective results. The organisation
intentionally start business for develop of brewed beer and alcoholic drinks but with monitor of
opportunities in non-alcoholic market. There are some other challenges are also faced by
management that are overcome from the three horizon theory of innovation as it is helping
company to manage business in other sectors also. As the world is enduring structure the colossal
issue of heath named as Coronavirus or COVID19. The world and various economies are
enduring structure it and attempting to control its belongings and spread in progressively number
of populace. BrewDog who bargains in alcohol industry and create prepared lagers, presently
with the changing circumstances and taking a gander at the economy acquired advancement its
framework and expanded an item life-cycle. BrewDog made its Aberdeen creation unit of lager
into a creation of a hand sanitizer (Chisholm and et. al., 2014). As COVID19 is an infection
which spreads through close contact and contacting, it is risky and unsafe causing a great many
passings on everyday schedule. The hand sanitizers showcase raised and gone up, as COVID19
is an unexpected episode the interest of sanitizers supported which made an irregularity in
commercial center interest and supply are influenced. The interest is high and supply is right
around zero so the creation has halted and advertises load of sanitizers are finished. BrewDog
enhanced a hand sanitizers by utilizing its blended lager recipe and began the creation of hand
sanitizers. The organization utilized Three Horizon hypothesis of advancement and made its
brew creation unit into a hand sanitizers creation manufacturing plant (Beverland, Nielsen and
Pryce, 2015). It is a part for the CSR activity that provides options to organisation for becoming
more productive units. so it also monitored that innovation make better operational and
functional results by using theories that are productive and effective.
CONCLUSION
From the above report it is summarised that innovation is one of the most important tool
that is used by organisation for enhancing business practices that directly improves capabilities
and ability of business. This report also undertakes aspects that cover knowledge of innovation
which is an effective process for developing new products and services by introducing new
process system. Along with this innovation theories are developed and provided by researchers
and markets that helps organisation to become more productive by evolving better process for
organisation. Disruptive innovation theory and Three horizon theory are covered in this report.

Both of them are effective innovation theories that are utilised by organisation to implement right
business models which also improves operational value among all products. This result it is easy
for organisation to satisfy needs of customers with innovation in proper manner.

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Principles of disruptive innovation. 2020. [Online]. Available through:
<https://www.industryweek.com/innovation/article/21963160/disrupt-or-be-disrupted-
eight-principles-of-disruptive-innovation>