Innovation and Commercialisation Report: Business Development Module

This report examines the concepts of innovation and commercialisation, emphasizing their importance for organizations. It uses Unilever as a case study, analyzing its product innovation strategies, including the development of a blueberry and pomegranate yogurt. The report explores the role of organizational vision, leadership, culture, and teamwork in shaping innovation and commercialisation. It delves into the 4Ps of innovation (Paradigm, Product, Position, Process) and the application of the innovation funnel. Furthermore, it discusses frugal innovation and its applications within an organizational context. The report highlights the significance of these elements for business development and success, providing a comprehensive overview of the topic.

INNOVATION
AND
COMMERCIALISATION

Table of Contents

INTRODUCTION
Innovation and commercialisation are both are both crucial for the introduction of product in
the market. Process of innovation is linear, i.e. research to development of product in the market.
Innovation is the improvement and changing in the existing product through creative ideas and
thinking ability Commercialisation is the process introducing new product into the market. To
achieve the commercial success, it involves production, distribution, marketing, sales, customer
support etc.
The organization which recently innovated a new product to the market is Unilever,
which is a British-Dutch transnational consumer goods company, founded in 1929 and owns
over 400 brands. In food industry, they found the idea of making new yogurt with the
combination of blueberry and pomegranate was innovated by the organization and with the help
of different models like commercial funnel and strategies. This report has highlighted the
necessity and significance of innovation, to shape the innovation and commercialization
organization highlighted the skills of leadership such as vision, teamwork, culture and uses
models like innovation funnel and New Development Process (NPD) for the commercialization
of product.
TASK 1
P1 Explain innovation and determine its importance to organisations in comparison with
invention.
The creative process of working and thinking or implementing suitable ideas to this
process known as innovation. The changing and improvement in any product. It helps the
organization and can help the business remain in changing markets and can be applied for
product renewal. Innovation attracts consumers because they added something new in their
existing product whereas in case of invention the whole new product is introduced in the market
or creation of product for the first time which hesitates consumers to try it for first time, therefore
less number of consumers are attracted towards the product (Chun, Chung and Bang, 2015).
There are generally three types of innovation called product, process and business model
innovation. Innovation in an product allows company to grow with other competitors in the
market. It allows the business to update the product and make changes in the taste of product and
preference customers satisfaction and increase in its profit. The organization name called
Unilever has generated an idea of making Blueberry Pomegranate Yogurt, in starting they used
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to sell basic flavours of yogurt like mango, grapes etc. After researching on they made a unique
combination which made the product more innovation, the combination was blueberry and
pomegranate which is very good for health. As blueberry is good for heart health and also helps
in reduction of cholesterol in the blood and decrease the risk of heart disease and pomegranate
helps to reduce blood pressure. This combination made the product more innovative and fulfil
the demands and needs of consumers.
Importance of innovation to organization in comparison with invention: The lifeblood
of food industry depends on innovation and essential for survival and profitability. As the
consumers demand and expectations are increasing day by day. Therefore, organization should
have clear understanding of the consumers and market place to make business sustainable. The
strategic requirement and effective innovative management within the organization is necessary.
Significant difference to a food industry is made by innovation. Change in the product makes the
organization grow with the market and this change leads to fulfil the continuous needs of
consumers. Economic growth is also increases by generating of new ideas and innovation. Most
food businesses fail because they don't think about change and innovation in a product. Whereas
generation of idea, product and process which is new and unique to the market is known as
invention and scientific skills are mandatory whereas innovation requires a broad combination of
promoting, practical and deliberate skills. The main objective of invention is focused only on
particular product whereas innovation focuses on the mix of diverse product and the system like
Unilever did with the idea of blueberry and pomegranate in yogurt. While invention is carried by
a particular organization i.e. scientists of organization whereas idea of innovation is distributed
over all organization. Generation of ideas which are unique and first studied theoretically and
then executed practically is defined as invention whereas innovation is all about the experimental
execution of an idea. It can be said that innovation is different from invention as they both have
diverse abstraction. As both the enterprise require large amount of money in the operation. In
invention, process moved out only when it is workable but in case of innovation the process is
not workable even then it can be implemented in the organization.
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P2 Explain how organisational vision, leadership, culture and teamwork can shape innovation
and commercialisation.
