Innovation and Commercialisation Report: Essence Drink Business Case

This report analyzes innovation and commercialization strategies, focusing on the Essence Drink company's introduction of a healthy mango lassi. It defines innovation, differentiating it from invention, and emphasizes its importance to organizations, including revenue generation, customer satisfaction, and competitive advantage. The report explores the roles of vision, leadership, culture, and teamwork in shaping innovation and commercialization. It explains the 4Ps of innovation (product, position, process, paradigm) and the use of the innovation funnel to shape innovative ideas, detailing stages like identifying opportunities, insight-based ideas, evaluation, and launch. Furthermore, the report examines frugal innovation, discussing its principles and application, and highlights the significance of new product development and the commercial funnel. Finally, it presents a business case for the Essence Drink product, covering tools for knowledge retention and protection.

Innovation and
Commercialisation

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1: Define innovation and its importance to organisation in comparison to invention..............3
P2: Vision, leadership, culture and teamwork of organisation that helps to shape innovation
and commercialisation................................................................................................................4
TASK 3............................................................................................................................................6
P3: Explain 4Ps of innovation and use of the innovation funnel to shape innovative idea........6
P4: Frugal innovation developments and their application in the organisational context..........7
TASK 3............................................................................................................................................8
P5 Importance of the commercial funnel and the application of new product development......8
P6: Innovation business case for Essence drink........................................................................10
TASK 4..........................................................................................................................................11
P7: Tools used by organisations to retain as well as protect knowledge..................................11
CONCLUSION..............................................................................................................................12
REFRENCES.................................................................................................................................13

INTRODUCTION
Innovation refer to transforming idea into reality by providing value to the customer and
satisfying their requirements (Aghion, Van Reenen and Zingales, 2013). It basically refer to
improving and bringing modification by adding unique attribute in existing ones. For better
understanding discussion is made on Essence drink company of UK whose founder is Akshay
Kumar. This company was launched two year back and has recently come up with innovative
product that is healthy mango lassi. The purpose of report is to cover following topics such as
explanation on innovation and its importance to organisation by comparing it with invention.
Along with that emphasis is made on vision, leadership, culture as well as teamwork that helps to
shape innovation and commercialisation. Moreover, explanation on 4P's of innovating and use of
innovation funnel to shape innovative ideas. Development in frugal innovation and importance
of new product development. Further, build business case for an organisation.
TASK 1
P1: Define innovation and its importance to organisation in comparison to invention
Innovation: It simply refer to adding value in the existing product of company based on
the changing needs or requirement of customer. This further provide solution to company by
redesigning or modifying the existing product of company. In context to Essence drink has
experienced high sales in initial year but unfortunately due to decline in sales other than regular
drink company has also served flavoured mango lassi drink. The purpose of company was to
serve more healthier beverage to their prospectus by achieving the success for company. Hence,
there are various advantage associated with innovation that are defined below (Berry and Berry,
2018):
Innovation assist company to generate additional revenue by adding up valuable attribute
or flavours in product. It enhances the satisfaction of consumer by maximising the loyal for
consumer. In related to Essence Drink has identified the taste and requirement of market and
added valuable flavour such as healthy mango lassi drink. This helps to increase the sales by
increasing revenue for company.
Initiative of launching new innovative product creates goodwill for company by
maintaining long term relationship between company and customer (Wolin, 2016). Herein, the

objective of Essence Drink is to further increase the sales due to which it is making effort to
promote the product.
Innovation helps to minimise the impact of competition by giving short term competitive
advantage to the company. Thus, company must utilise it in their favour by expanding there
customer base and keeps on upgrading rather quality of product based on the taste and preference
of product.
Thus, it is significant process that helps to grab customer's attention which finally helps
to increase the customer base for company. Therefore, respected company analysed the increase
awareness of customer towards organic product due to which they have launched healthy drink
that is mango lassi.
Distinguish between Innovation and Invention
Basis of
difference
Innovation Invention
Define It refer to application of idea for current
product of the company. Here, execution
of idea may takes place for first time.
It involve occurrence or creation of
idea for goods and services that has
not presented before.
Activities Its activities are spreads into whole firm. Its activities are bounded up to
research and development section.
Role As the product is fresh in market due to
which the activity to perform the task are
spread across organisation. For this
company require set of various skills
such as strategic and technical skill.
It include the role of research and
development department to apply
their scientific skills in favour of
company.
Emphasis Here that means within innovative
product concentration is made on whole
business process as well as various
product
Within invention organisational
emphasise on single idea or product.

