Innovation within a Small Business Context: A Detailed Report

This report provides a comprehensive analysis of innovation within the context of a small business, using Chilly's as a case study. It defines innovation and its importance compared to invention, exploring how organizational vision, leadership, culture, and teamwork shape innovation and commercialization. The report delves into the 4 P's of innovation, the innovation funnel, and frugal innovation, providing practical examples. Furthermore, it examines the commercial funnel, the application of New Product Development (NPD), and the building of an innovation business case, including funding strategies. The report also evaluates tools for knowledge and intellectual property protection, concluding with a summary of key findings and recommendations for fostering innovation in small businesses.

Innovation within a
small business context

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Explain innovation and determine its importance to organizations in comparison with
invention.................................................................................................................................3
P2 Explain how organizational vision, leadership, culture and teamwork can shape innovation
and commercialization............................................................................................................5
TASK 2............................................................................................................................................7
P3 Explain the 4 P's of innovation and explain the use of the innovation funnel to examine and
shape innovative ideas............................................................................................................7
P4 Explain developments in frugal innovation and provide examples of how it is used in an
organizational context............................................................................................................8
TASK 3............................................................................................................................................9
P5 Explain the importance of commercial funnel and the application of New Product
Development (NPD) processing for commercialisation of innovation..................................9
P6 Build an innovation business case for an organisation, including ways to access funding10
TASK 4..........................................................................................................................................11
P7 Evaluate the different tools that organizations can use to develop, retain and protect
knowledge and intellectual property....................................................................................11
COCNLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Innovation is defined as activity and process for conversion of new ideas and thoughts
into goods and services that possess value and consumers pay for it (Blackburn, Hart and
Wainwright, 2013). This can be process for making modification and changes in existing
products and services of organisation in order to earn high profits margins and satisfying
requirements of consumers. Similarly, commercialisation is defined as way of bringing new and
innovative products and services at market. This includes different activities like manufacturing,
selling, distributing, customer support and many more. The given report is based on Chilly's
which was founded by Tim Bouscarle and Butterfield in 2010. This focus on offering people
with cold water on the go in order to avoid single use plastic bottle. The report will discuss about
innovation and importance in context to invention. It has also covered 4P's of innovation and
using of innovation funnel to know about new creation. It also highlights about importance of
commercial funnel, innovation for business case and application of new product development.
TASK 1
P1 Explain innovation and determine its importance to organizations in comparison with
invention
Innovation
This is defined as procedures in order to make innovative in existing product of
organization and doing new in unique and attractive way for products and services of business
(Bridge and O'Neill, 2012). It is regarded as activity in order to implement new ideas and
thought through which enterprise can provide variety of products to their users by making
alteration according to their requirements.
Importance of Innovation
Innovation is very importance at workplace as it assist in providing boundary in
identifying market in quick and easy way as it offers high products to users which helps in
maintaining relations for developing markets that leads to grow bigger. In context of Chilly's,
innovation is important for generating new business which is cardinal source of development and
success of organization. It is important for company to do innovation that assist in making proper
improvement and development of products and services as per specified target people. The
importance of innovation in context of respective organization are:

Satisfying Customer Needs- People of today's era are health conscious and prefer reuse
products (The Importance of Innovation, 2019). The respective organisation focus on fulfilling
need and demand of consumers through innovation by offering them reusable bottles. It assist in
enhancement of sales and profitability.
Gaining Competitive Advantage- Innovation helps in gaining competitive advantage by
offering products and services as per consumer requirements. Chilly's can get competitive
advantage through compatibility of products from market. As it is manufacturing reusable bottles
in various size to gain competitive edge from market.
Invention
This is defined as new things that has made or created by someone or identification of
new ways for manufacturing goods and services (Chang and Hughes, 2012). It is referred as
specific process that offer new insight. Whenever organisation focus on innovation they required
specified area for doing invention.
Comparison Between Innovation and Invention
Basis for comparison Invention Innovation
Meaning This denotes occurrence of new
ideas for goods and services that
has never made before.
It is the procedure which focus on
improving products and services
with help of using new ideas for
first time.
Concept New idea is developed according
to theory.
There is functional executing of
new ideas.
Necessary skills It requires scientific skills
(Difference Between Invention and
Innovation, 2019).
It requires marketing, strategic and
technical skills.
Activities It is limited to research and
development activities.
It perform activities of extended
crosswise.
Invention and Innovation-
Invention is referred to introduction of an idea or process for the first time and involves
creation of a new product. Anew invention is significantly different from previous inventions and

