Analysis of Innovation and Commercialisation: Unit 8 Report

This report provides a comprehensive analysis of innovation and commercialisation in a business context. It begins by defining innovation and its significance, contrasting it with invention, and emphasizing its role in enhancing productivity and competitiveness, using Sainsbury's as a case study for developing organic food and healthy drinks. The report then explores how vision, teamwork, and organizational culture shape innovation, highlighting the impact of leadership styles. It delves into different sources of innovation, including unexpected events, process needs, market changes, and new knowledge. The core of the report examines the 4Ps of innovation (Process, Product, Position, Paradigm) and the innovation funnel, detailing each stage from idea generation to product launch. Furthermore, the report evaluates the role of frugal innovation, its benefits, and provides examples of its implementation. The report also discusses the commercial funnel and NPD (New Product Development) of innovation and explores how intellectual property can be protected. This report provides a well-rounded understanding of the innovation process.

Unit 8 - Innovation and
Commercialisation
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INTRODUCTION
Innovation is required in every business to modify process and method and produce new
products and services. With innovation it becomes easy for them to compete in industry and
sustain for long term (Capponi and et.al., 2019). However, it provides a direction in which
organisation has to proceed. Moreover, in such a competitive business world it is necessary for
companies to gain competitive advantage. Along with it, quality of services and products is
enhanced and costs is reduced as well. Companies need to implement innovation in an effective
way.
The assignment will reflect on importance of innovation and how it shapes culture,
leadership, team work, etc. also, it will describe about 4P’s of innovation and funnel. Moreover,
development in frugal innovation will be explained. In addition to it, commercial funnel and
NPD of innovation is determined. At last innovation case is described along with tools through
which intellectual property can be retained and protected.
P1 Innovation and its importance with the differences with invention
Innovation can be defined as a process of improving effectiveness of a product by
creating and improving them and adding some innovating features. In other words, it can also be
said that it is a successful exploitation of new ideas for attracting customers and increasing sales
by satisfying their needs and demands. There is some importance of innovation in the context of
business and developing a new product as Sainsbury's want to develop organic food products and
healthy drink. It thought about this idea because people of UK are becoming more health
conscious and there is a high intensity of competition in this food and beverage industry. Some
advantages which it can get by innovating its products and developing new product in existing
market such as:
Increase productivity: The main benefit of innovation and developing a new product or
organic food is, company can increase its productivity. People want to try something new, and
they change their needs continuous manner so, by providing them new product or innovative
product, an organization can attract wider range of customers (Yu, 2018). It will lead in
increasing overall productivity and sales of the company.
Beat competition: Food and beverages industry of the UK is increasing and developing
in a rapid manner and due to this development, it is increasing competition among players.
Sainsbury's have several rivals or competitors such as Tesco, ASDA etc. For being in the
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competition it is important to provide attractive and innovative food products So, by providing
organic food products and innovative product, Sainsbury's can beat the competition and become
the market leader.
There is a difference between innovation and inventions. The definition of invention is
the process of creation of a product and introducing it and it processes in the market for the first
time (Giuliani, Martinelli and Rabellotti, 2016). On the other hand, innovation means to make
existing products attractive as well as developing new product by adding some innovative
features in them or make some significant contribution to an existing product, processes and
services. In this context, it can be said that Sainsbury's introducing a new product in its existing
market and to its existing potential customers. So, it shows that it is innovation and for that it will
require to use some innovative strategies. So, it can be said that invention create something new
and innovation creates something that sells.
P2 How vision, team work and culture shape innovation
In a business, innovation is shaped and implemented through its vision. This is because the
company vision reflects its core values, ethics, etc. that makes things easy to get it done in proper
way. However, vision statement of firm enables employees, managers, etc. to take effective
decision and develop strategies that where innovation can be done and how it is implemented.
It is evaluated that another major factor is organisational culture. it is because culture depends on
vision. Also, maintaining and having a positive culture creates a passion of doing something
new. It boosts employee confidence and allow them to contribute in developing new product or
innovation (Chen and Vanhaverbeke, 2019). Moreover, if culture is positive it automatically
helps in shaping innovation. The roles and responsibilities are assigned to staff and along with it
new goals and objectives are set. It highly impact on their behaviour in positive way. they are
able to contribute in attaining goals. Besides that, managers also support in developing plans and
implementing it.
Likewise, team work also play crucial role in shaping innovation. It allows staff to work in
team and contribute in attaining goals. So, when innovation is implemented, various teams are
formed and assigned roles and responsibilities. Thus, each employee works in team and they all
share ideas and views with each other. the higher team work leads to increase in efficiency.
Alongside, with proper communication activities are performed in effective way.