P2: Vision, leadership, culture and teamwork of organisation that helps to shape innovation and
commercialisation
Effective output can only be achieved if an organisation has clear vision due to which
every successful organisation set vision, culture, mission, leadership style and so on in advance.
This helps to maintain the transparency between employer and employee that further helps to
flourish the business by achieving shared objective. In context to Essence drink has drawn up
significant strategy, vision and mission for its innovative product that helps to guide the
organisation in right direction to achieve better result. This helps to build reputation of company
by increasing the chances of growth and development. Therefore, adoption of adequate
leadership style, efficient team work and culture, vision as well as mission of company helps to
share the innovation and commercialisation process (Boudreau and Lakhani, 2013).
Vision: Vision refer to the predetermined objective of an organisation which needs to be
achieved in long term. Herein, Essence Drink company has a sound vision to offer healthy
mango lassi to the local resident of UK. They added up mango flavour after identifying the taste
of existing customer. Moreover, as most of the people are becoming health freak due to which
they are opting for healthier options which is being provided by selected company. Such vision
will help in satisfying the customer by flourishing the business.
Leadership: Organisation must adopt effective leadership style to bind the people and
decrease the turnover rate for company. A successful leader is one who replaces the competition
with cooperation within the group by engaging the effort of their member in order to achieve
organisation objective (West and Bogers, 2014). Herein, respective company can adopt
democratic leadership style. Such style will help to shape innovation and commercialisation as it
consider the opinion of team member include brainstorming technique as well that helps the
personnel to come up with unique ideas.
Culture: Culture of one organisation can differ from other culture as it include belief,
norm, values and regulation. The internal culture of Essence drink should be easy to adopt for
employees because then only they will feel comfortable in sharing their opinion. Along with that
In order to bring innovation and commercialisation within organisation the manager must
maintain relationship culture as it will held to bind good relation among the personnel. This will
further lead to bringing innovative idea through brainstorming method that will finally help to

attain the predetermined target of organisation. Further, it will retain the employee for longer
duration.
Team Work: Effective teamwork doubles the chances of long term success by
maintaining the synergy within the organisation. Essence drink can shape the innovation as well
as commercialisation by binding up the team based on same skill set and knowledge. The manger
of company respective company welcome the suggestion of their employees due to which bthey
feel valuable part of organisation.
TASK 3
P3: Explain 4Ps of innovation and use of the innovation funnel to shape innovative idea
Innovation mix refers to the creative solution provided to enhance existing product. It act
as a value addition desired by customer to increase the conversion for company (Chesbrough and
Bogers, 2014). This also helps to differentiate the product from all its substitutes by
overpowering the competitor. Herein, Essence drink the four type of P's innovation are
elaborated below:
Product: Product refer to items sold by company. Thus, it can be either new invention or
innovation in existing product. In relation to Essence drinks that has introduced new healthy
mango lassi to offer new flavour to audience in order to enhance market share of company.
Position: The position of company depends upon the customer perception towards the
product of company (Weisburd, and Braga, 2019). Due to which it is essential for company to
position its product in such a manner it gains the attention of customer. Thus, company should
establish its position by differentiating the product which helps to decrease the competition rate
and build reputed image in society.
Process: Process refer to the function that helps in conducting business activity in more
efficient and effective manner. In context to Essence drinks company's process should be quick
so that customer don't have to wait to get their drinks. This delight the mood of customer and
increase the profitability of business.
Paradigm: Paradigm means looking the same thing or business by different perspective.
Innovation can only be achieve if people keeps different viewpoint while visualising things. For
instance, lassi which is a unique product for the resident of UK but still it gained huge sales for

