Unit 8 Innovation Report: Essence Drinks Case Study Analysis

This report provides a comprehensive analysis of innovation strategies for Essence Drinks, a company facing declining profitability in a competitive UK market. It explores the significance of innovation and its role in gaining a competitive advantage, examining how organizational vision, leadership, and culture can shape innovation and commercialization. The report delves into various sources of innovation, the 4Ps of innovation (Product, Process, Position, Paradigm), and the application of the innovation funnel. It also covers frugal innovation, analyzing its application and benefits. Furthermore, the report discusses the commercial funnel, NPD processing, and the development of an innovative business case, including funding access. It concludes by examining challenges in developing successful innovation and tools used by organizations to overcome these challenges.

UNIT 8 Innovation

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Innovation and its significance ..............................................................................................3
Shaping innovation and commercialisation............................................................................4
Various sources of innovation ...............................................................................................4
Innovation 4Ps and using innovation funnel..........................................................................5
Frugal Innovation...................................................................................................................6
Analysing and applying innovation funnel.............................................................................7
Critical analysis......................................................................................................................7
Commercial funnel significance and applying NPD processing............................................8
Developing innovative business case for an enterprise including the ways to access funding10
Different tools used by organisation.....................................................................................10
Nature of innovation and how organisation can overcome the challenges of developing a
successful innovation............................................................................................................11
CONCLUSION..............................................................................................................................12
References......................................................................................................................................12

INTRODUCTION
Innovation is referred as the process of making an invention or idea into a goods and
services which help in creating value for customer for which customers are willing to pay. In
simple terms innovation is the new method of doing something, innovation in business play an
important role in its success and can help the organisation in gaining the competitive advantage.
This report is based on case study based on Essence Drinks which is facing decline in
profitability as various of competitors have entered in the UK markets. This report discusses
about the innovation and its significance and how organisation's, leadership, vision and culture
etc can help the company in shaping innovation and commercialisation. This report also
discusses the 4Ps of innovation and the use of innovation funnel to shape innovation and also
explains the importance of commercial funnel.
TASK 1
Innovation and its significance
Innovation means if someone improves or makes significant contribution to the current
goods and services while as invention means creation of a product and introducing of the product
for the first time. In innovation new values are added to the current product and is the practical
implication of new idea but invention is entirely creation of new product. Innovation may be the
combination of various products or processes which increase the value of the product for the
customers while as invention is the single product process which may or may not add value for
the customers (Westland, 2016). Invention is the occurrence of the idea for the product that has
never been existed before but on the other hand innovation involves the implementation of the
idea for process or product for the very first time which may attract the customers towards the
product or service. Innovation can be really important for Essence Drinks by innovating the
business, company will be able to solve the business problem, innovation can also help the
company in increasing its productivity by bringing creativity or by working smarter. Also,
Essence Drinks can use make innovation in marketing its business through creative ideas and
innovations which can make a company's business to stand different from others. Innovation is
the easiest way of beating competitors as Essence Drinks just need to put little creativity in its
business and can easily with new drinks or change in recipe which can prove beneficial for the
organisation in increasing its sales.

Shaping innovation and commercialisation
Organisation vision can help the company in shaping the innovation and
commercialisation as if vision of the organisation is to increase sales and gain profits so, it is
important for the Essence Drinks to make innovation and bring something new in the market.
Leadership also shapes the innovation and commercialisation, as it depends on the creativity of
leader and it efforts to bring changes in the organisation and motivate employees for changes
process. Type of leadership style adopted by the leaders also help in shaping the innovation for
example transformational leadership style where leaders are visionary, daring and risk takers
which can bring change in the Company (Andreassen, Lervik-Olsen and Calabretta, 2015). It is
the culture of the organisation which is the real driver of change if Essence Drinks have adopted
innovative culture in the company it can result in innovation and commercialisation as it is the
culture which motivates the employees towards the change, and they work for it. Another driver
for shaping the innovation and commercialisation in any workplace is teamwork, if there is a
proper collaboration within the team member and understand each other can result in innovation.
Different team members of the organisation have got different mind and share ideas with each
other and support each other which can surely result in commercialisation and innovations in the
business.
Various sources of innovation
There are different sources of innovation which can result innovation in Essence Drinks
which are as follows:
Market Structure: Company's exixting market structure can give rise the innovation, by
analysing the existing market Essence Drinks can bring innovation by identifying the customer
needs and trends in the market.
Demographics: People lifestyle can also give rise to innovation, changing lifestyle and
preference of the people for example a customer may feel need of drinking alcohol, since
drinking is dangerous, but they need to satisfy their urge (Jhon, 2017). Lifestyle needs may be
small but their fulfilment is the important requirement for the company so, this where innovation
finds the opportunities.
Essence Drinks in fostering and developing the culture as well as environment of
innovation in the organisation through different ways:

