Innovation and Commercialisation Report: Essence Drinks Business Plan

This report delves into the concepts of innovation and commercialisation, using Essence Drinks as a case study. It defines innovation, compares it to invention, and explores how organizational elements like vision, leadership, culture, and teamwork shape innovation and commercialisation. The report analyzes the 4Ps of innovation, the innovation funnel, and frugal innovation, providing examples of their application. It also examines the importance of the commercial funnel, the application of New Product Development (NPD), and the creation of an innovation business case, including funding access. Finally, it evaluates tools for developing, retaining, and protecting knowledge and intellectual property, offering a comprehensive overview of innovation management within the context of Essence Drinks and its potential for business growth and market competitiveness.

Innovation
and
Commercialisation

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Define innovation and determine its importance in organizational context through a
comparison with invention.....................................................................................................1
P2. Explain how organizational vision, leadership, culture and teamwork can shape
innovation and commercialisation..........................................................................................3
TASK 2............................................................................................................................................4
P3. 4Ps of innovation and explain the use of innovation funnel to examine and shape
innovative ideas......................................................................................................................4
P4. Developments in frugal innovation and provide example of its usage in an organizational
context....................................................................................................................................6
TASK 3............................................................................................................................................7
P5. Importance of commercial funnel and application of New Product Development (NDP)
processing for commercialisation of innovations...................................................................7
P6. Build an Innovation Business Case for an organization, along with ways to access funding
................................................................................................................................................8
TASK 4............................................................................................................................................9
P7. Evaluation of different tools that organizations can use to develop, retain and protect
knowledge and intellectual property......................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
.......................................................................................................................................................13

INTRODUCTION
Innovation refers to unique ideas or thoughts which are implemented through number of
activities. It create an entirely new product made with advanced technology. On the other hand,
commercialisation can be defined as the process launching new products or services in the
market. It involves manufacturing, supply and distribution, marketing, sales etc (Bernstein,
2015). These are major functions which are done to gain a high market share for making the
product successful. The organizations chosen for this assignment is Essence Drinks which has its
headquarters at United Kingdom. Further, it covers meaning of innovation along with its
importance by comparing it with invention and contribution of organizational vision, leadership,
culture and teamwork in innovation and commercialisation. Furthermore, 4Ps of innovation and
its use in context of innovation ideas have been explained and importance of commercial funnel
and application of NPD. Along with this, evaluation of different tools that can be developed,
retained and protect IPR.
TASK 1
P1. Define innovation and determine its importance in organizational context through a
comparison with invention
Innovation can be explained as transforming or application of an idea to create
something valuable and new which will fulfil customers' expectations. According to Peter
Drucker, “innovation: a creation (a new device or process) resulting from study and
experimentation; the creation of something in the mind; the act of starting something for the first
time; introducing something new.” Importance of innovation in an enterprise are is as follows:
 Growth and profit: Innovation involves adding new features and ideas which makes a
product completely new. A business entity suffering from loss from a long time can turn
its situation and make profit. Also, new products can be launched in new market in order
to expand it for the growth. Innovation makes it possible to give higher returns to
investors which attract them to make more investment which is utilised in producing new
products and related activities. Also, it offers high profit margins which can satisfy
customers' demands and expectations (Carayannis, Cherepovitsyn and Ilinova, 2016).
 Competitive advantage: Companies have become globalised under which many new
entrants have access to market which creates huge competition. It is ever increasing and
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innovation plays a great role in making a product successful. The unique concept of an
item encourage people to buy such products. Further, skilled and talented prospective
employees also gets attracted to work in the company which add to the existing
competitiveness and help it in gaining more competitive advantages. This increase high
efficiency in operations. This helps in beating competition and become a leader whose
products are worthy for customers.
Invention is the process through which an idea is converted into a new physical form. It
may include business models, product designs etc. Furthermore, the concept or idea must be
workable which satisfy specific need of customers (Chun, D. and et. al., 2015). Only those
inventions lead to innovations which have nominal cost involved. A comparison between
invention and innovation has been described below:
Basis Invention Innovation
Meaning It can be defined as unique method or
composition which is divided into
processes for developing a product by
using new innovation.
It is the development or production of
a new or existing product through
significant contribution.
Nature It is restored in its original form which
is transformed by following number of
activities. It may take number of
months to complete.
It is a revolution in existing product
which is altered by implementing
ideas that has been ascertained. It is
usually completed within a short span
of time as the product is already there
only improvisation has to be done.
Activities Research and Development
department of an organization is
responsible with finding inventions
that can be add. This could be
expensive because of a new concept
has to be created which may involve
various types of research or surveys.