some of them may be small improvements in already existing inventions. Inventions generally
happen when a new idea strikes the scientists and are concerned with a only a single product or
process.
Innovation on the other hand refers to a change inculcated already existing products that
adds value which in turn fulfils the customers’ needs and wants. The competition posed by
brands and companies today makes innovative thoughts and ideas more important to survive in
the market. Innovation does not lead to new discoveries (Arigaand et.al., 2013). While the
concept of invention is its working in theory, innovation however is the practical implementation
of the idea. Innovation is generally a result when a need is felt for improvement of certain
aspects in the existing products.
P2 Explain how organizational vision, leadership, culture and teamwork can shape innovation
and commercialization
There are different components that helps in offering high returns and achievement of
vision, leadership, culture and teamwork (Ghobakhloo and et. al., 2012). These are required in
business in order to accomplish goal and objectives for growth, success and development of
business. They are described below:
Vision- This helps in identifying upcoming aims, goals and objectives of organisation.
Here, mission and vision are formulate and set by help of administrator manager of company.
For instance, Vision of Chilly's is to intensify adoption and utilising everyday reusable products
in proper manner for better outcomes.
Leadership- This is defined as procedure of guiding and leading individual, team and
group of organisation for meeting desired set goals and objectives (Halme, Lindeman and Linna,
2012). The leader working in Chilly's organisation uses democratic leadership style in order to
make decisions for their team members to make innovative and unique products and services.
This leadership style assist business for manufacturing products and services in innovative
manner. With this leadership, sales and profitability can be maximised by leader to get attention
of different consumers.
Culture- This is defined as values, beliefs, and feeling of various consumers towards
something. It is knowledge and characteristics of particular group of individuals that includes
religion, language, social habits and so on. The respective organisation's administration
department manufacture good and service according to need and demand of consumers in order

to minimise cultural differences. Therefore, they have innovate product such as bottle as per
desires of consumers for recycling and reusing.
Teamwork- This is defined as action of group of people in order to work in team for
achievement of common goal and objectives by using knowledge and skill in appropriate manner
(Julien, 2018). This is beneficial for organisation as it helps in transferring products and services
to targeted consumers. For instance, Chilly's of employees has to perform teamwork which helps
in attainment of set goal and objectives in an effective and efficient manner.
Therefore, innovation helps organisation for maximising their customer satisfaction,
gross sales and attainment of competitive advantage from market. The provided components
helps respective organisation to shape commercialisation and innovation.
Concept of commercialization-
Commercialization means launching a new product or the method of producing it in to
the market. It involves three components namely- the ideation phase, business process stage and
stakeholder stage. When the product is actually launched, it is considered as the final stage of the
development of the product. Commercialization takes place when the following three issues are
satisfied-
Timing of launch – When there are chances of further improvement of a product or
when the economy is delayed, as a result the launch of the product is delayed.
Launch location – The product can be launched at a single location or multiple
locations/ regions at the same time (Calmels, Mfarrej and Chabannon, 2018). While smaller
companies focus on entering into cities or regions, larger companies focus on entering a national
or a global market.
Target consumers – Primary target consumers are identified initially by conducting
research ad surveys. This group of target consumers primarily consists of early adopters, heavy
users or opinion leaders etc.
The companies after carefully examining the market after conducting surveys develops a
viable action plan for implementation

TASK 2
P3 Explain the 4 P's of innovation and explain the use of the innovation funnel to examine and
shape innovative ideas
In order to do innovation, each and every members working in organisation has to
perform their activities and operations in an effective and efficient manner (Parida, Westerberg
and Frishammar, 2012). It is essential for business to analyse various factors to get success and
growth at marketplace in effectual manner. They are described below:
4P's of Innovation
In order to make proper development and achieve success, innovation is required as
essential components which leads to success and growth of business. 4P's of innovation are
described below:
Product- This is defined as an idea that is used for delivering process in order to create
own model that helps in generating excogitation and creativeness (4 P's of Innovation, 2003). For
instance, Chilly's refer company's product that are manufactured by it in terms of refusal bottle.
Process- The respective organisation consider all activities and actions from stage of
manufacturing to provide or offer to target people of business. This includes various process like
supplying, selling, distributing and others.
Position- This is affiliated to own concepts about perception of business towards their
goods and services in an effective and efficient manner. For instance, the target consumer of
Chilly's requires various size and design of bottles then they have to make innovation
accordingly and building brand position in order to fulfils their need and demand.
Paradigm- This includes manner and way which helps company to make innovation for
their products and services in proper manner (Anderson, 2013). For instance, if Chilly's
organisation focus on manufacturing goods through use of recycle then they have to manufacture
reusable goods and services as per requirements of consumers for maximum gains.
Innovation Funnel
This helps in defining steps that helps in processing commodity and process (Innovation
Funnel, 2019). Innovation funnel contains three main stages which are given below:
Mouth of Funnel- This is defined as first stage where organisation focus on developing
database and knowledge. The major purpose is collecting assorted sentiments with help of
assertable manner. In respective organisation, administration of business is collected through