1. Flexible work environment: Developing a flexible work environment in the organisation can
increase the productivity and let new ideas to flow. Essence Drinks should encourage the
supportive and friendly environment where employees can speak freely and share their ideas
with the top management.
2. Hire for culture: Company should look for the team who are able to understand company's
vision and align with the organisational culture. To have a team which shares single vision and
work together it brings various opportunities for innovation in the organisation.
3. Diversity: Essence Drinks should put together a team of different backgrounds, capabilities
and passion. Having a group with diverse set of problem solving approaches and ideas can push
the company's product forward and can result is successful innovation in the organisation.
Innovation 4Ps and using innovation funnel
4Ps of innovation is a framework which can be used by the company to explore the
innovation space and defines the direction of innovation and focuses on the resources for
innovations. It is vital for the company to innovate in to survive in the competitive market so, for
Essence Drinks in order to remain competitive for the long term in the market must be innovative
in all the four areas which are:
Product: What type of product is offered by the company to customers
Process: How is the company delivering the its product to customers, i.e. it should make
innovation in process of business.
Positions: What are the area to get the company's offerings, company has to identify the ways of
communication and how do people see company's offerings etc (Innovation Funnel
Management, 2013).
Paradigm: Company should be able to change its basic model i.e. to identify the ways of
improving the business.
Essence Drinks can implement various stage of innovation funnel for shaping the ideas of
innovation which includes:

Illustration 1: Innovation Funnel
(Source: Innovation Funnel Management, 2013)
1. Mouth of funnel: It is the first stage of innovation funnel where company has to gather as
many ideas as possible, as gartering of information is important and easy in order start
innovation process.
2. Narrowing the funnel: In the stage the ideas which are generated in first stage are screened
which involves matching ideas with goal of the organisation.
3. Narrowed part of the funnel: In this stage Essence Drinks have to make sure that ideas
which has been selected is tuned with the company's objective which is to increase the sale of the
organisation.
So, innovation funnel can help in shaping the innovative ideas in Essence Drinks.
Frugal Innovation
Frugal innovation is the process of decreasing the complexness and price of a products
and its production. It normally means removal of useless feature in the products in order to make
its more useful or durable. It is the concept that motivates a company to respond to the
limitations of the product whether it may be material, financial and it turns these constraints into
innovative ideas for the practical business solutions. For example Essence Drinks products which
results from Frugal Innovation principle should be priced as 40 to 60 percent lower as compared
to alternative but should have almost 60 to 70 percent of same functionality without
compromising the quality (Shapira, Gök and Salehi, 2016). Essence Drinks can use Frugal
Innovation by developing a product for its customers which is affordable, functional, having a
good quality and is easily accessible for customers with addition to effective marketing.

Company should learn how to make innovations under the resource constraints and turn
adversity in to growth opportunities for the organisation by delivering a solutions which can be
termed as affordable excellence. For example Essence Drinks can produce a drink which is
contains all the ingredients of quality drink but is offered by the company at low cost as
compared to its competitors and this drink has the capability to change the mind-set of the
customers which can be beneficial for the company.
Analysing and applying innovation funnel
Building an innovation funnel in an organisation begins with the strategic thinking in
order to be sure that output of the innovation is fully aligned with company's strategic objectives.
It does not matter how much resources are available for Essence Drinks but the major goal
should be to increase the overall value of company's products. Innovation funnel can be
beneficial for the organisation but it needs to be developed and applied properly within the
organisation which can be done in following ways:
Identification of problem: It is the first for applying Innovation funnel which is to identification
of problem. Company need to identify the problem that they are facing in carrying out the
business.
Ideation: It involve generation of various ideas in order to solve the business problem like
increase in sale of Essence Drinks products in UK (King, 2018). Company need to come up with
different ideas.
Conception: Once company has come up with number of ideas, Essence Drinks should select
the ideas which is best for the organisation and appropriate resources should be allocate for the
viable plan and opportunities.
Implementation: If company thinks that idea will solve the business problem it should be
implemented in the well planned manner in order to bring innovation within the business
process.
Critical analysis
As per the views of Jordan and et.al., (2016) developing innovation strategy for the
organisation is critical for driving the successful and sustained innovation. It will help in creating
the alignment of various innovation efforts across the different team which are involved in the
innovation process. Developing innovation is very important for the organisation in order to
survive in the competitive market. In order to develop innovation Essence Drinks should set a

