Innovation and Commercialization Strategies for Essence Drink

This report examines the concept of innovation and its application to new product development, with a specific focus on Essence Drink, a company launching a mango-flavored "Lassi". It explores the importance of organizational vision, leadership, culture, and teamwork in shaping innovation and commercialization. The report details the 4Ps of innovation, the use of the innovation funnel, and the development of frugal innovation. It also covers the significance of the commercial funnel and the application of New Product Development (NPD). Furthermore, the report evaluates tools used to retain and protect intellectual property. The analysis provides insights into how Essence Drink can strategically innovate and commercialize its products in a competitive market.

INNOVATION

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Explain the term “Innovation” and its importance in comparison with invention ...............1
P2 How organisational vision, leadership, culture and team work can shape innovation and
commercialization ......................................................................................................................3
TASK 2............................................................................................................................................4
P3 4P's of Innovation and use of innovation funnel ...................................................................4
P4 Explain development in frugal innovation ............................................................................6
TASK 3............................................................................................................................................7
P5 Importance of commercial funnel and application of New Product Development ..............7
P6 Build an Innovation Case ......................................................................................................8
TASK 4............................................................................................................................................9
P7 Evaluate different tools used to retain and protect intellectual property...............................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Innovation means converting an idea into a solution that adds value from a customer
point of view. It generally refers to the process creating more effective product, services or
workflows. In terms of business, it deals with improving existing services, creating dynamic
products or executing new ideas (Baldwin and Von Hippel, 2011). It can act as catalyst for
organisational growth and success. Being innovative does not simply means inventing. It is more
related with changing business model or adapting to changes so as to deliver better product or
services to target audience. The chosen company for this report is Essence Drink which provides
mango flavoured drink to consumer. The company has now decided to launch another drink
called as “Lassi” in mango flavour. The given report talks about the concept of innovation in
detail, application to new product development, intellectual property rights used to retain
property and significance of commercial funnel.
TASK 1
P1 Explain the term “Innovation” and its importance in comparison with invention
Innovation refers to the process of creating and modifying existing product with new
additional features or attributes so that they can perform more effectively. The concept of
innovation is important for every company as it enable them to present their product or services
in the market in more better way that will brings development and growth in particular company.
For business, it can be defined as improving product, services or workflows so as to gain high
competitive edge in the marketplace over rivals. It often seen as application that provide better
solution to unarticulated needs, existing market needs or new requirement. Such innovation
usually takes place through the provision of more-effective processes, services, technologies,
business models or products that are made available to society, government and markets.
Innovation considers as an in-built part of business strategy that assist in their future growth and
development. With the help of this, entities are able to gain high efficiency and effectiveness in
their procedures that they are mainly using for meeting customer requirement or demands. The
activities related with innovation includes alteration, modification or imagination of old product
or services in new form (Boudreau and Lakhani, 2013).
Essence Drink has also taken into account various innovative techniques in order to
develop their product or services in the market. There are several ways through which company
can innovate its product that automatically attracts large number of buyers towards them and as a
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result their profitability increases. But before innovation, it become primary important for the
organisation to determine needs and wants of target audience so that they can transform or
modify their product accordingly. For example: Essence Drink has decided to launch “Lassi” in
mango flavour. So they are require to collect information related with customer point of view
regarding mango flavoured Lassi (Goldberg, 2013). If they get positive response from consumers
then they can immediately start its innovation process. Following are some of the importance of
innovation:
11 With the help of Innovation, Essence Drink can formulate effective strategies for seizing
the attention of target audience.11 Through this, revenue and income can be generated systematically.11 Through the concept of innovation, Essence Drink can gain high competitive edge in the
market place over others competitors.11 It help in conducting organisational activities in more effective manner so that they can
easily accomplish business objectives and goals.
Difference between innovation and invention
Innovation Invention
 Innovation is related with improving
existing product by adding new features
in it.
 Innovation may be new or fresh to the
organisation or industry but not new to
the world.
 Innovation deals with
commercialization and novelty.
 Innovation can be defined as a modern
idea which can be applied to the current
situation.
 Invention means introduction of goods
or services in the market for the first
time.
 Invention is something new and the
world is yet not aware of that.
 Invention deals with creating
something extremely new.
 Invention is practical and can be felt by
people.
