Innovation and Commercialization: Analysis and Development Report

This report examines the critical aspects of innovation and commercialization within a business context. It begins by defining innovation and highlighting its significance, followed by an analysis of how vision, teamwork, and organizational culture shape innovative processes. The report then delves into the 4 Ps of innovation (Process, Position, Product, Paradigm), providing insights into their application and impact. It further explores frugal innovation, presenting examples and discussing its developments. The report also covers the importance of the commercial funnel and its application in New Product Development (NPD), along with the construction of an innovation business case. Finally, it addresses different tools and strategies for retaining and protecting intellectual property (IP) and knowledge within an organization, providing a comprehensive overview of innovation management and its practical implications.

Innovation and
Commercialization
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Table of Contents
INTRODUCTION...........................................................................................................................3
P1 Explain innovation and its importance...................................................................................3
P2 How vision, teamwork and culture shape innovation............................................................4
P3 4P’s of innovation...................................................................................................................5
P4 Developments made in frugal innovation with examples......................................................7
P5 Commercial funnel importance and New product development application.........................8
P6 Innovation business case........................................................................................................9
P7 Different tools to retain and protect IP and knowledge........................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
In such a competitive business environment, it is necessary for companies to do innovation.
This enables them to survive in the market. Innovation leads to bringing new growth
opportunities to grow. Also, it supports in attracting new customers and expanding in new
markets. Furthermore, innovation leads to use of new technology in process or methods. So, this
results in decreasing cost and improving efficiency (Michaelis and Markham, 2017). However,
an innovated company is more capable of fulfilling customer needs. H&M is a Swedish clothing
MNC operating in 62 countries and having 4500 stores. It was founded by Erling Persson in
1947. There are overall 148,00 employees working in H&M.
The assignment will discuss on innovation and its importance. Also, it will explain how
vision, culture and team work shape innovation. Moreover, it will describe about 4 P’s of
innovation with frugal development and NPD case. At last tools to protect and retain IP are
explained.
P1 Explain innovation and its importance
Innovation refers to developing new products or bringing change in process or methods.
Every organisation require innovation in products or process to remain survive for long term.
With help of it, competitive advantage can be gained as well. It is able to gain competitive
advantage and offer variety of new products to customers. Likewise, new methods and procedure
allows employees to work in creative way. This improves their performance and goals and
objectives are attained. Moreover, when staff works in efficient way, a diversified culture is
developed. They bring in new ideas and suggestions through which change is implemented
(Presenza and et.al., 2017). Similarly, in H&M innovation will enable them to develop new
products.
High quality goods – Innovation allows organization to develop new products with high
quality. With this they are able to target new customers and generate more profits. It changes
process or method of doing work. Furthermore, quality of product is maintained that helps in
retaining consumer. However, employees also contribute by giving new ideas. They work in
creative way with improved or new methods. So, in this objective of improving goods quality is
also covered. Thus, it is stated that innovation is useful in developing high quality goods.
Providing modern tool – Innovation provide modern and advance tools and techniques
for employees to work. They are given proper training to use those tools. So, staff learn skills
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and knowledge that increases their capability and ability. Thus, they are able to work in more
effective way which enhanced productivity. Also, new goals and objectives are formed. The use
of modern tool is useful in improving weak areas. By working with new tools performance is
improved. The new ideas are shared and accordingly changes are made in process.
Building future- the main motive of innovation is it helps in building future. This means
to gain competitive advantage by providing unique and innovative products and services to
people. By this, needs of people are fulfilled. Innovation also support in changing taste and
preference of people. It also shapes future of industry by forcing other companies to innovate
goods. By continuous NPD there is rise in revenue. It also results in increasing customer base
and demand of product in new market. Thus, competitive advantage is gained for long term.
Other than it, organisation sets a strong base for future.