The qualities of leader's like vision, teamwork plays an decisive role in enhancing the
organizational creativity. The CEO of Unilever, Alan Jope is a British businessman and joined
Unilever in 1985 as a graduate market trainee has a clear vision of the goals, mission, and values
for a organization to be successful. With the help of this qualities, organization lead to
innovation and commercialization. Clear vision helps to separate the useful from the unnecessary
things (Polzin, von Flotow and Klerkx, 2016). Training people to be more creative, helping them
to develop their skills towards skills and confidence in creative thinking, a leader can provide to
their employees while working on real challenges and opportunities, so that the organization can
have the benefits of new ideas. A leader must be good in searching the right employees which
are good in technical skills and have adaptability to work in diverse conditions. Leader's
responsibility is to make the comfortable atmosphere where the employees are free to brainstorm
with the managers. For example, an employee working on food industry i.e. Unilever lead to
other ideas and now teams are more unified and have begun to bounce ideas off each other. They
are less isolated and work together to bring innovative ideas to the company, giving us an edge
over other companies with more toxic work environments. Teamwork breeds innovation which
if integrated well into the strategic efforts of companies can lead to the commercializing of a
great product. A good leadership skills of manager will help the organization in building the
relationship within the staff and helps in motivating team work towards their vision more
efficiently and beneficially. Leader's vision is consistent with organization's vision and its
qualities helps the organization's innovative ability.
Organizational culture: Unilever has an team of qualified leaders and managers who follows
their values and ethics to emphasize the importance of employees. To determine the necessary
output they work together to measure the best outcome they can generate with cooperating with
their employees. For becoming the innovation beneficial diversity can be essential to bring the
people of diverse framework and generating the wide range of ideas. However, diversity should
be in the way that they can share their viewpoints without any hesitation and with open minded.
To put ideas into product and services, requirement of essential team will be crucial. On the
other, to make it effective and sustainable, an adapted structure is very essential. With the help of
positive atmosphere in the organization culture helps team to focus that results in selling, making
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profits, and helps in organization's success. Organizational culture can effectively promote or
inhibit cooperation. Employees behaviour towards the organization will also shape a particular
culture within the organization. Organisation culture must follow control system. If the system
put reliability over oddity, then the purpose of innovation will fail in execution. If culture values
blame over accountability, then there will be trouble in commercialisation. Culture of innovation
is an essential part of any core business. For example, Unilever has the best organizational vision
as it thinks about the future growth by updating their existing products. Leadership skills are also
good as it encourages their employees to create new ideas into the organization. Employees
behaviour maintains the organizational culture very well.
TASK 2
P3 Explain the 4Ps of innovation and explain the use of the innovation funnel to examine and
shape innovative ideas.
Innovation in food industry is very necessary as sometimes existing product makes the
monotonous taste among the consumer, 4Ps of innovation tools helps in to formulate the
innovative process that can improve the existing product and bring it into the business.
This 4Ps gives the direction that in which product the innovation is required and supports the
idea in generation proceeds and how it can be implied.
4Ps are Paradigm, product, position, process.
Paradigm
This tool of innovation improves the ways of doing business and helps in to the
innovation of product, but the innovation does not prove to be a positive all times at the same
time this change become the radical and that can leverage the profit double. It includes the
changes in the business model. Unilever has used this tool to change the existing product and
comes with new innovative ideas. Like for example they have generated the idea of bring
blueberry and pomegranate flavoured yogurt.
Product
In this the company will ask to their team that how they can improve the product and
service and how they can make it more appealing in the market with the existing product. From
the suggestion they will make the product better and it was known as incremental changes.
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Unilever has used this theory for the innovation of existing product by taking the opinion from
the team members and used their ideas for the innovation, that makes the radical change and
come up with the product called “Blueberry pomegranate yogurt”.
Process
It includes the preparation process of the product. It includes all the steps for the
preparation of product like supplying of material, techniques, hiring people etc. Unilever has also
gone from this
process to make product and can increase the profit. Unilever has also take care about the latest
trends to carry out the process.
Position
It is the area works on changing the context in which the product is framed, Unilever has
taken all the points in consideration that how they can communicate to the world about their
innovation of product and make the image better.
Use of the innovation funnel to examine and shape innovative ideas.