partners, competitors, institutes, research. With their help and support they can collect data and
information and accordingly focus towards product innovation at marketplace.
Narrowing the Funnel- This is considered as next step, in which management of
respective uses thoughts and ideas that are collected by them with assistance if first stage of
innovation funnel model (Rahayu and Day, 2015). For example, the respective organisation's
administration can use proper information for creating competitions to competitors and making
modification in their products and services according to specified target group of people.
Narrow Part of Funnel- This is the last stage of innovation funnel, where organisation
ensure about information and data that are close for meeting goal and objectives of business.
Chilly's can manufacture fresh goods and services with aid of innovation and delivering at
market having motive of fulfilment of need and demand of consumers.
P4 Explain developments in frugal innovation and provide examples of how it is used in an
organizational context
Frugal Innovation
This is defined as activity for reducing and minimizing product cost as well as simplicity
or manufacture (Frugal Innovation, 2019). Such types of process is utilised and indicating about
relocation of non required characteristics of quality products and services. The frugal innovation
help Chilly's organisation to attain their success and growth from marketplace. The different
types of principle of frugal innovation that are applied by respective organisation are:
Find Opportunity in Diversity- In this principles, organisation has to grab several
opportunities from complex market or situation for achievement of better outcomes in an
effective and efficient manner. The respective organisation is using recycling goods for
manufacturing reusable bottles in an appropriate manner.
Do more with less- It is very important for company to get success and growth with
availability of resources in an appropriate manner (Sahut and Peris-Ortiz, 2014). For instance,
Chilly's is focusing on manufacturing reuse bottles with assist of waste and recycling materials
that is reusable in nature.
Thinks and act flexible- In order to think critically, data and information should be
examined in proper manner. The investigator can acquire and offer success of firm by doing
innovation. For example, the administration of Chilly's organisation gather and analyse data and
information about requirements of consumers regarding bottles that are required to them.

Keep Simple- The respective organisation has to provide simple solutions to the arise
problems in order to achieve high profits margins and sales. This make each and every task to be
simple and easy for better outcomes.
Follow your heart- This represents about those individuals who are passionate and ready
to perform their work and operations by utilising efforts so that goal and objectives of
organisation can be achieved in an effective and efficient manner.
Therefore, it is very important for respective organisation to use principles of frugal
innovation for effective production and maximising profitability and sales of business.
TASK 3
P5 Explain the importance of commercial funnel and the application of New Product
Development (NPD) processing for commercialisation of innovation
Commercial funnel
This can be define as a process or method which is very helpful in leading customers
towards organisation. Commercial funnel is also known as sales funnel and it is very important
tool for achieving goals and objectives of organisation. Respective company can increase its
sales and earn more and more profits with the help commercial funnel. This funnel can be used
by company to lead consumers during the time of purchasing products. This method will be very
helpful for respective organisation as it will help in drawing actual customers as well as
enhancing productivity.
New product development process
The application of new product development process carries stages which are described
below:
Idea generation- This is defined as first stage of respective process where company's
management gather ideas about product through internal as well external methods or sources
(NEW PRODUCT DEVELOPMENT PROCESS, 2019). The management of Chilly's has to
gather ideas about reusable bottles through wastage or recycling material from inside sources. In
order to introduce new goods at marketplace, several ideas and thoughts comes in mind of
creators which are included in respective stage for positive outcomes.
Idea screening- It is regarded as second stage of new product development process. In
this stage, the ideas which are made in first stage are analysed and utilised. The evaluation of