In this, an example can be taken where H&M is developing new products to attract
people. So, they are known as innovative company. Innovative clothing products like strain free
cloths, recycled material cloths, etc. are developed. Hence, with help of technology innovation is
done (Choi, Ruskov and Tsolova, 2016). It has taken attention of rivals like Zara, etc. to
compete with it by using technology as tool for innovation.
Innovation creates something new that is sold in market to fulfil needs. Whereas
invention only create something new but it is not sold. Innovation is practical implementation of
new ideas but invention is original idea and working in theory. Invention create new product and
innovation add value to product.
Innovation allows organisation to gain competitive advantage in market. By developing
new products, needs are fulfilled. Also, customer value is gained. However, it also enhances
efficiency and productivity of an organization. Innovation provides a platform through which
organization can expand in new market. But in invention only idea is created.
P2 How vision, teamwork and culture shape innovation
In innovation, it is required to create a positive culture so that it can be implemented
successfully. Basically, innovation refers to bringing change either in process, method or product
to improve its efficiency or quality. This process takes a long time so it becomes necessary to
ensure maintain culture. In organisation innovation is shaped by many elements that are team
work, vision and culture. Here, roles and responsibilities of employees, manager, etc. are
changed. Moreover, strategies and plans are developed that how innovation is done.
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There are several sources of innovation like new knowledge, necessity, changing
perception, etc. so, on basis of it, ideas are created and implemented practically. Thus, these all
shape organisation vision, culture and leadership.
A vision of an organisation states why they exist and what they want to become in the
future. Thus, if vision is not clear then innovation can not be done. Beside this, vision statement
enable business to make continuous innovation. Furthermore, vision support in innovating
products and making changes in process or method.
It is stated that leadership is also dependent on culture and shape innovation. Here, leader
apply different leadership style to implement change. They are assigned roles. Moreover, they
provide new ideas and way of doing task. Beside leader encourage employees to work
accordingly and attain goals. However, with change in organisation culture, leadership style is
also changed. Hence, leaders are responsible for implementing innovation. Leader guide and
train member to perform activities.
Organisational culture also shape innovation. This is because there is change in roles,
process, duties, etc. which directly impact on culture. Moreover, goal and objectives are also
changed. Here, employees have to work in new environment. They learn and gain knowledge
about various things. Thus, there is a creative and positive culture all around organisation.
Innovation require effective team work to be followed. It enables in performing task in
different way. Team work plays crucial role in shaping innovation. Each employee is assigned
different task or duties (Colombo and et.al., 2017). Furthermore, different goals are formed and
allocated to team. In that, member contribute by performing activities and tasks. However, teams
are formed in various department on basis of function and innovation type. Along with it,
diversified people contribute in unique way. So, this leads to bringing efficiency in
accomplishing goals and objectives. Thus, it helps in shaping innovation.
Thus, it is analysed that team work, culture, leadership, etc. shape innovation. It directly
impacts on way of performing task or activities. It allows staff to work in differently as their
roles are changed. Moreover, commercialisation is interrelated to innovation. The main aim is to
generate revenue or gain something in terms of finance. This enables in conquering market and
raising high profits.
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P3 4P’s of innovation
In innovation there are basically 4 P’s that helps in bringing change. In this, there are two
elements that is radical and incremental. The first one is related to developing new products and
second is to change procedure or methods. Usually, radical innovation is done in many
companies. In this, product features are added or changed in such a way that it results in
developing new one. Along with it, incremental innovation is done as well. However, there are
not as many changes required in it. The 4 P’s of innovation are:-
Process- It is related to bringing change in procedure or methods in operation. This is
done to improve operational efficiency (Marx and Hsu, 2015). Also, loopholes are identified
and changes are made in form of innovation. Through it, costs of production are reduced. The
organisation has to use new machines and tools to bring change in process. Employees are
assigned with new roles and duties. This changes overall procedure of performing task or
activities. It benefits in increasing productivity as well. Short term goals are set and then
compared with set standards. Similarly, H&M can make changes in their operation process.
