Business Development Project: Innovation at Toyota Company

This project provides a detailed analysis of Toyota's innovation strategies, exploring the differences between innovation and invention, and their importance to businesses. It examines the 4Ps of innovation, different sources of innovation (including incremental and disruptive), and the application of frugal innovation. The report also delves into Toyota's new product development processes, including the innovation funnel, and concludes by summarizing the key findings and implications for Toyota's business development. The project highlights how Toyota can overcome issues by adopting frugal innovation, focusing on the 4Ps of innovation, and enhancing management abilities for innovation and increased sales.

PROJECT

Table of Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
Explantation of innovation and how it is different from invention.............................................3
Importance and value of innovation to companies and CEO turn company into innovative firm
......................................................................................................................................................3
Different sources of innovation and discussion of incremental and disruptive innovations.......4
4Ps of innovation supports management and abilities of innovation..........................................6
New product development processes and innovation funnel.......................................................6
Frugal innovation used by company............................................................................................8
CONCLUSION ...............................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
The current report is based on Toyota company, operating their business all around the
world. This study explains the differences between innovation and invention, its value and
importance for companies. Furthermore, this report clarified 4Ps of innovation that supports
management and capabilities of innovation. Different source of innovation and pros & cons of
disruptive as well as incremental innovation. This study clarify benefits gain by company
through frugal innovation and drive new innovation by using NPD and innovation funnel.
PART A
Explantation of innovation and how it is different from invention
Innovation means turning a new idea into solution that adds value from consumers
perspectives. In modern term, it is a new imaginations and creative thoughts in form of method
or device. Innovation considered as the utilization of better solutions that meet unarticulated
need, new requirements and existing market needs effectively (Sembada, 2018). It includes
deliberate app of data, initiative in deriving different or greater values from resources and
includes all procedures by which new ideas are developed and converted into useful and cost
effective products. In simple terms innovation is something real and much better than other
things as consequence, new that break into society or market. Innovation is quite different from
invention, it is the procedure of development, creation and implementation of process, services
or products, with goal of gaining competitive advantages, increasing effectiveness and improving
efficiency.
Invention defined as creation of products and services or introduction of procedures for
the first time. On the other hand, innovation defined as improvement on existing goods or
process to make it much better than before (Goel and Göktepe-Hultén, 2019). Invention creates
something new in current marketplace while innovation creates something that sells. Invention
means, that something has never been made or produced before. It is creation of new process or
things, invention is the practical outcome or manifestation of ideation. Meanwhile, to innovate
means to use a new method or new idea, it is all about to introduce something new to market and
turn them into goods that is of use in actual world.
Importance and value of innovation to companies and CEO turn company into innovative firm
Innovation is valuable method for organizations, it is considered as process in which a
firm introduces new upgrades and technologies that are specially designed to achieved low costs

and products differentiation. It does not essential to create completely new service or goods,
innovation will make improvement on existing products, lower costs of service for consumers
and company (Meliciani and Tchorek, 2017). Innovation is important in context of business as it
creates new methods and ideas, it caters endless stream of value to firms, in fact innovation is the
most essential elements of successful organization. Firms who proactively consider and act upon
chances for change through this components in highly volatile business environment will survive
for longer and also successfully flourish in toughest of business world conditions.
CEO of company effectively turn its business into innovative organization by taking the
right decision and supporting team with the best leadership style in context of introducing new
product within existing market place. They can do whatever they want, when decision they
decided to make are perceived by board members and workers as not in the best interest of
business. Chief executive officer is the highest ranking executive in firm, whose accountabilities
include managing overall operations as well as resource of company, making major corporate
decisions and acting as main point of communication between corporate operations and board of
directors. In short, CEO will turn business into innovate company as they will help
transformation succeed, by communicating their importance, considering desired changes,
getting personally included and building strong top team.
Different sources of innovation and discussion of incremental and disruptive innovations
Innovation is far heavy procedure than simply the change and improvement, it brings is
also far long-lasting (Pedersen, Gwozdz and Hvass, 2018). There are several sources of
innovation-
Unexpected-
Innovation will take place unexpectedly, it happens by chance. There is a long list of
unexpected innovation in history. Many times scientists are looking for something new or
different they stumble upon something else, that is innovation.
Incongruities-
When need is in congruent with delivery, innovation will born, in attempt to solve
existing incongruities individual might innovate. For instance, as number of cars grew there was
a shortage of parking area, in attempt to solve this incongruity between parking shortage and
area, smart car was born. Smart car is smaller than the other car for example Nano, that can fit in
small spaces.

Market structure-
The current market structure also give rise to chances for innovation, Google shaped
search engine market, before this search engines were not as good and Google brought all of it in
order.
Descriptive innovation-
This refers to the technology whose app significantly affect way a industry or market
function (Bock and Sweley, 2018). It is an innovation that develop value network and new
market as well as eventually disrupts an current market, displacing established market leading
companies and alliances.
Pros-
Descriptive innovation helps companies in market expansion through new innovations, it
supports in developing a culture that in turn firm culture into community that grasp modifications
rather than ignoring them.
Cons-
Disadvantages arise from descriptive innovation is that financial costs of business to
create and produce new products for new innovations. In making goods, of course not the least
cost that will be issues by company. Staring from market search until production required a
relatively large cost.
Incremental innovation-
It is a series of small upgrades or improvements made to an organization existing
services, products, methods and processes (Pucihar and et.al., 2018). Changes implemented
through this innovation are usually focused on improving an existing productivity, products
development efficiency and competitive differentiation.
Pros-
Experienced and knowledge from incremental innovation provides basis for future
development and growth of relatively business innovation.
Cons-
Incremental innovation do not support with innovation and new thinking in same way as
other innovation does.