concrete objectives which is the major factor for developing an innovation and embedding it. It
has been argued by Lipkova and Braga, (2016) not all innovation strategies can work for the
organisation so, company need to identify what will work and what will not work. This will help
the company to prevent unfruitful results, Innovations can be embedded in the organisation by
innovation among the employees by motivating them and supporting them to work for
innovation process. Creating a motivation among the employees in the workplace which includes
rewards, incentive programs, contents etc which can result in innovative culture in the
organisation. As per the views of Weng and et.al., (2018) it is important for the company to
measure the success of innovation. In order to measure the success, company should set the
innovation bench mark and should try to put the process in place to measure against them.
Company with clear innovation strategy can help in building a powerful innovation culture
which can have a strong impact on the company's development.
Commercial funnel significance and applying NPD processing
Commercial funnel or sales funnel is very important for the organisation in various ways
which are as follows:
1. It can help Essence Drinks in picking up the suitable marketing strategy which will lead to
maximum sales for the company.
2. It will also help the company to know how to relate to your customers which will help the
company to describe their products to customers.
3. It can also help the company to generate more sales by picking up the marketing strategy and
knowing how to relate to customers in better way can drive more customers towards the product
which can result generation of sales.
New product development (NPD) is way which leads to the actual products and its
commercialisation in the market like Essence Drinks is developing a new drink which is Rose
Mango Flavoured Lassi in the market it can be explained below:

Illustration 2: New Product Development
(Source: 8 Steps of New product Development, 2019 )
Idea generation: NPD starts with the ideas generation, company can generate ideas from any
where and be many. Company can generate idea from various sources such as internal sources,
SWOT analysis, customer research etc.
Idea screening: In this stage of NPD best and suitable ideas are chosen how to develop new
drink.
Idea development and testing: In this stage NPD includes the concept development and testing.
Concept is the blue print or detailed strategy of the idea and once the idea has passed the
screening stage then it is turned in the concepts for testing purpose.
Strategy analysis and development: Once the company has finalised the concept then it is the
time for deciding the marketing strategies and other business strategies for market new Lassi.
Product development: When all the strategies are approved then the product concept is
transformed into real tangible product (Carayannis, Grigoroudis and Goletsis, 2016).
Test Marketing: In this stage test sample is introduced in the market for obtaining feedback.
Commercialisation: In this stage product is ready for marketing and marketing strategies are
developed and marketed mix is put into use. Also, in this stage various departments are briefed
with duties and targets in order to increase the sale of new product.

Developing innovative organisation case for firm involving the technique of accessing financial
support
Essence drink is continuously experience decline in income and profit margin. Business
entity is required to identify new ideas for exploding income and profit. Business entity can
utilized the personalized marketing as well as direct distribution tactics, as it will help an
organization in earning high revenue. Direct distribution plan of action would assist an
organization in developing strong relationship with customers. Essence drink can use digital
technology for promotion of goods or services. As marketing through social media tactics
would help organization in promoting their products at large scale (Morrish, Whyte and Miles,
2019.). Use of the social media platform tactics would assist organisation in providing service
to the target audience and will help enterprise in influencing customers to buy new Rose mango
flavoured Lassi.
In relation to the essence drink organization can launch Rose Mango flavour lassie, as
this will provide firm an ease in attracting more number of clients. The few elements which
need to be considered by management in essence drink before planning to promote new flavour
of drink are money, message and media (Lawton Smith, Bagchi-Sen and Edmunds, 2018). It is
crucial for management in essence drink company to more conscious when selecting media for
promoting new flavour of lassis as media is the factor which has significant effect on the
purchase decision of customers. Print media, digital media could be utilised by organisation for
promoting the new flavoured lassi.
An organisation can obtain funds for facilitating innovation from angel investors. These
are those people who have sufficient amount of financial resources, and they make investment
for getting the higher return (Osoro, Kirama and Vermeulen, 2017.). The main advantages of
obtaining funds from angel investor is that in case of loss the person performed innovation need
not repay the borrowed amount.
Different tools used by organisation
Essence Drinks can use various tools in order to developing, retaining as well as protecting
knowledge and intellectual property by using various fundamental tools which are as follows:
Trade marks: If an organisation invents something new or does any innovation in pre-existing
product company can give name to the product so that it can be easily recognised by customers.