Position – This is related to finding out new markets to attract more people. The main
aims is to expand business into different markets. For this, market research is done that enables
in identifying customer needs and preference. Then, segmentation is done on several criteria. It
enables in changing position of company and establishing it in new way. Likewise, H&M can
expand in new markets and improve brand image. The use of social media can benefit in
attracting new people. Moreover, by offering discounts, coupons, cashback, etc. company can
gain market share. However, needs of people are determined that makes it easy to develop new
products.
Product – As name depicts this innovation offers new product and services to people.
The innovation is most commonly used as it ensures long term growth and development in
market. Furthermore, it benefits in gaining competitive advantage. New product development
leads to bring overall change in process, roles, etc. (Wynarczyk, and Ranga, 2017) Also,
resources are used and strategies are developed for it. H&M can develop new product in clothing
segment.
Paradigm- Here, innovation is different from all other types. In this, a proposal is
developed for future. It includes both short and long term goals and objectives which gives an
insight that how innovation is implemented. Also, how and what process or methods will be
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changed. Besides, the roles, duties, etc. product features are to be included. Furthermore,
paradigm contain details of business model as well. So, H&M can also make innovation in their
business model. It will be easy for them to gain market share and compete with rivals. Also, by
making changes in model, operational methods are modified. Thus, overall goals are attained by
this.
Innovation funnel is a framework through which ideas are generated. It is a process
followed where idea is successfully implemented. There are several steps that is included in it
which is explained below :-
Mouth of funnel- It is first step where all ideas are gathered. Then, on basis of it solutions are
found. So, it enables in finding out effective innovation that can be implemented. It provides a
clear insight on what type of innovation is required. The basic or non required ideas are dropped
at this point. H&M can gather data from market related to types of clothing material.
Narrowing funnel- In this ideas are screened on basis of goals and objectives. For this several
criteria are considered such as how it will benefit, challenges, etc. the innovation should match
with company goals. Moreover, it includes cost benefit analysis, risk, etc. for screening. In that
resources are included through plans (Lehtimäki and et.al., 2017). Company can develop new
product according to their goals.
Narrowed part - the innovation is executed through ideas or plans. The testing is done and new
product or process is launched. It enables in achieving goals and objectives. Innovative idea can
be executed in it.
It can be used by H&M by gathering data from market. They can evaluate it and find out
solution. So, on basis of it objectives can be set and innovation is done. Hence, new ideas will
help in developing new clothing product.
P4 Developments made in frugal innovation with examples
Frugal innovation can be referred as a process of decreasing the complexity of the
business as well as decreasing the cost of goods and cost of production. As H&M is a clothing
retailing company and with the help of a frugal innovation, it can achieve its objectives of
minimizing its costs. This particularly refers to elimination of non-essential features within the
products of the company and increasing the durability of products. H&M deals in retailing
industry and has to face huge competition and in order to remain competitive in the market it is
really vital for the company to innovate its products and services which are offered to customers.
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So, company needs to develop various innovative strategies for achieving competitive advantage
over other companies. This can be done with the help of frugal innovation, as it is more than a
strategy as it helps in developing a new frame of mind which helps in identification of new
possibilities and opportunities and within the frugal innovation, the strategy is not to provide the
wow factor to customer, Instead the strategy is to create a good quality product to customers
which can provide a greatest value to customers in a low cost (Lopez-Valeiras, and et.al., 2015).
A company can adopt this strategy by minimizing the use of resources within the development,
delivery and production and can also be achieved by the process of leveraging the new and
innovative ways which can help the company to dramatically lower the cost of products. The
successful frugal innovation does not only result in the reduction of cost and complexities but,
also outperforms various alternatives which can be available by the company at large scale.
Frugal innovation can be found in various companies which can be explained by various
examples:
Sale of Samsung products was low and before shifting to android operating system and
after the introduction of Samsung Android, the sale of the company has grown rapidly till and
has excluded its neck to neck competitor Nokia. Nokia has failed to innovate but Samsung was
able to do the same in less cost and adding features to its existing mobile phone which is the best
example of innovation funnel.