ideas are done as per requirement of business in which they evaluate which ideas will be
effective or not effective.
Concept development- It is the stage in which thoughts and ideas are transferred into
reality in order to gain competitive advantage at marketplace (Seebode, Jeanrenaud and Bessant,
2012). The respective organisation has to analyse each and every concept in detailed version for
providing meaningful information to consumers.
Development strategies- The plans and strategies of business are chosen by research and
development team of respective organisation. The administration department has to make
strategies, plans, regarding production, distribution, resource collection and many more for
manufacturing reusable bottles for their consumers in an appropriate manner.
Examine business condition- This is the fifth stage of new product development process
in which Chilly's examine business as well as environment condition in order to operate their
business at marketplace (Shaw, 2014). This helps to know about various changing factors of
environment which took place in business.
Product development- It is the stage in which organisation has to develop products and
services for their users along with collecting and monitoring resources required for
manufacturing products. The respective organisation will collect recycling materials for
producing reusable bottles in systematic manner.
Marketing Test- It is the stage where respective organisation after manufacturing of
goods and services, launch their product at marketplace in order to view reaction of their
specified people at first time. In order to know about product capability they have to sustain for
longer time period.
Commercialization- This is the last stage of product development procedure (Yin and
Zhang, 2012). It means launching product at market for their targeted people and consumers in
order to attract users for purchasing of goods. The management of Chilly's has to alter their
products and services in effective way so that consumers can buy products.
P6 Build an innovation business case for an organisation, including ways to access funding
Business Case
This is defined as written document that consists overview of reasons about why business
change or project has come through problem, opportunities and alteration in circumstances. In
context to Chilly's, it is the kind of decision making tool that assist in monitoring impact of

particular decision and profit margins of business. The various stages of business case are as
follows:
Summary- Chilly's is actively operating enterprise that was developed in 2010 by James
Butterfield in London (Zortea-Johnston, Darroch and Matear, 2012.). As it is operating business
in retail sector having 10-50 employees. Annual turnover of respective organisation is £2 to £10
million which is private organisation.
Objectives- The main objective of Chilly's is to manufacture reusable water bottles by
using recycling material and expanding firms at various geographical locations.
Solution- They have to manufacture reusable bottles by using waste plastic and recycling
material along with expanding business in various markets, nations and geographic for target
people.
Innovation in products- The respective company has made innovation in products for
first time in order to protect surrounding and fulfilling customer need and demand. In order to
manufacture reusable bottles, they have adopted technology for conversion of waste plastic
materials.
Research- Chilly's has to do market research and requirements of consumers through
online and questionnaire survey. This helps to make best decision for business.
Funding- In order to convert conceptualization and process in reality, management
requires funding. The respective organisation can use various sources such as bank loan,
stakeholders, investors, financial institutions and so on.
Benefits- The respective organisation can attain success and growth through innovation
of products. This assist in providing satisfaction to their target market to enhance profitability
and productivity to achieve competitive advantages.
TASK 4
P7 Evaluate the different tools that organizations can use to develop, retain and protect
knowledge and intellectual property
Intellectual Property
This is defined as immaterial artefact of human module (Blackburn, Hart and
Wainwright, 2013). These are regarded as ideas and thoughts that are made by person in order to
establish business with help of method, path and manner which cannot be implemented and

utilised. It is important for business to protect their rights through using of unique idea for
getting maximum return and market share. The different tools for business protection are as
follows:
Patent- This is inner rights which are configured by individual and registered under
national authority. This provide right to individual only for using kind of technology or
arrangements for business. It provide right to business person and determining about how they
utilised and ability for patent rights to others.
Trademark- This is regarded as right which is used by individuals for identification of
their own products from others (Bridge and O'Neill, 2012). It can be logo, name, symbol, sign
and others. With this one can easily identify from others.
Copyright- This is defined as legitimate condition for both written material work and
creator. This is like patent where individual who has filled copyright has right in getting access
to another copy their original work. This is occupied with national authority for protecting
original context that is done by original writer and author.
The above analysis conclude that respective organisation can use patent for their new
products in order to reuse bottle that is produced by waste materials. This assist in providing
protection and security from competitors so that other cannot copy products.
COCNLUSION
From the above report, it has been summarised that innovation is regarded as significant
aspects for developing and success of enterprise at marketplace. Through performing innovation
at existing products or launching new products, company have to maximise profitability and
productivity of business. For providing shape to innovation idea, the respective organisation can
use innovation funnel. Here, business case is beneficial for providing information to company for
new innovation. The various tools that are used by national authorities for protecting their work
with help of copyrights, patent and so on.