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Type of leadership style which is adopted by the company plays an important role is shaping of
innovation in the company. Innovation may result in change in the organization with in
processes, methods, procedures, duties and responsibilities of employees, etc. which may lay a
huge impact on the employees and the business operations. So, it is leaders of the organization
which can help the company in bringing and establishing this change in a workplace that can
help in shaping the innovation of the company (Giones and Brem, 2019).
In this way, culture, vision, teamwork, etc. shape innovation. It provides a positive work
place and direction in which innovation is implemented. Managers also support by developing
strategies and contributing in goals and objectives.
M1 Different sources of innovation
It is analysed that there are different sources of innovation in business. So, through this
they are able to identify need and do innovation (Sources of innovation, 2018). The sources
defined are :-
Unexpected- it is a source where innovation occur is unexpected. this means that instantly
market may provide vat opportunities for business to innovate product. Either there might be a
rise in product or service demand.
Process needs- In this innovation is required to improve weak areas in operation. It may involve
redesigning of new process or method. Here, innovation comes from within internal capabilities
of business.
Industry and market change- As name depicts here innovation occurs due to change in
industry or market. It may be due to economic shift, technological change, deregulation, etc.
Change in perception- there might occur change in perception of people. due to it, needs and
wants are changed.
New knowledge – the new knowledge may allow company to implement innovation. it provides
opportunities for growth ( Hahn, Minola, and Eddleston, 2019)
P3 4P’s of innovation
Basically, innovation is implemented through a systematic procedure. In that strategies and
plan are develop and executed. So, there are two types of innovation usually implemented by
business. They are radical and incremental. In both type of innovation is done in different ways.
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It means that in radical new products are developed in terms of innovation. But on other hand, in
incremental new methods or processes are innovated. It is important for organisation to follow
4P’s of innovation. This provide an insight on what type of innovation has occurred and in which
area it is done. So, the 4P’s are as mentioned as :-
Process –
It is a type of innovation in which new process or methods are innovated. Here, areas are
identified which requirement improvements. Also, deficiencies are determined in those areas due
to which operational efficiency is affected. The process can be related to either production,
operational, supply chain, etc. basically, main aim of process innovation is to enhance efficiency.
New procedure or methods are developed to work upon. It enables in increasing productivity.
The changes made help to overcome loopholes.
Product
This P is related to development of new product and services. the product is developed by
identifying needs or trends in market. moreover, the innovation enables in ensuring long term
growth of Sainsbury’s. Through NPD, more customers are attracted. Apart from it, some new
features or specifications can also be added in to old product and convert it into new ones. So, in
this way as well product innovation can be done (Hohenberg and Homburg, 2019).
Position
This innovation refers to entering into new market or segment to attract customers. the
main goal is to create a unique and distinct image of particular product in new market. so, this P
of innovation helps in creating a new position among competitors within industry. this type of
innovation requires to identify new market and understand customer needs.
Paradigm
It is a P of innovation where models or process are identified for future. It allows
organisation to apply alternative models according to the framework. Here, short and long terms
goals are formed that allows business to apply innovation. With short term goals, an insight is
gained that how in future innovation can be implemented.
Innovation funnel – It provide an outline of how ideas that are generated can be executed or
implemented as innovation. Through the use of funnel, it becomes easy to filter and sort ideas
into innovation. The ideas are narrowed and then effective one is selected.
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Mouth of funnel: this is first stage where idea is generated. Then, different solutions are applied
to promote it in real life. There are things related to how innovation can benefit company. It can
help the company to find out an effective innovation which can be implemented.
Narrowing funnel: in this stage ideas are sorted and filtered on basis of goals. In this invalid
ideas are eliminated to focus on specific one. At this company screens different ideas on the
basis of objectives and during this various criterion are being considered like how to gain benefit
from it t how to minimise the challenges. This stage also includes analysis of cost, risk and
benefits or profitability, etc. (Kadir and Shamsudin, 2019)
Narrowed part: Here the innovation should be executed through a proper plan and then testing
is done and new product is being launched in the market.
M2 Innovation funnel in Sainsbury’s
In Sainsbury’s the idea of innovation came by applying innovation funnel. Here, steps
taken are as follows :-
Mouth of funnel- Here, managers of Sainsbury’s started collecting many ideas as possible. So,
ideas gathered were vegan food, packaged food, etc. for this market data and info was analysed
along with people needs.
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Narrow – In this stage, the ideas were narrowed and screened. Then, they are matched with
goals and objectives. so, in Sainsbury’s organic food idea was selected and then matched with
goals.
Narrowed – at last organic food idea was adopted. In this new product was developed and
offered to customers in the market.