company. This was the reason behind innovation of mango lassi to provide healthy drink to
local resident.
Innovation Funnel:
Innovation funnel is basically used to evaluate an innovative ideas that boost up
organisation performance. It is a framework that helps to identify the insights by constituting the
role of customer as well as competitor in order to set benchmark. In context to Essence drink
based on their experiences launched flavoured drink after passing through various stages and
finalise it by testing it significantly.
The main advantage associated with innovation funnel is that it helps to generation of
various ideas which are further converted into reality gain long competitive advantage over
competitors. Additionally, it is significant tool that assist the business to prioritise their idea for
the advancement of business. Moreover, it is an ongoing process where both employee as well
as management take effort to generate new process for the favour of organisation. Therefore,
innovation funnel also makes the optimum utilisation of resources to cope up with the scarcity.
Thus, the type of innovation funnel are stated below:
Identifying Opportunity: In order to identify the opportunity the past data of customer
is collected. Based on the data future expectation as well as requirement of customer are
identified to exploit it significantly.
Insight based Idea: Essence drink company uses several technique such as extensive
research or group discussion to get the real insight regarding innovative idea.
Evaluation and Benchmarking: At this stage stimulated market is created where
samples of innovation that mean mango lassi is offered to customer. Thus, based on feedback of
customer standards are set by organisation.
Go/No Go: The feedback of customer helps the company to take wise decision regarding
innovative product should be further offered in market place or not (Drucker, 2014). Though
this is time taking process to take final decision but it saves the future cost of company.
Launch: After passing through various stages Essence drink finally introduced its
healthy mango lassi within UK market.
P4: Frugal innovation developments and their application in the organisational context
The concept of frugal innovation urges company to turn the constraint that arise from
scarcity of resources such as financial resources into an innovative idea. Thus, it includes the use

of available resources in order to develop innovative product. Further, it refer to the modification
done in existing ones by adopting better technology. Therefore, various principle of frugal
innovation are defined below (Edquist, 2013):
Exploit opportunities: Within this principle of frugal innovation Essence drink scan
internal as well as external environment in order to identify best suited opportunity. Therefore,
identification of potential opportunity helps the company to gain competitive advantage over
their competitors.
Why frugal innovation developed
The CEO of Renault - Nissan Alliance in 2006 bough up the term frugal innovation as the
CEO. This term was coined because the CEO like the efficiently of Indian engineer who believe
in quick innovation which is cost effective dues to constraint in resources. Thus, product which
are result of frugal innovation are sold at a very low price in comparisons to other products.
Therefore, there are various other companies like Nano cars of Tata who have adopted the frugal
innovation before launching their product as it provide various advantage that are defined below:
 Leverage advance and competitive technology in order to offer low cost solution.
 It offer new ways of designing as well as developing product (Frugal innovation for
sustainable growth and development, 2018).
 Produces design as well as system thinking at macro level.
Do more with less: Innovation must be designed in such a manner it depends upon the
available resources of organisation. As resources are limited due to which Essence drink must
find new method to make optimum utilisation of resources.
Think and act flexibly: As organisation operates in dynamic environment due to which
even they needs to be flexible otherwise their may pertain risk of loosing customers. Moreover, it
is essential for company to accept as well as adopt changes by providing training to their
customer.
Keep it simple: In order to minimise the chances of confusion and chaos innovation must
be kept simple. In context to Essence drink has bought up one one flavour that is mango due to
which its process becomes easier. Moreover, it eliminated the chances of complexity due to
which employee remain motivated to adopt innovation.
Follow your heart: The organisation should passionately follow their objectives and face
failures fearlessly as bringing change requires ability to overcome tough situations.

