Innovation and Commercialisation in the Retail Sector

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BUSINESS INNOVATION AND
COMMERCIALISATION
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Table of Contents
Introduction................................................................................................................. 3
LO1 Explain the context for innovation and determine the difference between
invention and innovation............................................................................................. 4
LO2 Explain the different types of innovation..............................................................7
LO3 Discuss the process required to commercialise innovation (1000)....................10
LO4 Evaluate the range of methods for protecting ideas and understand their
advantages and disadvantages................................................................................ 13
Conclusion................................................................................................................ 14
Reference List...........................................................................................................15
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Introduction
Innovation is a concept that various organisation incorporate to implicate major
reformation in their business structure. Innovative idea helps the organisation to
conduct the business with new approach or company wants to launch new product.
Thus, innovation brings commercialising in organisation’s business process. In this
context, Morrisons Corporation is selected as organisation in this discussion for
understanding the different scenarios of innovation and commercialisation. Morrison
plans to launch free wagon cookies in its existing market (PLC, 2019). The first part
explains influence of organisation’s vision, leader’s activities in reference to
innovation and importance of innovation is explained. Different theories and
concepts of innovation have been discussed in the organisational context.
Commercialisation funnel has been explained to understand the different phase of
product from raw material to end user. In order to protect these innovative idea and
intellectual resources of organisation, different tools are available that facilitate
protection to intellectual resource from unauthorised elements. Therefore, these
tools are described in the last section of this report.
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LO1 Explain the context for innovation and determine the difference between
invention and innovation.
Morrisons Corporation is giant food retail that conducts its business in the global
scale. In order to expand the market, Morrisons need to innovate its business idea
so that organisation can segment more in the UK market and global market for
increasing its customer base. Innovation is a process where organisation brings
change in its strategies, approaches, product and services. Innovation is done for
enhancing the valuation of product and services of organisation (Pinto et al., 2017).
Therefore, for developing the features of Morrisons services, different strategy and
concept need to be incorporated to meet the requirement of business. Invention is a
creative idea that has not been generated earlier by any individual or company in
organisational context. Thus, Morrisons Corporation faces tough competition in retail
industry if UK market is considered. Inventive strategies and approaches of
organisation would help the company to sustain its business in competitive market.
Importance of innovation to Morrisons Business
Technology
Morrisons Corporation has taken an innovative idea to speed up its operation and
management. The company has incorporated the concept of artificial intelligence
and cloud-based system in its operation. Morrison can track its inventory items sku
through Artificial intelligence (AI) based technology. AI based technology enable the
management of Morrisons to predict the customer demand for product per store by
analysing its current business record (Pantano and Gandini, 2017). This
technological innovation in organisation system enhances the speed of its operation.
With this technological innovation, organisation would be able to track the demand of
its new product sugar free wagon cookies.
Competition
In the context of Sorace et al., (2017), the innovative idea in different functional units
of Morrisons Corporation would give a competitive advantage over other retail
industry. Morrisons sugar free wagon cookies will attract the customer those are
health conscious. These sugar-free cookies also attract the diabetic customer in the
international level and this will make the customer base stronger. This increases the
product consumption and revenue generation for organisation in its existing market.
This also increases the consumption of other products launched by Morrisons
Corporation due to its new product because of its health-oriented feature.
Customer Relation
Customer demand changes according to the product and services of organisation.
Thus, organisation should analyse the features of product before launching the
product in a market that made the requirement of customer consistent. This
requirement of customer helps the organisation to make relation better with
customer. The innovation in the business of Morrisons Corporation would make
better relations with its customer in the existing market. The sugar free wagon
cookies influence the perception of customer toward the services and products of
Morrisons Corporation.
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Operation
Morrisons Corporation brought innovative idea to launch sugar free wagon cookies
for all type of customer. Thus, a change in the approach for conducting business
from the perspective of product and services also change the operation of
organisational different units. Therefore, sales and marketing department, Research
and Development, IT, Operation would change their way to work in Morrisons
Corporation in order to enhance the productivity and consumption of Sugar free
cookies.