Innovation is attributed to all units or
departments as it is collaborated
efforts of all segments. When all areas
put their efforts together, the the cost
gets divided which is quite beneficial
and there is not much burden of
funds.
Involve It takes into account a single product More than one product can be
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or service which is modified with
inventions. Since, only one product is
there, chances of failure is high.
involved for making transformation.
Even if one product fails to meet
organizational targets, other products
can which will make profits. Thus,
low risks.
Essence Drinks can have innovation in its existing lassi with introducing a new idea such
as lassi in the form of ice cream having or changing current packaging with advanced so as to
keep it chilled for a long time etc. (Datta, Mukherjee and Jessup, 2015). There could be number
of other innovations which can be implemented to take out the company out of loss so as to make
-profits.
P2. Explain how organizational vision, leadership, culture and teamwork can shape innovation
and commercialisation
Vision: A vision is a statement that contains declaration of a company to achieve its
goals in the future. It communicates the targets that an organization wish to focus on. Essence
Drinks was successful when it launched mango flavoured lassi however, soon started to face
decrease in sales. In such a case, it can have creative and alluring visions statements signifying
its goals to become successful in this segment. This should be presented in such a way to
increase its brand image and attract more customers. Vision helps provides a plan or road map by
relying on which manpower can provide innovative ideas in order to become more competitive.
The mid and long term goals are explained which can be kept in mind while formulating
innovation that will increase perceived value of customers (Dutta and Folta, 2016).
Leadership: It is an ability or skill of a person which is applied to influence individual or
groups working in an organization. It is useful for changing beliefs, attitudes, behaviours etc. of
workforce. There are different styles viz. Participative, democratic,, autocratic, situational etc.
These are adopted according to the demand of situation. Essence Drink can opt for participative
style which provides a certain level of freedom to team members to present their ideas and
opinions in discussion and decision making. This gives a sense of belongingness which
motivates them to work hard and accomplish goals within time frame. Furthermore, effective
guidance can be provided to employees for developing innovative ideas. Further, it will make
workforce capable to have unique ideas that will help in retaining the market position.
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Culture: An organization comprise assumptions, values, norms or behaviour of
employees working in an entity. The environment exists in the company influence the way a
personnel respond or interact with others. There may be presence of different opinions which
may create difference that may have positive or negative influence. Essence Drinks should keep
the morale of employees high by rewarding them with monetary benefits. Further, it should work
on reducing the level of grapevine exist in the organization (Henttonen and Lehtimäki, 2017).
Enough growth opportunities should be provided to each employee without any discrimination.
This will earn it the title of ethical company which will help it in commercialisation of its
innovative newly launched products.
Teamwork: It is a collaborated efforts of individual working towards common goal an
organization. Every team member is assigned tasks or job to perform for the purpose which has
been defined clearly to everyone working in the entity. In this, a personnel gets opportunity to
make use of available resources in an effective and efficient manner. Essence Drinks make have
team leaders who will provide direction and guide them in becoming future leaders. Further,
right training must be provided to all people working so as to have innovation and use them in
creating a product that will increase its sales.
TASK 2
P3. 4Ps of innovation and explain the use of innovation funnel to examine and shape innovative
ideas
4Ps of innovation is mix of four different elements and is called innovation mix. It is also
called 4space innovation model built by John Bessant and Joe Tidd. The aim of developing is to
help with research the areas in an organization (Hossain and Kauranen, 2016). These can be
applied anywhere. These have been explored hereunder:
Paradigm: This point a company becomes concerned about the perception of customers
about the business conducted by an entity. When a new product is launched with innovation, it
is likely that there will be difficulties which are unavoidable. Thus, Essence Drinks must make
changes in their lassi which will be accepted and liked by wider public. Also, innovation bring
more customers which increases sales and market share resulting in easy and long term survival
among its rivals. By experimenting with new flavours, changing packaging etc. will be
considered as shifting the existing paradigm.
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Product: Every organization should conduct detail research and evaluation about the
market before taking an innovation out in the market. Customers feel happy about being engaged
in the activities of a company. Essence Drinks is planning to launch new innovative products in
the market to give tough competition to its rivals. Further, it is focusing on creating more
perceived value which can fulfil customers' expectations and outperform in the market. Also, it
can improve the quality of existing mango lassi to retain old customers while attracting
prospective buyers.
Process: It is about production unit and distribution channels through which products are
dispatched and delivered to end consumers (Hossain, 2015). Time hold a key value in business
and timely delivery of products impact the sales. Essence Drinks may opt for new distribution
channels such online orders. This will help it track real time information about choices through
cloud software and produce new products accordingly.
Position: It is about market standing in a particular industry. A high position can be
attained by understanding the market demands. Essence Drinks must focus on building healthy
relations with its customers also, make analysis about age group interested in its products.