M3 Evaluate role of frugal innovation
Frugal innovation plays significant role in organisation. In recent times, companies are
trying to emerge in new markets. It allows them to develop new products and services to fulfil
needs of people. basically, with low cost and unique features products are designed. Through it,
new markets are emerged (Ratten, 2019). However, frugal innovation leads to generate customer
value. it enables in attracting customers and gaining competitive advantage. Therefore, by
offering new products brand image is created and revenue is generated.
P4 Development in frugal innovation and provide example
Frugal innovation is method where process or methods are changed or modified in order to
reduce cost of products. Here, innovation is done on to focus on how cost can be decreased
through innovation. The utilisation of resources is done in efficient way. this benefits in
improving productivity and in business growth. Beside that, methods are redesigned in such a
way that loopholes are eliminated. However, frugal innovation helps in reducing removing
deviation and also in new product development. Alongside, many other changes are done as well
in regards to this innovation. so, in similar way, Sainsbury’s can also implement such innovation.
it is described as below:-
Similarly, in Sainsbury’s as well frugal innovation is done. the company operate in retail
industry and face stiff competition. They will have to sustain in market with help of continuous
innovation is products or services. however, organisation need to accomplish their goals and
objectives. thus, they need to reduce cost of operations so that huge revenue is generated. It is
evaluated that in retail sector profit margin is low. So, firms need to earn profits for their long
term growth and development (Capponi and et.al., 2019). Therefore, frugal innovation of
organic food is used by Sainsbury’s. with help of it, they will be able to produce goods at low
cost. moreover, it will enable organisation to attract more customers and generate revenue.
In this example of Apple can be taken. they developed high tech technological devices such as I
pod, I phone, etc. that offered high quality services and advance technology. Moreover, it
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included unique features. Through that company was able to gain competitive advantage and
attracted a large number of people.
Here, another example can be taken is of Tesla. In this the company manufactured electric car
that attracted people. they launched something new in the industry. so, it resulted in creating a
brand name in the market.
P5 Importance of the commercial funnel and application of new product development process for
innovation
Managing innovation is a critic task for an organization. After making plan and
developing a new product, it is important for Sainsbury's to maintain it for getting profit from it
for the long run. For this purpose, there are some innovation management tools or commercial
funnel which makes able to a constant stream of ideas that can be screened for viability.
Commercialization refers a process of converting ideas into viable products that retain the
desired functionality. There is some importance of innovation funnel such as:
Generating ideas: The main aim and core of commercial funnel or innovation funnel is
to generating many ideas as possible. Out of many ideas some ideas are refined and converted
them into concrete development plan. It creates a funnel like shape from lots of ideas to a few
ideas. Innovation and commercialization is an effective tool to prioritizing ideas and make sure
that the best and effective will be fully used (Straw and et.al., 2017).
Increasing sales: The main aim of commercialization of innovation is to take out the best
idea and when an organization put up the best idea in its product development then it helps them
out in attracting customers. It helps them in increasing sales.
There is a process of new product development that consists some steps such as:
Idea generation: Idea generation is the main and first step in which manager of
Sainsbury's requires identifying needs and demands of customers and as per that develop some
ideas. Organic food development is the best idea as people are becoming health conscious.
Defining concept: In this step company needs to illustrate product specification to the
customers. This step is also being followed by Sainsbury's to make their customers aware about
products specification and features. Product differentiation is the best strategy for completing
this step by which they can tell to customers the reason of their differentiation.
Analysing market: To know the market condition, current trends, political stability and
other elements in environment and their analyses is important before launching product into a
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market. It helps an organization in making some changes in product as well as setting up price on
the basis of analysis and customers' satisfaction.
Product development: After the step of market analysis, company requires to develop it
by designing in a way which can attract customers.
Commercialization: It is the last step in which company exhibit of products to the
market. In this step, there is a requirement of testing of products and then launch it (Rubera,
Chandrasekaran and Ordanini, 2016).
P6 Building an innovation by including ways to access funding
For working in an efficient manner and easily, it is important for Sainsbury's to enlist
some requirements for making an innovative business case. By measuring effectiveness, they can
analyse their actual position in the market (Schut and et.al., 2017). For making an effective
business case, it is important to include some produce development process, pricing strategy and
customer awareness program. Some steps of building an innovation and case are:
 The first step is to develop new product offerings. As per the requirement, adding some
innovative features and make their products more attractive is including in this.
 After that, company needs to consider some external environmental factors for making
the clear assessment of competition by identifying ways of marketing attractiveness. In
this stage, company needs to use business case which can take to provide the fit and
attract customers.