P2 Explain how organisational vision, different leadership quality and culture
influence the innovation and commercialisation
The vision of organisation influences the innovation and commercialisation. An
organisation form vision for achieving the long term goal. This makes organisation to
bring some specific changes in its product and services. Consequently, the complete
methodology of processing the product brings a new approach in organisation’s
business. Due to vision, organisation started incorporating new strategies in its
system to produce new and more efficient business. In this situation, leadership
strategies required to handle the team efficiently and efficient team contribute for
bring innovative outcome in its business. In the same way, culture of an organisation
influence the working style and approach of operation in business, then operative
innovation brings commercialisation in the technique of production and distribution.
Vision
Morrisons Corporation has vision to expand its customer base consistently in its
global market and UK market. This vision gives long-term benefits to business of
concerned organisation. Vision of organisation is responsible to form different
objectives in order to achieve target.
Different leadership approaches influence the innovative idea of Morrisons
Corporation. In order to launch new product, organisation has to go through different
phases of its operation. Therefore, efficient leadership approaches would motivate
employee to work efficiently that lead the organisation toward its goal. Therefore,
different leadership styles are described below:
Autocratic Leadership Approach
In this type of leadership style, leader and manager takes decision without consulting
its team member (Hoogh et al., 2015). The rules and regulation to follow the
business process are strictly followed and there is no flexible environment for
employees. Generally, such leadership styles are not preferred by organisation as it
might affect negatively on organisation. Thus, autocratic leadership approach is not
fit for innovative idea and commercialisation.
Democratic Leadership Approach
In this type of leadership style, leader or manager inspire the employee to participate
in decision-making process (Eizaguirre and Parés, 2018). Leader takes the final
decision but they always consult their subordinate for finalising their decision.
Therefore, democratic leadership is preferred by the organisation as it is fair
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approach from both employee and employer aspects. Thus, this leadership style is
preferable for innovation and commercialisation.
Strategic leadership Approach
Strategic leadership approach involves a person who is head of organisation
participate in decision-making process. In this strategic leadership, the participation
in decision-making happens from lower level to top level in an organisation (Eva et
al., 2018). Thus, there is more chance of creating innovative idea when all level of
members of organisation participates. Therefore, this leadership approach is very
much preferred by organisation and it creates an optimistic environment for
innovation.
Transformational Leadership Approach
In transformational approach, leaders inspire its team members to participate in
decision-making process (Wang and Cruz, 2018). In this leadership style, other staff
participate more in compare to originally aspect from the staff. Transformational
leadership style is used to achieve the challenging task. Transformational leadership
is most preferred approach that organisation opt for managing the team.
Morrisons Corporation will not adopt the autocratic leadership style as it might
hamper its business and corrupt its innovation and commercialisation. Morrisons
would adopt other leadership style based on varying situations of business. These
varying situations build up a culture in the organisation.
Different leadership style convey the fact that culture and teamwork is responsible to
create a vision so that innovative idea can be generate. Management of particular
organisation collect the insights of customer and frame it to bring innovation in its
product. This framing of information regarding interest of customer and choices is
based on culture of organisation and teamwork.
Good teamwork is efficient communication, coordination, supporting to one another
in a team that helps in any type of innovation and commercialisation. Innovation
brings change in each functional unit of organisation and that influences the working
style of employees in the team. In order to maintain the changes in business
process, the collaboration among the employees helps to sustain the innovation
brought by management of organisation. Morrisons Corporation has brought
innovation by launching sugar free wagon cookies and that is going to influence its
all operational units.
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LO2 Explain the different types of innovation.