In similar way H&M can do something different from its competitors by adding features
to its products like quality and making change in their designs which can attract the potential
customers. By introducing new feature which is unique at low price is the best strategy for
company to attract customers without compromising with quality. It can help company to gain
competitive advantage and higher profitability.
Another example frugal innovation is Apple which has been able to provide quality
services and distinct feature for its products like IOS operating system for its mobile phones
which was a unique as compared to other companies (Ganjeh, Khani and Tabriz, 2019). This
concept was liked by the customer which resulted in its growth. Similarly, H&M can improve its
process of production of its clothes by adding distinctive features like stain proof clothes in all
segments can help the company to increase its sales. So, company can adopt frugal innovation in
order to make various development in their products and process that can result in growth and
success of company.
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P5 Commercial funnel importance and New product development application
Commercial funnel is also referred as sales funnel; it is the path that customer’s take in
order to buy a product or a service. It is important for the company to understand the sales funnel
as it will help in finding the holes in the funnel, the place where a customer drop out and never
returns. By understanding the sales funnel it is H&M can optimise it and develop strategies for
attracting potential customers. It includes 4 strategies such as awareness, interest, decision and
action which repents the prospective of customer. Each of the stage requires different approach
from then marketers in order to attract customers.
Awareness: This refers to moment where company catches customer’s attention then company's
prospect becomes aware what a company offers.
Interest: In this stage company must publish its products in order help customers to make
informed decision.
Decision: In this stage customer is ready to buy and this time a company should provide best
offer.
Action: In this stage customer acts where a customer makes a purchase and becomes a part of
business ecosystem.
By understanding all the stages of commercial funnel company can increase it sales and
also provides opportunity for growth and expansion (Gbadegeshin, 2018). In new product
development there are various steps which are to be followed by company to develop a new
product. H&M is a retailing company and within the industry there will be bulk of similar
products available so developing a new product can be an effective strategy for the company in
an industry.
Commercialisation: This is the process of targeting a specific area for launching new product
new product in a market.
Business Analysis: During the analysis of new product development, H&M can determine the
cost of product, return of investment and profit margins to be set.
NPD can prove beneficial for the company due to various reasons which are as follows:
Generation of new value: New products can help H&M to develop new value for products and it
is necessary for company within the retailing sector. Company can provide extra features in its
new products which can be beneficial for potential customers.
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Long-term growth: As company faces a stiff competition in the market by developing a new
product company can remain competitive and achieve higher sale which can ensure the long-
term growth.
Improved life style: NPD can help the customers in improving their lifestyles and it can provide
extra benefits to customers in fulling their needs of clothing.
Thus it can be said that NPD strategy for company can be advantageous in many ways as
it also gives an opportunity to company to fulfil the needs and desires of customers in the long
run. It also gives an opportunity to improve the quality of products and attract customers.
P6 Innovation business case
H&M is developing a new product which will be called stain proof clothes, these will be
clothes which does not get stains by developing a waterproof layer over the fabric of clothes.
This product will be provided at affordable costs to customers (Akoum, 2016)
H&M is going for innovation as there has been rise in competition of company as many
companies has been introducing similar products in the market which are offered by H&M. Also,
this has resulted in various options available to customer while making a purchase. This has
resulted in the decline of sale of company over past years. Also, many similar products are being
launched by its competitors which have made it difficult for the company to attract customers.
So, there has been a need of innovation in the products which are being offered by the company
which help the company to increase its sales and attract customers at affordable costs.