Further, it can have sugar-free lassi for diabetics and health conscious.
Innovation funnel is used to define the steps or activities that occur in producing a
product. It involves various steps which are divided into three key stages which are as follows:
 Wide Mouth funnel: This is the initial stage in which ideas in huge number are gathered.
It is assumed that, a company will have high chances of producing more products with
huge number of ideas (Kolychev and Prokhorov, 2015). Essence Drinks can extract
information from its rivals, or by conducting research or from any other sources. This
stage helps in having clear objectives.
 Narrowing segment funnel: This is the second stage in which ideas gathered or
developed in the first stage is evaluated in order to find differences with standard and to
find whether they can be related to the ultimate goal or not. Essence Drinks may assess
potential returns and risks regarding new innovation.
 Narrow segment funnel: This is the final stage in which steps are taken by the company
to ensure that selected ideas fulfil company's objectives as they were planned. Essence
Drinks should focus on meeting its fixed its customer's demands and accomplish its
objectives.
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P4. Developments in frugal innovation and provide example of its usage in an organizational
context
Frugal innovation refers to new business models, manage value chains and redesigns
products or services as per the specific needs and requirements of customers by focusing on
reducing the unnecessary costs. It is also called “reverse innovation” or “inclusive innovation”. It
focuses on developing products at economical prices in huge volume by considering market
trends (Miller and French, 2016). It is helpful in curbing useless or extra costs and utilise them in
making goods which will help in gaining high profits by improving the position. In this, the
available resources are used in an optimal way which will give maximum satisfaction to
consumers there often comes situations when an organization face difficulties in creating a
balance between scare resources and keeping low cost. In large entities, it is conducted by
Research & Development Department on continuous basis for producing an innovative product
which will beat other goods in the same industry. Essence Drinks must give good amount of time
to analyse the requirements consumer regarding the product, quality and price they are
expecting. For instance, Essence Drinks is planing to launch innovative lassis in UK which is
going to cost a hefty sum. In order to reduce the cost, it can switch to solar system in
manufacturing units. This will create a major difference between in the investment and
unnecessary cost will be utilised in producing more number of goods. Further, Essence Drinks
can change opt for kullhad as a glass which can be recycled completely, resulting in saving in
costs. Further, the making charges is also not too much and can save huge amount of
unnecessary costs (Paradkar, Knight and Hansen, 2015).
Another example of frugal innovation is from Unilever, where the R&D department of
company analysed the need to improve quality which will be affordable by all categories of
households. Also, in order to be sustainable, it has started to produce and sell small detergent
packages which is sufficient to be used for five washes and is sold in Spain. The innovation was
that, it kills bacteria even with lesser amount of detergent.
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TASK 3
P5. Importance of commercial funnel and application of New Product Development (NDP)
processing for commercialisation of innovations
Commercial funnel refers to capacity of a business organization to operate in a way
which is acceptable by customers by fulfilling their expectations. It involves data presentation in
which sales is assumed on the basis of innovation. It has four parts which are as follows:
Attract: In this step, Essence Drinks can invest in making good quality lassis that will be
liked by large number of consumers.
Convey: Essence Drinks can involve various types of promotional and advertising tools
to convey their vision along with details about their products to encourage people to buy them
(Rasmussen and Eliason, 2017).
Close: In this step, Essence Drinks must make efforts to build close relationship with its
customers. Also, it can ask for their feedback about the which will make them feel even more
closer.
Motive: This is the last step in which Essence Drinks should focus on improving the
quality of products and prevent any delay in delivery. This will help in sustaining long term
position among its rivals.
Commercial funnel may have different benefits such as creating a positive brand image in
the minds of people so that they feel attracted to buy more products. Essence Drinks can avail
these advantages by giving discounts to customers in order to influence other to visit and buy
lassis. Also, it can provide different drinks divided into the categories of with sugar and sugar-
free. This will help it making customers who are health conscious and want a substitute from
other lassis available in the market.
New Product Development (NDP) is a plan which is made to introduce unique products
in the competitive market (Schmitz, A. and et. al., 2017). The aim is to gain competitive
advantage and become successful. Essence Drinks is planning to introduce lassi which will be
half liquid and half frozen in the form of ice cream. Also, sugar-free lassi with different fruit
pieces. It has eight different stages which should be considered while developing NDP, which
are as follows:
 Idea generation: This involves development of different ideas which can be of any form
and from number of sources. Essence Drinks can conduct market research.
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 Idea screening: There could be numerous ideas which should be undergone screening to
have feasible ideas. Essence Drinks can use this to know company's strength, weakness,
needs of customer etc.
 Concept development and testing: Concept refers to blueprint of the idea so developed.