An innovation funnel helps in describing the steps that takes place at the time in the
development of process of the product The purpose of the innovation is to create the product
which meet the needs of market in manufacturing or in economic forms. The innovation funnel is
process that enables a bunch of ideas that can be screened for viability (Maritz and Donovan,
2015). This approach is used by many companies to create an innovation and their plan for to
generate the ideas of innovation. The idea of innovation includes the budget, staffing resources
and the ability of organisation to absorb the new product ideas.
Go with the flow
Unilever has taken the several steps to enable the process. Innovations flows from the
employment of idea, generating process and incentives. The company has taken the ideas from
each employees within an organisation by don't discriminating their capacity allows the
employee to bring the ideas to the table. The management of Unilever knows it very well that the
smallest ideas can have the greatest impact.
Weighing up
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This approach ensures that the ideas are to be executed on timely basis so they can
introduce the product on time. The best way to do is assign the responsibility to managers of all
the department or executives and do the division of work.
P4 Explain developments in frugal innovation and provide examples of how it is used in an
organisational context.
Frugal innovation is a process that makes the works simplified and smooth, it discovers
the new business models, techniques and re design the products, frugal innovation provides the
functional solutions from few resources and makes the process simplified and gives the end
result. Many times the companies are resource constraint in this frugal innovation is relevant.
Frugal Innovation is the process which minimises the complexity and reduce the cost of goods
and its production.
Technology
Unilever has make the process simplified by using the techniques which make the
product in a smoother way as well as it will be the cost effective so the company can earn more
revenue and profit.
Set audacious objective
An organisation must grabs the attention of both within the organisation as well as
outside. Unilever has the best example of sustainable living plan. It aims to reinvent the entire
range and process on sustainable lines (Schot and Steinmueller, 2016). It doubles the sales and
half the environmental footprints by 2020. In the innovation of blueberry pomegranate yogurt,
they have find frugal solution to deliver the product in market by the use of few resources.
Focus on customer needs
Addressing the real needs of the customer is the foundation of frugal innovation.
Sometimes customer don't know what they want and they will get the innovative product, that
might become invaluable. For the innovation of blueberry pomegranate yogurt, the Unilever
spent thousands of hours to make it successful and workout for the customer need.
Make the most of you already have
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For an existing organisation like Unilever have observe and experienced that to make the
innovative product can only dream of. But the existing human resources have all the power to
restructure the board members for to innovate the products by the intervals. The development in
frugal innovation has supported company in smooth functioning. It has reduced the complexity
in producing the blueberry and pomegranate yogurt.
Team up with innovative partners
To reinventing the organisation product through the frugal innovation can not be going to
happened overnight. By doing the joint collaboration or partnership enables it to do and can
identify the product and the need of doing the innovation.
TASK 3
P5 Explain the importance of the commercial funnel and the application of new product
development(NPD) processing for commercialisation of innovation.
Importance of commercial funnel in marketing must not be underestimated. The
investigations collected must be more so that the output results will be more accurate after the
development of product. By providing less investigations will give less sales. To encourage large
number of leads there are varieties of prospects through a range of activities such as email
marketing, social media and events. There are different types of stages that comes in funnel such
as market research, idea generation, conceptual and technological development and
commercialization. The innovation funnel actually has two distinct sides. By mastering the top
side of tunnel will allows for the potential for better ideas and concepts to move through the
complete funnel (Azarmi, 2016). The top side of funnel is stated as capture which includes
strategic perspective and intent, perceptions, the connecting points that come from the deeper
insights, critical sources of perceptions, ideas that will require to check the quality. The second
phase which is the mid part of funnel is connect which defines matching goals, knowledge and
capabilities and includes open/closed refining stages. The last phase of tunnel is convert which
determine the gaps and risks by accessing the potential value to the organization to turn its full
resources on and take the idea to commercialisation funnel, by addressing the gaps, the risks, the
impact becomes the beginning of refining of business case. And this phase also helps in
transforming possibilities into opportunities. Therefore, Unilever uses this funnel model to
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launch their new product after complete research of market. Earlier, people used to gather ideas
through brainstorming sessions but innovation tunnel can produce a better resounding results.
