Innovation and Commercialization Strategies for Cadbury: A Report

This report delves into the innovation and commercialization strategies employed by Cadbury, a leading confectionery company. It begins by differentiating between innovation and invention, highlighting their significance in maintaining a competitive edge and expanding market share. The report then examines how organizational vision, leadership, culture, and teamwork contribute to fostering innovation within Cadbury. It further explores the 4Ps of innovation—Paradigm, Product, Process, and Position—and their application within the company. The innovation funnel is also discussed as a tool for developing successful products. The report also addresses frugal innovation as a cost-effective approach. Finally, the report touches on the methods used to protect knowledge and intellectual property, providing a comprehensive overview of Cadbury's innovation journey and its strategic approach to commercialization.

INNOVATION AND
COMMERCIALISATION
1

Table of Contents
INTRODUCTION................................................................................................................................................... 3
TASK 1................................................................................................................................................................ 3
P1............................................................................................................................................................................ 3
P2............................................................................................................................................................................ 6
TASK 2................................................................................................................................................................ 7
P3............................................................................................................................................................................ 7
P4............................................................................................................................................................................ 8
TASK 3................................................................................................................................................................ 9
P5............................................................................................................................................................................ 9
P6.......................................................................................................................................................................... 11
TASK 4............................................................................................................................................................... 12
P7.......................................................................................................................................................................... 12
CONCLUSION .................................................................................................................................................... 13
REFERENCES...................................................................................................................................................... 14
2

INTRODUCTION
Innovation refers to any fresh concept that adds value to an organization’s existing
products and services. It is quite essential for organizations which aim to stand out of the crowd
and expand its market share (West and Bogers, 2014). However, implementing new and creative
ideas in a business is quite complex. A detailed analysis of the market, preferences of the
customers and their expectations from the firm must be taken into account. Innovation of the
company must answer the immediate needs of the customer. It might be regarding increase speed
of delivery or modifying technology, innovation of a company must aim at addressing these
customer wants. This report is based on Cadbury, one of the finest confectionery companies of
the world. The report aims at explanation of innovation and its importance in comparison to
invention. It also includes how organizational vision, leadership, culture and teamwork could
shape innovation and commercialization. A detailed analysis of 4Ps of innovation is briefly
mentioned in the report. The project also focuses on processes required to commercialize
innovation and evaluation of methods used for protecting knowledge and intellectual property.
TASK 1
P1
Innovation: It is a process used by companies to add creative elements to the services
and products of the company which makes them competent to sustain tough competition.
Basically, it is the procedure of modifying existing goods and services by introducing some
change in the process of its production. It could be its size or in design. The aim is to provide an
extra benefit to the customers and satisfy their needs. It makes a firm competent, expand its
customer base and enhance its profitability. Innovation would definitely help Cadbury to
maximize its Return on Investment (ROI). There were many innovations that are associated with
3

Cadbury. Some of the prominent examples would be Cadbury Shots, Cadbury Crunch and many
other innovations which gave customers value added services to the customers.
Invention: This refers to creation of a whole new method, concept, service or product for
the first time (Manso, 2011). For an organization like Cadbury, invention too is a beneficial
factor of driving the firm towards achieving more success in the market. Cadbury has been very
consistent in inventing various products. These invented products have been widely accepted
throughout the country. Some of the prominent example of invention in cadbury are the Cadbury
chocolate bars that have been created to enhance the customer experience of having chocolates.
The difference between Innovation and Invention is explained below:
BASIS INNOVATION INVENTION
CONCEPT
Innovation is a process of
development and
implementation of creative
ideas to add value to firm’s
existing services and products.
It improves the competitive
image of the firm in the
market.
Invention refers to the
procedure undertaken to
create a whole new product or
service to serve the needs of
the customers. By creation of
new products and services
that have never been created
before, it sets a whole new
market for the firm.
SCOPE
This process has a wider scope
as it undertakes all the services
and products of an
organization into
consideration (Gawer, 2011).
This procedure has a narrow
scope as it undertakes just a
single product or service into
consideration
OCCURRENCE Innovation is needed by an
organization whenever any
improvement is required in the
Invention is the result of
unique ideas developed by
scientists working in the
4

