Innovation Strategies and Business Case for Essence Drinks Report

This report provides a comprehensive analysis of innovation strategies for Essence Drinks, a UK-based company specializing in Mango Lassi. The report begins by defining innovation and its importance, contrasting it with invention, and then explores the roles of organizational culture, teamwork, vision, and leadership in fostering innovation and commercialization. It then delves into the 4Ps of innovation, using the innovation funnel to examine innovative ideas, and discusses the development of frugal innovation within an organizational context. The report further examines the commercial funnel and the application of new product development, culminating in the creation of an innovation business case for the company, including potential funding sources. Finally, it evaluates various tools for developing, protecting, and retaining organizational knowledge and intellectual property, providing a holistic view of innovation management for Essence Drinks.

INNOVATION

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Innovation and its importance to business organisations in comparison with invention. .1
P2 Role of organisational culture, teamwork, vision and leadership in shaping innovation &
commercialisation...................................................................................................................2
TASK 2............................................................................................................................................4
P3 4Ps of innovation and use of innovation funnel in examining innovative ideas...............4
P4 Development in frugal innovation in organisational context............................................5
TASK 3............................................................................................................................................7
P5 Importance of commercial funnel and application of new product development.............7
P6 Build an innovation business case for company including ways to access funds.............8
TASK 4 .........................................................................................................................................10
P7 Various tools to develop, protect and retain knowledge & intellectual property............10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Innovation is defined as a procedure which include multiple activities so that existing
work can be performed in different ways. Having new ideas, imaginations and creative thoughts
is associated with innovation. It will benefits the business organisations in creating value by
providing effective solution for problems. This assignment is written for Essence drink which is
a UK based organisation offering Mango Lassi to their customers. Company was founded two
years back and achieved high profitability and sales due to innovative approach (Boruah and
Das, 2017). This report will cover innovation and its importance to business organisations.
Manner in which culture, organisational vision, teamwork and culture can shape
commercialisation & innovation is discussed. Beside this, 4Ps of innovation and use of
innovation funnel in examining innovation idea is carried out. Development in frugal innovation,
commercial funnel and application of NDP are stated. At last, business case is prepared along
with evaluation of tools so that organisational knowledge and property can be develop, protect &
retain.
TASK 1
P1 Innovation and its importance to business organisations in comparison with invention
Innovation is referred to the process in which business organisation emphasize to bring
new and creative products in market. This will benefits them in attaining organisational goals
and long term success. Essence drink is a small scale company and provides healthy Mango
Lassi to their customers. As company was not innovating new product, their sale start decreasing
in third year. In this regard, business owner of company is going to innovate new range of Lassi
such as strawberry and chocolate Lassi.
Benefit of bringing this innovation in comparison with invention
Innovation plays an essential role as it is a growth as well as developmental tool for
Essence drink. It will help the company in gaining the trust and confidence of customers in an
appropriate way. In addition to this, innovation would allow the firm to enhance creativity within
the organisation, which would encourage the staff within the company to work in an effective
manner. In addition to this, innovation would also be beneficial for the firm to cut cost in
comparison to invention. This is because it is associated with improvements in processes and
products, whereas invention is a complete development of a new offering.
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In addition to this, there are several effective features of innovation which are mentioned
below: Enhanced Usefulness: One prime feature of innovation in terms of Essence Drinks is
that it enhances the usefulness of their offerings. With modification in their taste or other
attributes, people would be getting more tastes and varieties to try with the help of their
innovation.
 Diversity in Workplace: Another effective feature of innovation is that it allows a
company to incorporate diverse work culture within the company. This is because, with
innovation, the creative side of each employee could be explored within Essence Drinks
and this could enhance the scope of effectiveness within the future offerings of the firm
along with their diversity.
In this regard, company is going to introduce chocolate and strawberry Lassi so that sales
and revenues of company can be enhanced considerably. For company, Lassi is their main
product and carrying out innovations in it will help company in attaining wide success. This is
the reason company is going for innovation and not invention. Inventing new product will
deviate them from Lassi and that can be a big disadvantage for company as Lassi is their
speciality. This can also decrease sales of company. In this regard, explanation is provided
below:
Innovation Invention
 Innovation is associated with
implementation of new ideas and
thoughts in the existing products or
services of an organisation. In this
regard, essence drink is brining
innovation by introducing chocolate
and flavoured Lassi.
 It is related with bringing new product
in market that do not exist before.
Company is not going to invent any new
product because Lassi is their speciality
and replacing it with other product can
harm company with less sales and loss
of customer base.