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P2 How organisational vision, leadership, culture and team work can shape innovation and
commercialization
Business Innovation is related with creating more effective product, services, workflows
or processes. Innovation works as a catalyst for the growth and development of particular
company. Being innovation does not simply means inventing (Drucker, 2014). It is more related
with changing business model or adapting themselves according to market environment in order
to deliver better product or services to customers. Innovation tend to raise the probability of
business succeeding. Moreover it has been figured out that businesses who often innovate
develops more efficient work processes and have better performance and productivity over its
rivals. The concept of Innovation usually undertaken by firms when they want to gain high
competitive edge in the market. They need to shape organisational vision, goals, mission, team
work according to the Innovation. The primary responsibility of managers is to motivate workers
for taking measures in terms of improving their performance. Also they are require to link vision,
mission and its culture with innovation process. Essence Drink has set their goals and mission
according to its latest innovation which are discussed below:
 Vision: It can be described as the long term goal of the organisation that has mainly been
set by its management at time when business is originated. Vision of Essence Drink is to
become best soft drink manufacturing company all across the globe. If they follow their
vision systematically then will be able the capture large market share.
 Mission: Mission is related with short-term goal that keeps on changing with passage of
time. Companies need to achieve their short-term gaols first so as to accomplish long
term objectives. Here the mission statement of Essence Drink to provide quality and
healthy drink to consumers. The company needs to ensure that all their aims and targets
much achieve within their stipulated time period.
 Leadership: For the successful implementation of commercialisation and innovation in
organisation, it is primary important to appoint good manager first who motivates the
workers to perform or act accordingly. Leadership style also plays key role in motivating
and inspiring employees to work more effectively (Goldberg, 2013). For example:
Essence Drink follows participative leadership style in which they involve workers in
their decision making process. When they decided to launch mango flavoured Lassi they
initially try it on their personnel and ask suggestion and feedback from them.
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 Culture: Culture plays key role at the time of introducing something new within the
company. It also assist in encouraging workers and their working style also. There are
several activities that is related with innovation that needs to be taken into account by
manager very promptly.
TASK 2
P3 4P's of Innovation and use of innovation funnel
The concept of Innovation was proposed by Joe Tidd and John Bessant. The main reason
behind developing this framework is to figure out which part of the business requires
modification or innovation (Huizingh, 2011). It is better to make changes as per the market trend
so that customer needs and wants can be fulfilled in an effective and efficient manner. In
addition to that, this concept also assist in determining whether the innovation made by the
business entity will be successful or not. Essence Drink is going to this framework so as to
analyse whether its innovation will be acceptable by consumers or not. Innovation mix covers:
1. Product Innovation: It defines the changes or modification introduced in product which
an organisation offers. This innovation is related with how to make company's product
more attractive or appealing. The suggestion include the ways in which company is going
to make its product better known as incremental changes. For example: Essence Drink is
doing product innovation by launching “Lassi” in mango flavour.
2. Process Innovation: Innovation also play key role in improving existing workflow or
business process. Process defines the way through which goods are created or delivered.
This deals with how can company enhance or change its workflow, supplying, hiring,
manufacturing so that its profits can improved accordingly. For example: Essence Drink
is changing its promotion process so this time they have decided to promote through
social media only.
3. Position Innovation: This innovation deals with re-positioning the perception of already
established product in particular context. Earlier Essence Drink only deals in selling
mango drink which is a kind of refreshment drink but now they have entered in selling
milk product as well (Kline and Rosenberg, 2010). The company has decided to launch
mango flavoured Lassi for the first time.
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4. Paradigm Innovation: This innovation is related to the mental model which shape what
an organisation is about. It means using the concept of innovation how business can
improve. The change occurred can be positive or negative. But it is always recommended
to consider change as a positive process.
Innovation Funnel is a type of funnel that has been undertaken by most of the companies for
investigating the ideas that are mainly present in business and selecting best out of them. It plays
key role in every organisation and enable business owners to choose the best and the most
profitable idea (Leonard and Rayport, 2011). Since there are several ideas that are generated in
the firm and its important to select the best among them. This is the reason when Innovation
Funnel is taken into account. Process of Innovation Funnel includes:
 All generated ideas entered in refinery system tool
 Only those ideas will be selected or taken into account who matched with objectives and
goals of the company.
 Lastly the idea that has been selected is being refined.