company’s existing goods and
services.
organization.
SKILLS REQUIRED
To bring innovation in the
firm’s offerings, technical,
strategic and marketing skills
are required by firm’s
employees.
The employees of an
organization must possess
scientific skills to invent a
new offering for the company
(Cross, 2011).
Importance of Innovation in Cadbury
Any organization, in order to attain a strong competitive position in the market and attract
more customers, routes towards innovation. Innovation helps the firm sustaining the complex
and dynamic business environment where needs of people change so drastically with time
(Anderson, Potočnik and Zhou, 2014). In Cadbury, innovation could play a prominent role in
maximizing its ROI and profit margin. Importance of innovation in a firm like Cadbury is
mentioned below:
 Enhances Creativity Of Employees: Effective innovation practices in the firm helps to
enhance creativity of employees. Cadbury is one of the most popular companies in the
world. Innovation could ensure enhanced creativity and increased efficiency in
employees as they would implement innovative strategies to produce the products for the
firm. Moreover, innovation in the firm would enhance employee engagement and
commitment towards the firm which is crucial for a competent firm like Cadbury.
 Reduces Cost: Innovation in production helps firms to reduce its cost by equipping the
company with innovative methods and techniques. Innovation can help Cadbury
implement new and cost-effective methods to produce their offerings for the market. It
would help the firm get rid of resources that unnecessary add to the cost of the firm.
5

 Increases Profit: Most importantly, innovation helps the companies in earning more
profit. This is because having an innovative feature in products attracts potential
customers that enable the firm to expand its target market (Dincer, 2017). Cadbury could
use innovation to attract customers efficiently and maximize its return on investment
easily.
P2
For any organization to implement innovation in its production and organizational
system, it is essential for the employers as well as the employees to understand the basic concept
of the term. Innovation in an organization cannot be successfully implemented until the
organization’s vision, leadership, culture and teamwork support this change. There must be
modifications in these systems in Cadbury in order to successfully establish innovative practices
in the company. The contribution of Cadbury’s vision, leadership, culture and teamwork in
innovation is mentioned below:
 Vision and Innovation: An organization’s vision paves a path for innovative practices in
the company. It is fairly impossible for implementation of innovation in firms where the
vision does not support this practice (Greenaway and Rudd, 2014). The vision statement
of Cadbury says, “Working together to create brands people love”. To achieve this vision,
the firm requires modifications in their products as well as its production process. These
practices would help the company effectively develop brands that will be widely accepted
as well as cherished in market.
 Leadership and Innovation: For implementing change in the organization, leaders need
to step in and guide the employees in using innovation the effective way. Success of
innovation in a firm depends upon the effective leadership skills of its leaders. In order to
bring innovation and enhance the company’s products and performance, leaders of
Cadbury must ensure that the employees are properly trained and guided in appropriate
ways so that they don’t resist the change and be even more effective.
 Culture and Innovation: Culture refers to the values and beliefs adopted by individuals
and groups. Culture in organizations plays a crucial role in establishing innovation. If
innovations and modifications are socially accepted and supported by the norms of the
6

company, it would be a contributing factor for Cadbury in successfully modifying the
organizational practices.
 Teamwork and Innovation: Employees and managers at Cadbury could really work
towards bring innovation in the firm like a team. Innovation would help the company
sustain in toughest of times and would even help to eradicate competition (Hang Do and
et. al., 2014). Teamwork in Cadbury will be beneficial to bring innovation and enhance
the productivity of the firm and will contribute towards raising its profitability.
TASK 2
P3
A firm, in order to gain strategic advantage in the market could use innovation as an
effective technique. John Bessant and Joe Tidd created the innovation mix or the 4Ps model of
innovation. The reason for development of this model was to help the firm improvise their
services, products and processes. It is most effective in planning stage and helps a firm to drive
itself towards improvement. The 4Ps of innovation are mentioned below:
 Paradigm Innovation: This stage refers to the overall paradigms of Cadbury. Ir refers to
the overall paradigm shift in the technology. These changes are important for an
organization. However, sometimes these changes could be radical. Cadbury must ensure
that these changes are employed in a way that it be favorable for the firm. (Hemphill,
2014).
 Product Innovation: This is the most basic innovation introduced in companies. This
step undertakes the need to make changes in the products and services offered by the
company. Cadbury, through this step could determine the ways in which it could improve
its chocolates. Moreover, it would enable the firm to optimally utilize all the resources
available with the company.
 Process Innovation: This process undertakes the changes in the process adopted by the
firm to make its products available to the customers. This step contributes towards
enhancing the process of the firm and building a strong image in front of the customers as
well as the competitors. Managers at Cadbury must consider all the processes of the
7