 It assists in adding value to those
services or products which already
exist in marketplace.
 It will assist in introducing new product
or service within marketplace.
 For innovation different skills are  In order to perform invention, only
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needed like technical, marketing and
strategic skills.
scientific skills are required.
 It takes place when existing products
required a modification because of
different reasons like less customer
attention etc.
 Invention is carried out when a new
idea strikes the mind (Knoke, Missikoff
and Thoben, 2017).
 Activities related with innovation
performed by different departments of
a company.
 Activities associated with invention are
limited to research and development
department only.
P2 Role of organisational culture, teamwork, vision and leadership in shaping innovation &
commercialisation
It is essential for an organisation to have clear vision and effective culture, teamwork and
leadership skills. This will help them in attainment of organisational goals in a proper manner.
Essence drink is needed to tell its mission and vision to entire work staff so that joint efforts can
be carried out to attain organisational objectives. Clear vision of company will benefits in easy
flow of business activities. Explanation of organisational culture, vision, teamwork and
leadership in context with Essence drink is stated below:
 Vision: Vision of the company is to provide new range of drinks to UK population so
that company can achieve their goals and targets in a proper manner. Also, company want
to provide healthy drink to their customers so that they can get different minerals and
vitamins which are required to life a healthy life. In this context, company is innovating
new flavours of Lassi so that customers can be satisfied along with high business profit.
Clear vision will help the employees in getting right guidence so that new flavours of
Lassi can be introduced in an advantageous manner.
 Culture: To innovate a product or service in a proper manner, every organisation needs
an appropriate organisational culture. It will include different rules, belief, values and
norms which are implemented by management in Essence drink (Moreddu, 2016). If
working culture of company will be supportive then new ideas will be given by
employees for producing strawberry and chocolate flavour Lassi will be implemented to
acknowledge the best alternative. Due to this, new Lassi can be prepared in cost effective
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manner. In addition to this, it is highly necessary for Essence Drinks to ensure a culture
which fosters innovation. For example, Earlier, the organisational culture was quite rigid
as the firm was adopting standard ways to produce their offering within the dynamic
business environment. Thus, it was required for the firm to enhance the importance
within the innovation in order to ensure success within their offerings. Another factor for
the firm to modify its organisational culture is that if there would be resistance within the
company in regards with innovation, then it would be very complex activity for managers
at Essence Drinks to comply with the innovative requirement. Moreover, a culture must
be developed which focuses on the problems within the organisation and understands the
need of innovation in the products.
 Teamwork: Within a company there are different teams like problem solving, virtual,
cross functional etc. It is vital for Essence drink to have different teams so that all the
work can be divided among employees according to their abilities. Also, teamwork will
benefits the company in attaining their objectives of innovating new flavours of Lassi
with the help of collaborative and participative work. Hence, to implement innovation,
manager of company is required to formulate an effective team so that all the work can be
accomplished timely and properly.
 Leadership: In order to bring innovation in a proper manner, effective leadership style is
required. This is because leader is a person which provide support and guidance so that
all the work can be accomplished in a proper manner. Also, good leadership will sustain
good relation among employers and employees. This will benefits in carrying out
innovation and increased sales in an easy manner. For example, Participative leadership
will benefit the company in getting different ideas from different employees due to which
only advantageous decision will be taken by company.
TASK 2
P3 4Ps of innovation and use of innovation funnel in examining innovative ideas
To bring something innovative within marketplace, company can use innovation mix
model which is stated by Bessant and Tidd. In respect with, Essence drink, this model is
mentioned below:
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 Product innovation: By carrying out innovation in products, it became easier for
business organisations to satisfy the demand of customers and market as per their
requirements. In this regard, Essence drink is going to introduce chocolate and strawberry
flavoured Lassi so that their existing and potential customers can be satisfied and sales of
company can enhance. New Lassi will have taste and flavours of Strawberry and
chocolate due to which customers will feel attracted toward the product.
 Process: Essence drink is a small organisation which provide healthy and flavoured Lassi
to their customers. To sustain a strong presence in market with maximised sales,
company is required to follow effective process so that standardised product can be
offered to customers. To maintain effective process, company is required to assure that
material and resources will be supplied in a timely manner. Also, company is require to
hire skilled people which have some knowledge about different taste and flavours.
(Schmidt and et.al., 2018). By giving proper training to these workforce, company will be
able to produce strawberry and chocolate Lassi as per expectation of customers due to
which sales of company will increase. It will benefits in high revenue and sales.