Include profit margin: Essence drink must have adequate information about customer
so that they can tap the untapped need of customer. This will further help company to remain
committed with customers.
Uses of innovation funnel to context to organisation:
Though Essence drink has introduced innovative product (mango lassi) but for this they
have utilised most of their existing resources which are used to prepare lassi. This gives the
company advantage as they do not have to seek for various other resources. Moreover, selected
company's good supplier supply relationship can help the company to reduce the delay or
unavailability of quality material (Etzkowitz and Zhou, 2017).
TASK 3
P5 Importance of the commercial funnel and the application of new product development
Commercial funnel is the way of which is divided into three phases to utilise for
reforming present goods by implement various beneficial strategies as well as policies. Hence
this funnel is much more important regarding to success of essence drink. There are provided
detailed information below (Gawer and Cusumano, 2014):
Pricing Policy – Essence drink can provide their drinks at lower price which can afford
by every type of customers. With the help of commercial funnel the company has been set
effective pricing strategy after the analysis of perception of different customers.
It helps in improving the way of growing business – Through commercial funnel
analysing of customer level and try to understand their needs and wants. It is a good way to get
growth in business after that increasing sales level to generate profit of an organisation.
Emergence of advanced technology – With the help of commercial funnel, essence
drink can apply this for launching their new innovation in the particular market. For example –
powder lassi can be used any where as per requirement.
Implement investigation programmes – Before launching any product into market
there is need to investigate market for particular product (Freeman, 2013). It is important for
essence drink and collect information regarding to customer needs and wants. During the process
of commercial funnel can help to launch new product in the market and help to get success.
Therefore, commercial fund offer various advantage to the company like it helps in the
advancement of technology as well as detail investigation helps in strengthen the innovation

process. Along with that significant process can help Essence Drink to expand their business
effectively.
Apart from as per the discussion, new product development is longer process and there is
proper step in it. Explanation of these areas as follows -
Idea generation: It is a first step to carry out new innovation regarding to lassi and it will
apply after all analysis and proper research. Therefore, it is important to conduct research in
market regarding to their product because it will help to know perception of different types of
customer as well as collect data information.
Idea evaluation: In the second step idea generated after the junior innovation consultant
after that analysis all planning and reduce those ideas which can not help to gain profit.
Concept definition: The third step taken as to carry out mango lassi will be finalised.
Strategic analysis: To launch new product in market so for this need to prepare effective
strategy that can help to analysis cost, demand and profit of an organisation.
Product development and testing: Before the launch product essence drink has been
testing their product regarding to customer perspective.
Market testing: It is required to market testing will be conducted in effective manner
because of lassi will take place on the basis of manufacturers, customers and feedbacks. There is
examine that which is right time to launch their product in market in suitable timing.
Commercialisation: In the marketing plan defines every step so there is need to set
pricing of lassi as per requirement.
Product launch: In the last step, after all investigation and examine product each level
product has been launched in market with new innovation (Goldberg, 2013) .
Hence, new product development plays an essential role to launch new as well as
innovation product in the market by analysing each external factor clearly. Moreover, evaluation
of each step of new product development helps in transforming the new idea into concept
effectively.
P6: Innovation business case for Essence drink
Business case includes systematic planning as well as assembly of all necessity idea
which are required while initiating the product life cycle (Govindarajan and Euchner, 2012). This
helps in carrying out all business process effectively as well as efficiently.

Executive Summary: As Essence drink company is launching healthy mango lassi due
to which it include the method of both internal (SWOT) as well as external analysis (Porters five
factor model or PESTLE analysis) to identify the real status based on which successful strategies
can be set out by organisation.
Mission statement: The mission of Essence Drink is to cover huge population of UK by
offering them mango lassi. Thus, company has given priority to the healthy needs of an
individual and accordingly they have launched innovative product. Hence, company provide
high quality product to maintain the loyalty of customer.
Resources: Organisation makes the efficient use of available resources so that they do
not face scarce of resources in future (Patti, Yanes and Siuzdak, 2012). Thus, respective
company utilised resources in such a manner they cover the demand of each and every individual
successfully.
Market analysis: Company generate identify the move of their rivalries this helps them
to act promptly. Herein, Essence Drink significantly identify the expectation, requirement and
perception customer. Along with that company keep eye on competitors strategy in order to
significantly launch their product.
Cost and benefit analysis: Before launching innovative product company draw up
expected profit they can generated by incurring expected expenditure. Like, the cost of mango
lassi must be based on the preference of customer so that they find worth paying for it.
Estimated total expenditure of Essence drink
Type of expenses Cost
Operation expenses £550
Marketing expenses £200
Raw material expenses £400
Sales and distribution expenses £350
Labour expenses £250
Total £1750
Estimated Total Revenue generated by Essence drink
Product name Product price Product quantity Revenue generated from product