company including the production of its chocolates, training to the staff, its distribution
process and so forth.
 Position Innovation: This is concerned with the perception of the organization within the
company as well as outside it. This might refer to the salaries Cadbury provides to its
employees or the services it gives to its customers. Through Position Innovation, Cadbury
must aim at developing a positive perception within the customers of the company. This
would help them in long term sustainability as well as growth in future.
Use of Innovation Funnel
Innovation funnel is an effective measure undertaken by companies during development
of an innovative product or service. The agenda of using this tool is to develop products and
services that are in demand and preferred by the customers. Cadbury must consider its three steps
to effectively produce and distribute chocolate products to its customers. The first step considers
making the information base stronger. In this step the firm gathers knowledge of the market and
current trends preferred by the customers, competitors, even general public could be used by the
firm to gather information through surveys or questionnaires. Market evaluation could also be
used by the firm for this purpose.
The next step undertakes effective screening of firm’s ideas. The firm must have effective
ideas in order to develop more products in the market. After screening, the idea which could
generate maximum ROI is chosen.
Finally, the best idea which effectively serves the overall objectives of the firm is chosen
through critical evaluation. The product is then offered to the customers. Cadbury must
implement strategies which are in accordance with the expectations of the customers and flexible
in case it needs modifications in future. Innovation funnel would thus help Cadbury generate
maximum ROI.
P4
Frugal innovation refers to the measure undertaken by firms through which they provide
their services and products at low prices with more emphasis over technology. Frugal innovation
is influenced by the political, social and environmental pointers of a country (Sengoku, 2015).
8

They act as a driving force for this phenomenon. Aim behind implementing frugal innovation is
to reduce the cost of the products in order to make the product available even in lower markets.
This method makes the products simpler and cheaper which in turn enhances its importance in
the market.
Frugal innovation can be a very useful method for Cadbury in its quest to maximize its
ROI. In case of scarcity in resources, the firm can adopt this method. This method would be
useful to cut down its production cost. The most appropriate example of frugal innovation in case
of Cadbury is that it could develop and distribute sugar-free chocolates. This would increase its
customer base in the market as even those customers would want to associate itself with the firm
who are health conscious.
Frugal innovation must be adopted as a regular practice at Cadbury as it would help the
company enhance its profitability and maximize its ROI. Sugar-free chocolates would enable
even diabetic as well as old age customers to eat chocolate who do not prefer sugar in their food
items. Hence, it would really provide a strong customer base to the company as well as would
help in enhancing the effectiveness of the firm. In addition to this, such concern for its customers
would help the company in establishing better customer relationships.
TASK 3
P5
Commercial funnel is also known as sales or revenue funnel which is stated as buying
process that organizations leads their targeted customers through when purchasing products. In
general, it is used to move business of a corporation from domestic to international market. In
context with Cadbury, in order to gain opportunities from marketplace for increasing sales
performance, it is going to launch a new product (Mazzarol and et. al., 2014). The reason behind
this is health consciousness, Due to obesity and diabetic issues, people avoid to eat chocolates
and other confectionery commodities. For this process, its managers have given a proposal to
employers to make sugar free confectioneries. This would help in improving and increasing high
sales performance through which high competitive advantage can be gained. By moving business
on global level, it helps Cadbury in attracting more customers who often quite conscious for their
health, attract towards new products. Furthermore, by globalizing business, aids this company to
9