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Illustration 1: Innovation Funnel
(Source: Innovation Funnel, 2017)
P4 Explain development in frugal innovation
Frugal Innovation is a method of innovating product or services along with reducing the
complexities related with its price. These are usually undertaken by businesses so as to change
consumer perceptive. Such types of innovation are environment friendly and cost related to its is
low as compared to others. The innovation that has been perceive by Essence Drink can be
referred as Frugal Innovation as they emphasize on making new product by using lest resources
and they are also going to sell it on relatively low prices (Lundvall, 2010). There are several
other companies who have introduced product through frugal innovation such as Haier Washing
Machine, Toyota Charcoal Stove in Ghana, TATA Nano car in India, the Mini Magical Child” in
China and Wonder bag in South Africa etc.
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There are certain factors that is directly related with development and growth in frugal
innovation which are discussed below:
Less Cost Production: In Frugal Innovation, products are normally being produced with very
limited resources and it further sold out at low prices. For example: A Refrigerator was
developed who work even without electricity so it can place or kept anywhere.
Developing reasonable and long-lasting goods: Products or services developed under frugal
innovation remains long lasting. This is mainly because they have generated it systematically
which ultimately increases its tendency to stay for longer duration as compared to other product
(Sawyer, 2011). In addition to that, with the help of this innovation Essence Drink can easily
gain high competitive edge in the market.
Different features of current produced products: Essence drink needs to add some extra
features in their innovative product so to seize the attention of customers and makes them
unique. We have heard about Lassi but never heard about flavoured Lassi and that too mango
flavour.
Developing innovative products: For developing standard quality product, Essence Drink needs
to introduce several innovative methods and tries to carried out in structured and through
manner.
TASK 3
P5 Importance of commercial funnel and application of New Product Development
Commercial Funnel is mostly used by business enterprise for making their innovative product
successful in the marketplace. The process begins with screening of idea and finishes till the idea
is finally implemented. With the help of commercialisation, firms will get the opportunity to
introduce or launch product at larger level and this also help in generating more profits and
capturing the market share of other international countries. But for this, management needs to
ensure standard quality as well (Stokes, 2011). Thus, Commercial Funnel is used by companies
in order to increase their profitability ratio and increase market share as well. Here the main
objective is to provide valuable product or services to customer and that too in an effective
manner. The application of new product consist of series of steps that are discussed below:
Generating Ideas: At this stage, idea emerges. Essence Drink came up with an idea to produce
flavoured Lassi in the market and have decided to serve with potato balls and wedges. They
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believes that the hot and cold combination will be loved by its target audience and will sustain in
market for longer time frame.
Screening of Idea: At this, various ideas that has been generated in the company is critically
evaluated and company will select best among them.
Testing the concept: At this stage, Essence Drink will try its innovative product first on their
employee's so as to know their reaction or response towards their product.
Business analysis: At this stage, manager of food department in Essence Drink will figure out
the results obtained from sample testing (Tebbe, 2011). On the basis of that they will interpret
whether the product will be accepted b consumers in the market or not.
Product development: This stage deals with identifying the need of consumer for that particular
product and end with providing it as per their demand and wants.
Commercialise: At this stage, result of test marketing is taken into account and strategies are
made accordingly.
Product Launch: At this stage, product is finally launched in the market.
P6 Build an Innovation Case
Business Case are used by organisation so as to identify they risk related with investing or
spending in innovation. It also ensure that company must think logically regarding each aspect
related with innovation process. In the given report, Essence Drink has decided to introduce
Lassi in mango flavour. There are series of steps included in building innovation case which are
mentioned below:
Executive Summary: This part normally comes at the end of business case as it normally gives
the snapshot or blueprint of entire business case.
The Need: At this stage, company requires to identify the actual need for innovation. This can
only be possible if company is aware about its problem or issues. For example: Essential Drink
realises that they lack in getting the attention of customers very easily. So they have decided to
be in touch with them through social media platform (Teece, 2010). This gives wider scope to
increase the reach of its product.
Your Solution: The solution generated by company must meet the requirement and needs of
customers in an effective and efficient manner. For its innovative product the company has
decided to promote it on social media platform first.
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Why it is Innovative: This represents the reason for which product is innovative in the market
over its rivals. Here the drink launch by Essence Drink is innovative in context of mango
flavoured Lassi for the first time.
Investment Requirement: There are two sources of investment through which company can
arrange adequate funds which is required to carried out operations smoothly.