4ps of innovation
Figure 1: 4ps of innovation
(Source: Ravishankar, and Gurca, 2016)
Innovation is the concept or strategy that is used for developing the product
specifications in order to achieve new growth in the target customers. In order to
bring sugar free wagon cookies in the existing market, the organization needs to
calculate the forecast of financial growth and brand position in business. Innovation
strategies of Morrison can be analysed using 4ps of innovations. As mentioned by
Johnsson (2017), 4ps of innovation strategies helps in improving positioning and
product process effectively. The main components along with detailed explanations
are explained below:
Paradigm: This is an innovation done for changing the traditional marketing
approach to technology innovation approach. Paradigm innovation is the primary
start of global transition where use of advanced technology is developed for gaining
convenience in marketing. Morrison is found to use cloud computing technologies to
respond their customers quickly. Implementation of AI based technology has helped
in changing the customer demands. This can help in developing the new product in
the UK market smoothly. This technology has helped the retailers of Morrison to gain
ease in calculations and 13 million automatic decisions every day (Lemmon, 2017).
This new technology in business can help in bringing more accuracy and
consistency in their business system than before. Hence, it can be said that this
radical innovation can be high used in this organization for introducing the new
product in market.
Product: Product innovation is the main component that comes in the mind for
making changing the product services that are offered by the organization. In
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Morrison, it is found that wide range of product are offered under the brand Just for
Kids, M Kitchen, Brand Morrison Cellar and others. The company is expert in
preparing and delivering fresh products. It is found that they are having their own
manufacturing production service facilities that ensures to product best experience in
their products (groceries.morrisons.com, 2019). The idea of launching new sugar
free wagon cookies would provide equal attention to the features, appearance,
quality, and packaging of the food items. Moreover, a separate research team would
be allocated in the organization for checking the tastes in the cookies product. This
development of new products is termed as Incremental innovation strategy that can
be used by the organization to establish their new product.
Process: Process is the factor of innovation that aids the company to enhance the
marketing branches in different locations. In terms of process, Morrison can choose
to provide lowest price of the new product on a permanent basis that can help in
creating a competitive advantage in retail market. Morrison provides multichannel
experience by establishing online stores. As suggested by Akgun et al. (2017),
consistent customers in business helps in delivering wide range of shopping
environment by demonstrating large variety of fresh food. This enables the
customers to choose the most effective product at the affordable price value.
Position: Position is another innovative strategy that enables the business to gain
new customers. As for example, Morrison delivers the products across entire UK
having more than 660 stores among which 150 stores are convenience. Sugar free
wagon cookies would be delivered in every stores of Morrison. Establishing of one
national centre and some regional distributive centres can help the company to
developing positioning strategy. The company has developed service agreement
with company Ocado that is a form of radical innovation strategies. This can enable
the firm to provide home delivery services using their official website.
Use of innovation funnel
Innovation funnel is common model that is used by the companies for evaluating the
ideas and concepts of the products. As commented by Flores (2017), building
innovative funnel in organization can enable to bring innovation with strategic
thinking. The only possible way for gaining competitive advantage in business is to
develop open innovation funnel. The company can use this model in order to
improve its business strategies. Morison can use innovation funnel for improving
patent quality, developing flexible process, providing protecting trade secret and
implementing business strategies fruitfully. The company has to invest huge amount
in developing the business as other competitors in UK retail market such as Tesco,
Asda, Sainsbury and others are having strategic position in business.
Hence, to improve the success rate of the business in the launching of sugar free
wagon cookies, the company needs to use the innovative funnel to place the
product in the existing market. This model would help the company in protecting the
trade secret of the new product which is important to create difference with the
competitor’s product. As explained by Josimovic (2018), benchmarking of the
product can be set using innovative funnel which would help in target the potential
audience. Analysing this funnel, it can be said that feedback test is the main method
for understanding the customer preferences about the new products which would be
beneficial for bringing new modification in the product.