H&M dealing in a retailing business of clothing by developing a product which is
completely different for its competitors can help the company to increase its sales and achieve
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higher profitability. Also, process of new product development will result in generation of new
ideas and make modifications in their existing products which can increase the quality of product
and adding feature and specifications (Clouse, Wilson and Rizzo, 2019). NPD will also help
the company to develop new strategies for improving the business operations and supply chain
activities which can support the new product in reaching the final customer of the company. For
developing a new product, it is required to make different resource easily available like raw
materials and funds required for it. As H&M is a company with strong financial position within
the industry. So, based on the financial position of the company, it can easily acquire funds for
developing a new product and can also acquire funds from different sources. Some of the sources
of funds which are available for the company are debt capital where a company can borrow
money privately from banks like loans or it can be achieved through publicly through debt issue.
Another options which are available for the company is equity capital in which a company can
sell a part of itself in a form of shares to various investors and this is known as equity funding.
So these are the sources of funds which are available for company in developing a new product
and can even use its financial strength for developing a new product. Before selecting a source
for funds it is required to develop a proper budget for where a company can get estimate about
the total finance to be required for developing a new product, Also, company allocate some
funds for its marketing campaign in order to attract the potential customers and generate
awareness about the new product which is to be lanced in the market.
P7 Different tools to retain and protect IP and knowledge
For an organisation it is important to protect their IP so that no other company can copy
product, service, process, etc. (Mohan, 2016). Generally, IP is used to protect formula,
procedure, etc. used or implemented by one business. This ensures that competitor is not able use
similar things (IP rights, 2019). However, it also protects confidential data and information
related to product. Beside this, innovation brings in new procedure or product feature. So, this
has to be protected and preserved. There are different tools available to protect IP and knowledge
which is defined below :-
Patent- It grant right for organisation to reserve or protect any invention. This restrict other
companies to sell, develop, etc. any type of similar product or service. This gives competitive
advantage in market. It is categorised on into 3 that are utility, design and plant patent.
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Generally, utility patent is mostly used as it covers process, composition of matter, etc. Thus, it
provides legal right for company to protect its IP.
Copyright – generally, it is not related to business as it covers right or authorship of work like
art, music, sound works, picture, etc. here, copyrighter has right to modify, create, display work.
They grant permission to other for copying their work. However, it requires systematic
procedure to be filled in order to take permission. Beside this, a fee is also paid for it.
Trade mark- This is a way of preventing IP which include symbol, design or services of
business. This enable in differentiating one company from another. Also, wit help of logo,
symbol, tagline, etc. company products can be easily distinguished. However, it reserves several
elements that ca not be copied by other firms.
Trade secrets – It includes formula, process, methods, etc. of particular product or service. The
examples are algorithms, formula, etc. used by company (Michaelis and Markham, 2017). In
this steps or procedure of specific thing is included. This restricts other organisation to use or
adopt similar steps.
Thus, these all the different tools that can be used by organisation to protect their IP and
knowledge. It grants them legal right and restrict rivals to copy product features, process,
formula, etc. In addition, protection of knowledge allows in gaining competitive advantage by
offering innovative products. Henceforth, when confidential information is protected it leads to
rise in competition level. Companies make more efforts in developing product. They also try and
apply new ideas or concepts in innovation. For this there are many changes done that enforces
organisation to use or apply new formulas, features, methods, etc. for innovation. it may be in
terms of radical or incremental innovation. So, in both it is required to protect knowledge or IP
and restrict rivals to use or implement it.
CONCLUSION
It can be summarised from above that innovation enables in attracting new customers and
expanding into new markets. In this either new product is developed or procedure, process, etc.
is changed. Its importance is it provide modern and advance tool or process. Also, organisation
can gain market share in future. Moreover, team work, culture and vision is shaped by
innovation. There is change in roles, goals, etc. that directly impact on culture. In addition, there
are four P’s of innovation that is process, product, paradigm and position. It is also concluded
that NPD provide a base for developing new product. In NPD and innovation funnel H&M will
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develop stain proof clothes. It will attract new customers and generate revenue. An organisation
can protect their IP and knowledge through patent, copyright, trademark, etc. this protect
confidential information and data.
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