 Position: It is related with the position of Essence Drink within marketplace and in the
minds of customers. Hence, acknowledging current position of company will helps in
identifying if customers are satisfied or not. As position of company is getting down in
market, in this regard Essence Drink is going to innovate new flavours in Lassi so that
high position in market can be attained.
 Paradigm: It is the last component of 4Ps of innovation and it associated with varying
perspective of viewing business activities. It involves analysing same things from
different perspectives. For ex, launching strawberry and chocolate drink will help
company in enhancing revenues but it can further reduce the sale of Mango Lassi. These
are two perspectives in context with company.
Innovation Funnel
Innovation funnel is a technique which is used to describe steps which are required to
develop a product or process. Purpose of using this innovation funnel is that it will help Essence
Drink in innovating a product which will be able to meet market requirement in a proper manner.
Stages of innovation funnel are mentioned below:
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 Wide mouth of the Funnel: This is first stage in which innovative and new ideas are
gathered with the help of survey or research. It will help Essence Drink in acknowledging
the choice and preference in a proper manner so that those products can be introduced
which will results in achievement of organisational targets. For ex, people in UK are fond
of strawberry, cranberry, banana and chocolate shake. Selection of Idea: During this stage, company chooses best method or idea from all
available alternatives (Bianchi and et. al., 2010). This idea is selected after
acknowledging its effectiveness. For ex, company chooses chocolate and strawberry
flavour for their Lassi as it will bring more revenues and profits. Main objective of
company is to attain high sales that can be accomplished by working on this selected
idea.
 Implementation of idea: It is the last stage where choose idea is practically implemented
so that company can attain high competitive advantage. It needs efforts and time of
employees so Essence drink require to recruit skilled and knowledgeable employees. This
will benefits in preparing Lassi as per customers demand.
P4 Development in frugal innovation in organisational context
Frugal innovation: It is referred as a procedure in which different activities are carried
out to reduce complexities while introducing new product. This will helps the company in
eliminating those features which can hinder the popularity of product. Elimination of those
elements which do not add value to the product is regarded as frugal innovation. As per the
concept, management is trying to innovate new product so that issue of low sale can be resolved.
This model will benefit Essence drink in preparing new range of drinks as per the expectation of
customers. For example, Company can hire skilled employees which will be able to manage
activities related with new Lassi in a proper manner.
Frugal Innovation is highly effective for the organisation to be developed as it is
associated with several benefits and is highly useful. For instance, it could help Essence Drinks
in cutting up the cost of production and development of their new range of multi-flavoured Lassi.
This is because frugal innovation works towards finding out effective and easier ways of
producing the product appropriately. Moreover, the concept of frugal innovation could be more
effectively utilised by the organisation through bringing in changes in their systems and
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eliminating processes and procedures which are adding up the cost, along with adoption of the
ones that are technologically advanced and enhances the quality and not cost.
Different stages of frugal innovation are mentioned beneath: Finding opportunity in adversity: It is the first stage where issues faced by firm are
reframed and measures are taken so that they can be transformed into opportunities. For
example, Lassi is the main product of Essence drink but sales are decreased in third year
as people were tired to drinking same and same drink. In this regard, company has
changed the flavour of Lassi so that interest of customers can be regained. This is an
opportunity for company (Casadesus‐Masanell and Zhu, 2013). Thus, this enhances the
need for innovation within the company. Moreover, a better approach in this step for the
firm is to adopt frugal innovation to cease each opportunity there is within the market. Do more with less: In this stage, available resources of company will be determined with
the help of employees and efforts are carried out to use them in an advantageous manner
so that high profits can be achieved. For example, to innovate new Lassi, company is
going to use existing machines and ingredients so that stocked resources can be utilised
properly. In this stage, it is very necessary for the company to determine resources on the
basis of their advancements in technology as well as their complexity. Company will
order only chocolate and strawberry flavour due to which company will not require heavy
investment in introducing new product. Think & act flexibly: Here, management of company encourage its workforce to
generate flexible ideas. This will benefit company in performing business activities in a
more desired manner. For example, company can produce a mixed flavoured Lassi that
will include taste of mango and strawberry together so that available mangoes can be
utilised properly. In addition to this, flexibility within the organisation would help the
firm in adopting the frugal innovation within the firm more appropriately. Keep it simple: Essence drink is needed to keep its process simple so that Chocolate and
strawberry Lassi can be prepared by efficient means. Process of preparing Lassi will be
similar to previous process, only modification will be changed flavours. Due to this
employees will be capable to work without facing complexities. Furthermore, another
requirement of frugal innovation is to enhance the processes to suit technological
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advancements. Thus, while working with new and better equipments, employees would
be encouraged in applying the same more effectively.