New Product Development (NPD): It is the path which leads to production of right product and
introducing the right or genuine product to the market. The product process through a different
types of stages such as:
 Idea Generation: It includes the various number of ideas coming from everywhere, in
Unilever the staff is creative and have ability to think so it gives large pool of ideas. It is
collected from various sources such as internal sources, SWOT analysis, market research,
customers, competition. Therefore, Unilever came up the innovation of yogurt with the
combination of blueberry and pomegranate.
 Idea screening: It collects the number of brainstormed ideas. The factors are company's
strength, company's weakness, customer's needs etc. By brain storming, Unilever has
come-up with the innovative idea of blueberry and pomegranate yogurt.
 Concept Development and testing: It includes structure of an idea into detailed concept.
After brain-storming company has developed the detailed concept of how to produce the
blueberry and pomegranate yogurt.
 Business strategy analysis and development: Understand the costs and profits of the new
product like blueberry pomegranate yogurt innovated by Unilever and determine whether
it meet the organization objectives.
 Product development: The development of product goes under process by making the
prototype. In this company will analyse the market needs for the new flavour blueberry
and pomegranate yogurt.
 Test marketing: Marketing mix is used to test the product, collecting the feedback of
customers and making changes. In this company will test market for the blueberry and
pomegranate yogurt.
 Commercialization: Final briefing and strategy formulation is done and launching the
blueberry and pomegranate yogurt the public officially with the help of marketing mix.
P6 Build an innovation business case for an organisation, including ways to access funding
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Unilever has used the different tools and techniques so they can build an innovation
business and be an uphill climb. As Unilever has the best team, best technology, and the best
ideas they possess. Some of the few innovation business case are:
Executive Summary: Organisation like Unilever will always have to innovative as it
manufactures many products and they should have the innovation by the time, and this makes
them to push the idea further it might have blind spots. open innovation changes by inviting new
and fresh approaches towards the existing ones. (Schot and Steinmueller, 2016) .
Situation analysis- Company will analyse their Strength and weaknesses to launch the new
innovative blueberry pomegranate yogurt.
Strength
Strong brands
Broad product mix
Economies of scale
Strong global market presence
Weakness
Imitable products
Limited business diversification
Dependence on retailers
Opportunities
Business diversification
Product innovation for health
Threats
Tough competitive rivalry
Product imitation
Increasing popularity of retailers’ house brands
STP
Segmentation: Company will segment the market on the demographic basis. The main target
will be people between the age of 9-20.
Targeting- Unilever will target teenagers and young adults to increase the sale of new innovative
product blueberry and pomegranate yogurt.
Positioning- Cost and quality positioning strategy will be used by Unilever, in which they will
reduce the cost and increased the quality. Innovation is not always cheap, it takes years to come
forward from the original concept to bring it in the market. From starting the process and seeking
the new prospective might create the opportunities and might saves the cost as well as time. New
approaches in in technology sometimes might not have high profile as they just come up in the
market. Unilever has just do the some changes in supply chain and the approaches toward the
manufacturing have save the millions and it faster the idea than anyone can ever imagine.
Budget
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Sources Expenses (£)
Production 50
Rent 100
Salary 50
Total 200
Different ways to access funding:
Friends and Family
As the company grows it needs the additional funding, they invite their friends and
family to invest in their company, they know that their money may not be returned. In most cases
they are not investing in the business they are investing in you. Both the parties understand that
this investment is the grant, at the same time if the enterprise succeeds all the risk takers will get
the reward.
Boost trapping
As innovation is the experimental stage, the company use their own resources as a
funding and deploy their savings in to the business. In many product innovation Unilever has
deployed their funds.
Venture capital and loan from bank
For the growing businesses it is the best way to owe the funds, at the same time to secure
the loan, these institutions need the financial information of the business and the entrepreneur.
They ned the collateral security as well as guarantee a loan. For the fast growing company, the
organisation reached at the point where they need the venture capital fund for the further growth.
Crowdfunding
Crowdfunding basically means that using of small amount of capital from the large
number of investors who invest in a new business venture. Crowdfunding makes the easy
accessibility of investors from the means of social media. Websites of crowdfunding is meant to
bring the investors and entrepreneurs in a single platform. Crowdfunding is being done in the
Unilever as they need the fund in the regular basis.
For bringing new innovative blueberry and pomegranate yogurt in market, Unilever will make
use of crowdfunding. In this small amount of capital will be invested by large investors.
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