Trademarks can be in the form of the symbol or any name which may be given to the product. It
may also include a image in the form of logo (Aryal and et.al., 2016). Trademarks can help the
customers in identifying the products from its competitors in the market. Essence Drinks can also
develop its trademarks which can help the company in differentiating its products from others.
Patents: Patent is a kind of intellectual property which can give its developer a right to prevent
others from using, making, selling as well as importing an invention for limited period of years.
If a company invents something irrespective of any idea company can take patents for that
particular product as an inventor. So, it gives right to the company to protect their invention for
getting copied from others so that others can not sell or use Essence Drinks product in their
name. So, it is recommended that company should patent its innovative drink so the other
competitors can not copy their idea and sell it.
Copyright: It is also a form of an intellectual property which grants an owner of creative work
an exclusive legal for determining in which conditions the original work can be copied and used
by others in a limited period of time. Copyright law protects creator of original material from
getting unauthorised use or duplication (Kuratko and Hoskinson, 2016). It is to be noted that for
any original work to be protected by copyright it is must that product is in the tangible form.
So, these are the tools which can be used by the company to develop, retain and protect
knowledge and intellectual property. Tools used above can prove beneficial for the company in
order to protect their brand from its competitors so, that other company can not use their ideas or
recipes of making drinks. As it is very easy for any company to copy the recipe of drinks and
also there is a high chance of become innovation very common in the UK markets. So, it is
important for Akshay Kumar that he should design new ideas or innovations through legal
patents. Owner of the product should also trademark its products by using image or logo which
will help the customers to identify the product easily form range of similar products. Essence
Drinks can own a copyright on the design of the bottles as design of its logo and also for its
advertising or anything which is created by the company that is considered as original work that
requires a creative effort. So, using these tools can enable the company to take safe side in order
to protect there products through a legal system.

Nature of innovation and how organisation can overcome the challenges of developing a
successful innovation
As per the views of Sebastianski and et.al., (2015) innovation is viewed as an application
of better solution which help the organisation to meet the new requirements of the markets.
Innovation is normally manifested through engineering process when a problem which is to be
solved is of scientific or technical in nature. There are various ways for developing an innovation
and involves a step by step process form idea generation to its commercialisation. If a company
faces a business problem like decline in the sale of its products in the market company can solve
this problem by generating a new idea and testing it once testing is successful and then brining a
new product into the market. So, this is how innovation is developed in the organisation which
can help the organisation to solve its business problem. As illustrated by Schmitz and et.al.,
(2017) there are various challenges which arise while making innovations and it is important to
overcome theses challenges. Various challenges are missing innovation strategy company can
overcome this challenge by developing an innovative culture in the workplace. Another
challenge faced is lack of collaboration, company can overcome this challenge by setting a
proper communication process in the organisation and developing a friendly environment. Also,
company should bring diversity in the organisation which can help in fostering the innovation in
the workplace.
CONCLUSION
It has been concluded from the above study is that innovation by companies is very much
essential in order to provide suitable response to changes in external business environment. The
other fact which has been discovered is that invention is the major source of innovation. It has
also been concluded from the project that an appropriate business structure is very much
essential for facilitating innovation. The other thing which ha been found is that it is the inn
ovation which can assist an organization in gaining the competitive advantage. It has also been
concluded that commercial funnel has great significance for enterprises.
It has been suggested that firm should continuously develop the new product, as this
strategy will assist them in fulfilling the demands of customers which is crucial for long term
business sustainability. Some tools have been highlighted in the report that can be utilized by
company for protecting intellectual property.