Mango Lassi £ 3.00 150 £450
Strawberry Lassi £ 2.50 300 £750
Litchi Lassi £ 1.50 100 £150
Orange Lassi £2.00 150 £350
Plain Lassi £ 2.00 250 £500
Total revenue £2200
Therefore, Estimated total profit = Total revenue – Total expenditure
= £2200 - £1750
= £ 450
Sources of fund: Fund helps the business to conduct day to day activities of business.
There are two sources of fund that is internal and external source and both are defined below:
Internal Source: These sources of fund are generated within the business through
engaging in business activity. Thus, it includes collection of debt, retained earning sales of stock
and fixed asset.
Depend on love ones: Company can also take the loan from their love ones such as
family or friends. Here, company are not supposed to pay any interest on principle amount.
Retained Earning: After making all the expenditure on product and giving remuneration
or dividend to shareholder comp[any keep some of their profit which can be come into use
during contingency.
External source: Within this source business looks from the outside sources to generate
fund in order to run business activity effectively. It include sources such as debenture, financial
institution and so on.
Crowdsourcing: is an efficient way to raise the fund from the large number of external
people with the help of online platform. It is basically a cost effective method use to sort out big
issues efficiently.
Financial institution: Financial institution such as banks have facility to provide credit to
company. This helps to fulfil the financial requirement of business in order to attain long term
objective (Owen, Bessant and Heintz, 2013). Whereas, company has to keep some thing as

mortgagee to avail the facility of extended credit. In context to Essence drink takes the support of
bank to launch their innovative drink.
TASK 4
P7: Tools used by organisations to retain as well as protect knowledge
Innovation refer to modification in design, image, symbol and so on due to which it is
significant to protect the right of company through intellectual property rights. In relation to
Essence Drink has introduced new innovation in term of flavour that is mango lassi. The
purposed of innovation was to get back sales of company to the initial level by enhancing the
base of customer. Thus, there are several types of right which are stated under:
Copy right: Copy right is a valuable part of intellectual property right which gives relief
to the owner of work that their work can not be imitated by others. Such right is applied for
movie, website, painting, song, chart, literature work as well as for photograph. It basically gives
the privilege to the company that their rivalries can not duplicate their work. Moreover, it helps
to reduce the chances of any damages and tackle the civil remedies effectively. Therefore,
company can take its advWhy frugal innovation developedantage by registered their actual or
original invention as well as innovation (Patti, Yanes and Siuzdak, 2012).
Merit
 Right to authorise and broadcast work
 Prevent work from getting copies
Demerit
 It does not permit other to use as well as distribute the work
Patent: Patent is one of the intellectual property rights that gives the advantage to the
owner of invention that their work can not be replicated, sold as well as important by any other
organisation. Through it is for fixed duration but during that time it safeguard the interest of
actual owner. As the offering of Essence drink are unique and different from other beverages
served in UK due to which they can register the procedure for preparation. Perhaps it help
company to enjoy their advantage.
Merit
 It allow to protect the work from the competitor
 Give licence to sell as well as use others work which give profitability to company

Demerit
 Time consuming as well as lengthy processing
Trade mark: Trade mark are specially use to secure the symbol, design or logo of
company. This helps to customer to recognise the brand as other company can not use same logo
for their product as well. Thus, it secure the rights of owner to bring innovation.
Merit
 If the other owner uses the trademark then that company can impose legal actions against
it.
Demerit
 The main disadvantage is that the owner has to give the fees to get the trademark renewed
Therefore, these are an effective tool that help the organisation to gain competitive
advantage over other as it safeguard the interest to innovator as well as owner by seeking
monopoly right over the product.
CONCLUSION
From the above report it has been determined that innovation is an essential part of
organisation as it enhances the sales of company. With the passage of time the needs of
customers also starts changing so adoption of innovation satisfying the existing need of
customer by maximising profit for company. Moreover, innovation funnel helps the company to
make optimum utilisation of existing resources so that they do not face any scarcity in near
future. Furthermore, innovation can be protected through intellectual property rights such as
patent or trade mark to gain competitive advantage over competitors.

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Online source
Frugal innovation for sustainable growth and development. 2018. [Online]. Available
through:<https://open-ecosystem.org/articles/frugal-innovation-sustainable-growth-and-
development>