expand its operations in more countries. In order to grab high attention of targeted audience and
launch new product successfully, managers of Cadbury are required to prepare proper budget
plan. Moreover, by providing proper guidelines and directions to team members, managers can
gain support of them in making project plan more effectively. For this process, they are required
to focus more on each phase of commercialization to increase sales performance. Certain phases
of commercial funnel for product development are:-
 Idea Generation: It is considered as initial stage of product development under which
managers of Cadbury are required to generate some effective ideas for improving sales
performance. Sugar-free chocolates could really help the firm in achieving its corporate
objectives, which is expanding its customer base and maximizing the ROI.
 Idea Screening: This stage of commercial funnel assists Cadbury to measure feasibility
of each idea for product development so that best idea can be implemented. Sugar-free
chocolates in this stage will be tested on the basis of feasibility and profitability.
 Testing Concept: Under this section, managers are needed to identify preference and
demands of targeted audience for particular product. It will help in judging whether
chosen idea proves effective or not. Cadbury would gather such information from the
customers through questionnaires and online interactions to determine their expectations
from the firm.
 Analyze needs of Product development: It is second last step where managers of
Cadbury require to access the success of product plan. This would help in generating
specific strategies for execution of certain project at marketplace successfully. This stage
is very important for Sugar-free chocolates as effective strategies are necessary for
successful launching of the product.
 Commercialization: Under this final phase, Cadbury can finally launch its new products
at marketplace for increasing sales performance and gaining high profitability for
business growth and success. Sugar-free chocolates would finally launch in the market in
10

this stage and the firm would adopt the most appropriate marketing and commercial
strategies to make it a success.
P6
Innovation helps the firms to satisfy the customer demands effectively by enhancing their
efficiency which in turn, results in higher rate of investment. In addition to this, it also helps the
firm sustain heavy competition in the market for a very long time. Innovation can be used by
Cadbury to reinstate itself as a market leader in milk and chocolate products. It would help the
firm to enhance its reputation in the market as well as customers would prefer the firm more than
its competitors. The Innovation Business Case of Cadbury is discussed below:
STEPS DESCRIPTION
SUMMARY
Cadbury is one of the biggest confectionery firms in the world which
aims at providing best milk and chocolate products to its customers.
OBJECTIVES
The objective of the company is to maximize its Rate Of Investment
(ROI) through implementing innovation in its products and services.
SOLUTION
To effectively achieve the vision as well as set objectives, the firm is
planning to introduce Sugar-free Chocolates to its customers in the
UK as well as the world.
INNOVATION IN
PRODUCTS
The product would be innovative as it would be the first time
Cadbury would indulge in production of sugar-free products for its
customers. To achieve this purpose, Cadbury is using ServoGel
depositing process that was previously used to make gum sweets.
This technology would help them to generate sugar-free yet sweet
chocolates for customers (Confectioners demand new technology for
healthy foods, 2018). In addition to this, with ongoing health
concerns around the world, it would change the basic perception of
sugar content being present in chocolate products. Moreover it
would contribute in reducing obesity level in UK which is around
11

27% (UK is most obese country in western Europe, OECD finds,
2018).
RESEARCH
Cadbury is focusing on analyzing the market and impact of its
products on customers through online surveys and questionnaires.
The product introduced is completely preferred by the customers of
UK as in accordance with the market needs.
FUNDING
To convert this concept into an actual offering, Cadbury is planning
to acquire the funds from bank loans, investors, stakeholders and
financial institutions. Through various sources, the firm is planning
to invest £80,000 to produce, market and distribute Sugar-free
Chocolates.
BENEFITS
From this innovation, Cadbury aims at enhancing its customer base
which would help the company in increasing its Rate of Investment.
Moreover, through this move, company plans to gain a competitive
edge in the UK market as well as improve its innovative position in
the world.
As per the above scenario, Cadbury would invest £80,000 in the production as well as
distribution of Sugar-free Chocolates. It involves all the aspects for successful marketing like
promotion, advertisements, distribution etc. However, to determined the profitability of the this
innovation, the firm would undertake calculation of Return on Investment (ROI). This is a tool
which is used for performance measurement to effectively evaluate investment's efficiency in
case of Sugar-free Chocolates.. It would aid Cadbury in measuring the return acquired on the
investment made for its innovation.
RETURN ON IVESTMENT Calculation:
Calculation of ROI in order to evaluate success of Sugar-free Chocolates is very crucial
for Cadbury. The company has invested a £80,000 and the net profit of the organization after its
sales would approx. be £12,000 as per the predictions made by the company's financial
department and market forecasts. The calculation of ROI is discussed as under:
12