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Development in frugal innovation with examples of organizational context
Figure 2: Frugal innovation model
(Source: Weyrauch and Herstatt, 2017)
When a product is launched, frugal innovation is used in business for achieving
sustainable growth. Weyrauch and Herstatt (2017) stated that frugal innovation can
be created by the organisation using process such as circular economies, open
innovation, maker movement, co-creation and unique business. In case of launching
of sugar free wagon cookies, it is important to decide the types of ingredients and
flavour that would be provided in this product. Open innovation strategy would be
used where product specifications and its benefits would be highlighted among the
targeted customers. As the obesity level among the UK population is high,
developing this product with low-added sugar is a co-creation strategy for
attracting majority of customers effectively. About 40% of the UK customers are
conscious towards their health; hence, marketers of Morrison can use social
innovation where they can deliver their key marketing message for the new product.
The mentioned firm in the introduction of the new product can apply frugal innovation
by demonstration commercial advertisement. They can launch new advertisement
strategies with tagline like “proven quality” and “affordable price” for gaining
attraction of the customers. Economic value of the product would be taken into
care, hence, launching the product at a minimum price or providing discount on
buying of more than two packets of sugar free wagon cookies can help in sharing
message of economic value in the new product.
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LO3 Discuss the process required to commercialise innovation
Figure 3: Commercial Funnel for Morrisons Corporation
(Source : Weiss, 2018)
The commercial funnel is a concept that is used for commercialising the innovation.
The commercial funnel is divided into three phases that include marketing funnel,
sales funnel and customer funnel.
Marketing Funnel
Awareness: In the stage of awareness, the organisation makes its targeted
customer be informed about its innovative product. Customer remains unaware of
organisation product and services when marketing funnel remain in awareness stage
(Colicev et al., 2018). Therefore, Morrisons Corporation has to provide relevant
information about its innovation through online resources or print media. Digital
marketing is efficient technique to reach the customer and it will indicate the
behaviour of customer toward its product. Newspaper is another efficient medium to
promote its product to show its customer
Consideration: In the next stage of marketing funnel, customer would consider the
product and company after becoming aware about its product. This stage is known
as consideration. Marketer conducts several types of strategies to inform the
customer about the product such as email marketing, case studies etc.
Conversion: After customer considers the product, company must explain the
reason why customer buys it and this stage is known as conversion (Lamey et al.,
2018). In this stage, the benefits of product are described to the customer, or
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showing off different qualities of product to customer. In this conversion process,
company must create urgency by providing strong reason to customer for buying the
product.
Loyalty: Loyalty is that factor which decides the long-term benefits in business for
an organisation. Therefore, organisation should put content in mail in that way which
provoke customer to be loyal for organisation product and services.
Advocacy: This is a stage where consumer advocates for the organisation’s product
and service. This type of customer repeatedly buys the product and comment on
social media in favour of company services and product. This stage is most valuable
stage for the company where customers feeling associate with the service and
goods of customer (Duke and Ashraf, 2019).
After marketing funnel, the commercialisation stage goes to sales funnel where
management make contact with customer.
Sales Funnel
Theoretically, the sales funnel is one stage step where the organisation sells its
innovative product to its customer. Literally, there are many steps involved in the
sales funnel which sale department of organisation has to conduct in order to
generate a lead. In this process, it starts with pitching about the product to customer
as customer is already informed about product by marketing team. After pitch made
to customer, demo is schedule where time for meeting with customer is decided.
Then, demo is given to customer in the planned schedule about the product. In the
last phase of sales funnel, price negotiation happened with customer for product and
then the sales department closes the lead (Sciarrino et al., 2019).
Customer Funnel
The customer funnel is the stage that comes after sales funnel. In this stage,
consumer wants to purchase the product and consume the product. In the stage,
customer loyalty is considered in the organisational business context.
Thus, Morrison Corporation can implement this approach step by step in their
business. In the same way, organisation can develop its product by several
approaches which are mentioned below:
The New Product Development (NPD) has eight stages and each stage has
features to develop the quality product for an organisation. Thus, these eight stages
are depicted below: Creating Idea: To develop a product, it is very important for an organisation
to generate idea for making product. Thus, idea can created by taking
feedbacks from the customer, from employees and other stakeholder of
organisation (Relich and Pawlewski, 2018). Most efficient feedback for idea
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