 Internal Sources: Such sources are available within the organisation only. For example:
Profit, retained earning can be used for further expansion of business (Stroke, 2014).
 External Sources: Such sources are available outside the business that help company in
managing its day to day operation. It includes: creditors, banks, investors, individual
donation.
Expected Benefit: This stage measure the impact of innovation on consumer, society and
environment.
The Ask: At this, feedback is collected from customer interpreting their views or suggestion
regarding particular product.
TASK 4
P7 Evaluate different tools used to retain and protect intellectual property
Intellectual Property Rights are like any other property rights. They allow owner or
creator of trademarks, patents or copyrighted works to get benefit from their own investment or
work in a creation. Their main purpose is to promote the creation of large variety of intellectual
goods. To accomplish this, the law gives certain property rights to people and businesses so that
they can further use their own creation or allow others to use their work on their behalf.
Mentioned below are some of intellectual property rights tool and its significance:
Patent: Patent grant can be given to owner for its invention. It gives exclusive rights to patent
holder to exclude others from selling, making or using their creation or invention. There are
three types of patents that is exist in marketplace namely design, patent and plant. It gives
protection to patent owner for their creation i.e. any other person cannot commercially used ,
distribute or sold patent invention without its consent (Treece, 2014). Patent gives rights to
patent holder for deciding to whom they want to use their invention.
Copyright: Copyrights is given to owner for its literary work, artistic work, music, sculptural,
sound recording ad graphic works. With this intellectual property right tool, holder gets
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exclusive rights to distribute, create, perform, copy or display the work. Copyright rights exist
from the moment when the work gets created.
Trademarks: Trademark is often by company's so as to distinguish its product or services from
that of competitors. It can be in the form of word, symbol, phrase or design. The mark chosen by
organisation must be distinctive from its rivals (Sawyer, 2016). With the help of this intellectual
tool it become much easier for consumer to identify and purchase a good or services on the basis
of its specific quality and characteristics as indicated by its unique trademark. Trademarks
ensures that creator of marks have exclusive rights to use their products or allow others to use it
in return for payment.
Trade Secrets: It is a process, device, formula or other business information that business
entities keeps private from that of competitors so as to gain business advantage. With the help of
this intellectual rights company can protect their products or ideas from competitors. It is the best
way to gain high competitive edge in the market over rivals.
CONCLUSION
From the above mentioned report it can be conclude that innovation plays key role in
organisational success and growth. As customer needs changes frequently it become chiefly
important for entities to innovate their product so as to fulfil their needs and wants in an effective
manner. There are various tool that has been discussed in this report such as innovation mix,
frugal innovation, application of new product development which makes easier for companies to
launch its product systematically.
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REFERENCES
Books and Journal
Baldwin, C. and Von Hippel, E., 2011. Modeling a paradigm shift: From producer innovation to
user and open collaborative innovation. Organization Science. 22(6). pp.1399-1417.
Boudreau, K.J. and Lakhani, K.R., 2013. Using the crowd as an innovation partner. Harvard
business review. 91(4). pp.60-9.
Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
Goldberg, D. E., 2013. The design of innovation: Lessons from and for competent genetic
algorithms (Vol. 7). Springer Science & Business Media.
Huizingh, E. K., 2011. Open innovation: State of the art and future perspectives. Technovation.
31(1). pp.2-9.
Kline, S. J. and Rosenberg, N., 2010. An overview of innovation. In Studies On Science And
The Innovation Process: Selected Works of Nathan Rosenberg (pp. 173-203).
Leonard, D. A. and Rayport, J., 2011. Spark innovation through empathic design. In Managing
Knowledge Assets, Creativity And Innovation (pp. 355-369).
Lundvall, B. Å. ed., 2010. National systems of innovation: Toward a theory of innovation and
interactive learning (Vol. 2). Anthem Press.
Sawyer, R. K., 2011. Explaining creativity: The science of human innovation. Oxford University
Press.
Stokes, D.E., 2011. Pasteur's quadrant: Basic science and technological innovation. Brookings
Institution Press.
Tebbe, J., 2011. Where good ideas come from: The natural history of innovation.
Teece, D. J., 2010. Business models, business strategy and innovation. Long range planning.
43(2). pp.172-194.
Online
Difference between Invention and Innovation. 2016. [Online]. Available through:
<http://keydifferences.com/difference-between-invention-and-innovation.html>.
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