4Ps of innovation supports management and abilities of innovation
Toyota company sales decline in last few years because of consumer security issues in
their products, that is Toyota Etios Cross.
Paradigm-
This is most important factor of innovation, it helps to manufacture new products within
company, this is suitable and effective planned process by which production management think
for making chances in their existing goods.
Product-
Product innovation is the first think that comes into mind when talking about innovation
and makes changes in existing things which company offers. It supports management by starting
to expand their range of goods to include security methods where they will prevent consumers
from accidents.
Process-
Toyota's production management will focus on their production system, they consider the
issues and work to solve it as soon as possible, it enhances their abilities of innovation which is
quite beneficial for business growth.
Position-
Position innovation in context of Toyota deal with promotional activities, that business
performed to develop their position in competitive market. It supports management and
capability of innovation by generating awareness through marketing plan that gain attention of
new consumers.
Form of innovation in which Toyota should engage in-
Toyota company must engage in descriptive form of innovation, as it helps firm discovers
their recent and future opportunities in market or while operating business at global level.
New product development processes and innovation funnel
Idea generation-
Before making changes and innovate something new, Toyota and management of
innovation think about what they need to be done in regard to security issues or innovative
concept.
Screening-

Management and CEO view feasibility of innovative thought, make discussion and then
chose the best one from list of varied.
Concept development-
CEO and production department, take idea into action, they implement new idea and
formulate final budgetary.
Market strategy development-
After passing above stages, now it's time to create the best marketing strategy, in which
firm marketing department conduct research to identify the review of consumers about their
products that them to develop attractive advertisement. Toyota will plan for strategy
development that support to turn innovative idea into final action (Sihvonen and Pajunen, 2019).
Product development-
In this phase, company make changes in Toyota Etios Cross, that gain attention of its
consumers.
Test marketing-
Manufacturing department test product in market, they take review of people about it by
launching.
Introducing-
Finally, Toyota company effectively launch their product in market in front of people
with their attractive features.
Innovation funnel-

Illustration 1: Innovation funnel
(Source: Stages of innovation funnel, 2019)
Innovation funnel is mechanism that allow constant stream of ideas that will be screened
for viability.
Toyota can used innovation funnel to drive their innovative idea or goods to market, by
implementing and considering their stages while producing goods.
Step-1
By collecting many ideas in context of innovation and choosing the best one company
will use innovation funnel that help to drive product to market.
Step-2
Firm will screening their new idea or goods and then start the process which turn it into
final product.
Step-3
At last, company take use of innovation funnel by selecting the best method to deliver
goods in market.
Frugal innovation used by company
Frugal innovation is procedure of reducing complexity and difficulty of goods and their
manufacturing system (Khan, 2016). Toyota can use this concept by removing non-essential
features in their existing products, they get benefits from frugal innovation as it associated with
emerging market situation where purchasing power is low.

Toyota suggested adopting innovation funnel as it is beneficial for its business growth in
market plan. Firm must implement this concept in their current structure, which is beneficial for
them. They can get benefits from innovation funnel by focusing on their production procedures
and removing unessential things into it.
CONCLUSION
From above analysis, it has been summarized that Toyota company overcome issues by
adopting frugal innovation that help to add value for target market. Furthermore, organization
follow the 4ps of innovation that enhance abilities of management for making innovation and
increase sales better than before.

REFERENCES
Book and Journals
Bock, J.E. and Sweley, J., 2018. Incremental Innovation in the Milling Industry: A Panel
Discussion. CEREAL FOODS WORLD. 63(6). pp.254-256.
Goel, R.K. and Göktepe-Hultén, D., 2019. Risk attitudes, patenting and invention disclosures by
academic researchers. The Journal of Technology Transfer. 44(1). pp.155-166.
Khan, R., 2016. How frugal innovation promotes social sustainability. Sustainability. 8(10).
p.1034.
Meliciani, V. and Tchorek, G., 2017. Global value chains, innovation and firms' performance
during the crisis. Economic Institute.
Pedersen, E.R.G., Gwozdz, W. and Hvass, K.K., 2018. Exploring the relationship between
business model innovation, corporate sustainability, and organisational values within
the fashion industry. Journal of Business Ethics. 149(2). pp.267-284.
Pucihar, A and et.al., 2018. Business Model Innovation in European SMEs-Descriptive analysis
of quantitative survey and case survey data.
Sembada, A., 2018. The two sides of empowering consumers to co-design innovations. Journal
of Services Marketing.
Sihvonen, A. and Pajunen, K., 2019. Causal complexity of new product development processes:
a mechanism-based approach. Innovation. 21(2). pp.253-273.