Idea that have passed screening step are transformed into concept. Essence Drinks can
involve few customers for testing the sample and give reviews.
 Business strategy analysis & development: This step is about deciding marketing
strategies, branding and other aspects which will increase profit. Essence Drinks may
include this to know about cost involved.
 Product development: After finalising the strategies the idea or concept in changed into
a physical product. Essence Drinks can have limited edition lassis.
 Test marketing: Essence Drinks can take feedbacks from customers about the the
product so launched and changes are done according to suggestions (Song, Z. and et.al.,
2016).
 Commercialisation: Essence Drinks can have target market fixed in which marketing
mix will be implemented for selling the products in the market.
 Introducing: This is the last step, in which Essence Drinks will launch its newly
established innovative products.
P6. Build an Innovation Business Case for an organization, along with ways to access funding
Innovation Business Case means all the documentation done which have been captured
in written form. The importance of it to create innovation plan by following which the product
will be produced (Vishnevskiy, Karasev and Meissner, 2015). Further, it helps in ascertaining
amount of funds required, potential risks, technologies requirement, etc. An innovative business
plan for Essence Drink has been provided as under:
Executive Summary Essence drinks is a small scale company engaged in selling lassis in UK.
It was established by Akshay Kumar two years ago. The company, soon
failed to predict the fluctuations in trade cycle and competition level
which caused decrease in sales. Now, the company is planning to
introduce half frozen and half liquid lassi and sugar-free lassi with fruits
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pieces to survive in cut throat competition.
Need It need innovation to attract customers by providing good quality drinks
which will provide high satisfaction. New launched Lassi will be
successful due to its taste and uniqueness.
Solution There was huge demand for fruit flavour lassi which has been fulfilled
by Essence Drinks. It will provide high perceived value to end
consumers.
Consumer Analysis The customers were happy and satisfied with frozen lassi, however,
sugar-free lassi is yet to capture huge market share and also given their
suggestions to make it better.
Creation and
Improvement
Essence Drinks has successfully captured the knowledge about
customers' expectations. Further, it has analysed that healthy lassi
without sugar will be a good choice to have large share market.
Acquisition of funds It is a company which has many options to raise funds. It can gather
capital by taking loans from banks or financial institutions. Along with
this, retained earnings can also be used (Walsh, J. P. and et. al., 2016).
Benefits availed Essence Drinks have successfully created a taste that is unbeatable
which itself is huge benefit. The uniqueness attracts new customers and
they remain loyal.
TASK 4
P7. Evaluation of different tools that organizations can use to develop, retain and protect
knowledge and intellectual property
Intellectual Property is the collection of different intangible creations of human intelligence. It is
the most important element in any business organisation which will help them while setting
organisation apart from its rival companies (Wang, C. and et. al., 2017). Intellectual Property is
divided into two main parts which is industrial property rights and copyright. There are various
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techniques which has to be considered by the owner of an organisation. Some of the important
techniques are as follows:
Copyright: It is a legal right which is mainly given to the individual, company or to a
business entity, if they innovate any original work. Copyright acts as a protection tool which is
given by the UK government, in order to protect individuals rights. Copyright provides freedom
to the innovator to decide what next would happen with its product. Main aim behind
formulating copyright law, is the creativity of person, time and effort should remain safe. It is
being evaluated that in reference to Essence drink, company innovate new product, which is
mango lassi in order to fulfil customers requirement. If company apply the copyright law, they
have full control towards the product as well as prevent it by existing competitors.
Trade Marks: It is a word, sign, logo or symbol which is majorly used by various
companies in order to differentiate similar type of products at the competitive marketplace. Trade
mark is a logo or brand used by companies in their name with the intention to distinguish its
products and services differ from similar products. It is essential for a company or organisation
to adopt trade mark registration, as a result valuable asset of company can not be promoted by
any other person to gain any kind of monetary profit. Company gain protection against any
unauthorised use of products and services offered by them. Trademark can be given to any
individual, company or any legal entity (Yu, Y. and et. al., 2016). It is being evaluated that, if top
management of the Essence Drink adopt trademark right, they can have their very own brand or
logo which will aid them while distinguish their products from other companies present at the
marketplace.
Patent: It act as a legal protection guide given by the government of that state for any
invention. It is grant to its owner by excluding everyone from the right to use, sell or
manufacture the particular product for a limited time period. Patent refers to the rights given to
the inventor of a particular creator, as a result person can make money and gain profit. It is being
evaluated that managers of Essence Drinks start adopting patent property, no one can
manufacture similar products, as a result company can gain competitive advantage.
As per the above points it has been analysed that an organisation can protect their
products and services by adopting some legal rights. In the present context company is adopting
Patent intellectual property to secure their products from rival companies. As a result company
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