 Include the margin: Small companies such as Essence drink focus on satisfying
customers so that high sales can be attained. It is possible by acknowledging the
requirements of people so that company can prepare new products i.e. chocolate and
strawberry Lassi in accordance with that. Doing so is an effective manner to reduce
complexity in processes in terms of development of limited flavours that are required by
the marketplace and thus, the firm would be able to apply the same more effectively.
TASK 3
P5 Importance of commercial funnel and application of new product development
Within business environment, Commercial funnel is a framework which involve different
phases that helps in reforming or utilising existing goods in a proper manner. Benefit of
commercial funnel in context with Essence drink is mentioned below:
Pricing policy: Essence drink is providing new flavour of Lassi in moderate price which
will be affordable by UK population. This funnel will help company in setting price that will
help the company in achieving high profit without impacting consumer buying behaviour.
Improving ways of growing business: Commercial funnel posses important aspects for
development and growth. As demands of customers will be satisfied, sales of company will
increase due to business will grow appropriately (Damanpour and Aravind, 2012).
Process of NPD
While introducing new product in market, it is essential for business organisation to
follow the process of new product development. In respect with company, this process is defied
below: Idea generation: It is the first stage in which necessary information and opinion of
customers is collected so that those products can be produced which will help company in
achieving expected outcomes and objectives. Here ideas related with chocolate and
strawberry Lassi has been generated. Idea evaluation: In this step, generated idea i.e. introducing new flavours of Lassi will
be evaluated so that potential threats and obstacles can be removed.
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 Concept definition: Company can use concept definition in order to promote new
flavoured Lassi. For ex, this Lassi is healthy and can be drink while travelling to reduce
tiredness. This will help in gaining attention of customers. Strategies analysis: Here company will formulate different strategies to gain compettive
advantage over rivals. In this regard, company will use moderate pricing strategy so that
company will have high sales and enhanced profitability.
 Product development and testing: This is the last stage where Essence drink will be
required to taste Lassi before introducing it so that required modifications can be carried
out. It will helps in maintaining taste and quality of Lassi (George, McGahan and Prabhu,
2012).
P6 Build an innovation business case for company including ways to access funds
Business case is defined as a verbal or non-verbal document in which necessary
information to attain organisational objectives is mentioned. Incorporating all important
information will benefits Essence drink in performing their business activities without facing
much complexities. Business case for Essence drink is mentioned below:
Executive Summary
It is a business case for Essence Drink in which important information about new
flavoured Lassi will be mentioned. It is essential to analyse market and formulating proper
strategies before introducing product in market. This is because without appropriate strategy new
product launch can became a fail due to which company will have to face heavy revenue loss.
Mission statement
Main mission of company is to provide healthy drink to its customers without
compromising with taste. This will helps in keeping customer happy due to which high amount
of sales can be enjoyed by company. Statement purpose of company are given below:
 Satisfying the needs of customers by offering them products which are more good than
their expectations. Ensuring resources and material which will be used to produce Lassi will be of good
quality.
Problem Statement
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Essence Drink is facing several issues within their organisation related to a substantially
reduced turnover as well as decline in their customer loyalty. Thus, the requirement arises for
them to modify their offerings in relation to enhance the performance of business.
Needs
Solution development within the firm would require certain aspects like effective market
research, along with certain resources, both human as well as technical.
Proposition of Idea
In context with effectively enhancing the overall business performance and deal with
their problems effectively, the firm would be adopting new range of Lassi that would be multi-
flavoured, for the organisation to appropriately enhance their customer loyalty by giving them a
new taste in this beverage.
Reasons of success
It would succeed in respect to the company, as there is a new innovation in flavours that
is being brought up by the firm. This would engage the lost customers with the company and
attract new individuals towards the company to try the new taste.
Resources
In order to gain competitive advantage over rival companies, there are different kind of
resources which will be required by Essence drink such as raw material, production machine,
chocolate, strawberry, funds etc. These resources will be required by company to prepare Lassi.
Market analysis
It is essential as it will helps in acknowledging the opinion and expectation of customers.
Target market
Company is going to target people from all age group such as kids, teenagers, adults and
aged people. This is because drink offered by company is not carbonated and can be drink by
people of any age group.
Financial projection
For preparing strawberry and chocolate Lassi, company will require 30, 000 pounds.
Ways of funding
Funds and capital are the back bones of company and it is not possible for manager in
Essence Drink to perform business activities with shortage of funds. Essence Drink can arrange
funds from different places such as banks and other financial institutions or friends and family.
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