 For earning profits as well as generating revenue, Sainsbury's then require to set a
reasonable price for their targeted customers. For that they also require setting pricing
skill so that they can deliver products with a fair price.
 It is a promotional stage in which company requires to adopt or use the best strategy of
making aware to customers about features and qualities of new products. It is the way by
which Sainsbury's can increase and create an effective brand image as well as lead the
generation who works with the company. By using promotional strategies or activities it
can also get some investor for expanding business and products (Bogers, Chesbrough and
Moedas, 2018).
So, it can be said that for making an effective business case it is important to follow steps
in a systematic manner. By following all these steps in an efficient manner, Sainsbury's can
develop its new product and become the market leader. It can also be said that this business case
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model can be made effectively by 6 steps such as: the customer friction, new product concept,
unique concept, feasibility step, identify effectiveness and decision-making stage.
M4 Innovation business case and ways to measure effectiveness and testing improvements
The main aim of making an effective business case is to reduce uncertainties which can
create several problems in developing news product successfully in the market. Business idea
consisted of several steps by which an organization can solve all problems and accomplish its
goals such as: structure the project information on a comparable basis then make business case
by analysing cost and benefit, consider factors which can affect the performance and
effectiveness like competition and find out abilities of the company to execute plan and attract
the commitment. For measuring quality and effectiveness, customer lifetime value, customer
conversion rates and feedbacks can be used by the company.
P7 Different tools that are being used to develop, retain and protect intellectual property and
knowledge
Intellectual property considered as the main key and lifeblood of every organization. It
can be anything like a plan for a product, innovative idea etc. Intellectual property refers an
innovative, unique as well as value adding creation of the human intellect that results from
human creativity. It plays an important role in creating a new product or making a product
innovative. Intellectual property rights helps an organization in retaining its innovation based
advantage in a legal manner. It is important for the company to protect their ideas and creativity
from other companies to copy it (Abbott, Cottier and Gurry, 2019). There are several tools by
which Sainsbury's can protect, develop and retain its intellectual property and knowledge such
as:
Trademarks: Trademarks refer sound, symbol, phrases and names which are being used
in association with their products or services. It is also important which differ a company or its
brand with others and connect them with a level of quality. With the help of this tool, company
can improve its reputation as it lasts for 10 years after registration.
Patents: It is an effective tool which is mainly used for an invention of product. In this
type, patent holder is allowed to exclude its competitors and others from making as well as
selling the same product or invention. It is beneficial for businesses because with the help of this
they can develop better processes which can give them opportunity to take competitive
advantage. Plant, design, utility are some types of patent.
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Trade secrets: It can be a device, pattern and formula that give an advantage and access
to user over competitors. For using this tool and protecting secret, there is a requirement for the
company to prove that its ideas can will add value to the company. Survey results, customer lists
are some examples of trade secrets.
Copyrights: This type of tool or intellectual property protects written expression fixed in
a tangible medium like novels and poems. It can be said that it protects original work of
authorship like music, graphic works etc. In this, user has right to perform, create and copy the
work (Sople, 2016).
In the context of Sainsbury's, it can be said that with the help of employment agreements,
using effective data encryption and all above discussed tools of IP protection, it can protect its
innovative ideas and take advantage of development of new product.
M5 Evaluation of different tools in the context of wider business environment entrepreneurs
For managing business and maintaining privacy of all information like knowledge
innovative ideas and other things there are some tools are available by which, company can
prevent itself. Cyber culture, maintaining privacy by data encryption, providing training to
employees of using internet, cloud computing trademark, patent and copyright are some effective
tools and techniques. It does not only protect information and intellectual property of the
company but also help them out in managing business operations in an efficient manner. By
making an effective use of survey, feedback, 360 degree analysis and trademark company can
take competitive advantages.
CONCLUSION
From the above study it has been summarized that innovation played a vital role in
developing a new product and taking competitive advantages. There are several advantages
which an organization takes by using different innovative strategies and developing new product.
It has also shown importance of team working as well as organizational culture which helped
them out in shaping innovation and making effective products by taking different innovative
views from team members. Further, this study has discussed all 4 p's like products, price, place
and promotion which contributed a lot in making innovative products and services along with
frugal innovation that reduces errors and cost of production of the company. Making innovation
is not an easy task as company needs to invest more in several functions like research and
implementing tools and using the best way of accessing fund has also been shown. Some tools
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for measuring effectiveness of the performance and quality of new product has also been shown
in this study. Lastly, this report has shown some ways and tools to prevent intellectual property
which is the main lifeblood of the company.
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REFERENCES
Books and journals
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Online
Sources of innovation, 2018. [online] available through :
<http://www.incrementalinnovation.com/innovation-management-development/7-sources-
innovative-opportunity>
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