Innovation Strategies for Essence Drinks: A Business Report

Desklib provides past papers and solved assignments. This report analyzes innovation strategies for Essence Drinks.

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Innovation in a small business context

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Table of Contents
1. Introduction......................................................................................................................... 3
LO1 The context for innovation and difference between invention and innovation................3
P1 Innovation and its importance to an organization..............................................................3
P2 Role of organization vision, leadership, culture and teamwork in shaping Innovation.......4
M1 Different Sources of Innovation.........................................................................................5
LO2 Explain the different types of innovation..........................................................................6
P3 Different types of Innovation..............................................................................................6
The 4 Ps of Innovation..............................................................................................................7
Use of Innovation Funnel......................................................................................................... 8
P4 Developments in frugal innovation and examples of how it is used in organizational
context............................................................................................................................. 8
M2 Analyzing and applying innovation funnel to Essence Drinks............................................8
M3 Frugal Innovation and its role in Essence Drinks................................................................9
LO3 The process required for commercializing innovation......................................................9
P5Importance of commercial funnel and application of NPD (New product Development)....9
Application of NPD................................................................................................................. 10
P6 Innovative Business Case of Essence Drinks......................................................................10
M4 Build a detailed Innovation Business Case which includes how to measure its overall
effectiveness using appropriate techniques available to test, iterate and improve.......10
LO4 Range of methods for protecting ideas and advantages and disadvantages..................11
P7 Methods to protect ideas which the organisation can develop........................................11
M5 Evidence based evaluation of the tools...........................................................................11
5 Conclusion:..........................................................................................................................12
6. Reference:.......................................................................................................................... 13

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1. Introduction
In today’s world the pressure of an ever-changing market coupled with the existence of major
competition is turning out to be a pretty difficult scenario for all enterprises. When it comes
to handling competition, the firms have been left no other option than to be innovative, for
their product to be distinct. The factors that help one differentiate a product from the other
because of the sole existence of its uniqueness, in the product itself or its marketing technique
is known as innovation. (Hohenberg, et al. 2019)
Similar is the case of the company called Essence Drinks, that was launched by Akshay
Kumar, the uniqueness and the innovative formula of the drink managed to bring out a rapid
growth of sales, however as time went by and many other competitors entered the market, the
sales have seen a significant fall.
The following report will help put light of what innovation is and how it can help the
company move forward.
LO1 The context for innovation and difference between invention and innovation
Many people live under the wrong pretext that ‘innovation’ is another fancy word for
‘Invention’. While the two words might be very close to having the same interpretation, they
are still very much different from each other.
Basically, when a product or a process of making one is launched for the first time and is
completely new it would be referred to as an invention. (Hora, M., 2016)
Similarly, improvements that are made on an already existing product that helps attract
consumers or making some creative contribution to help market the product in a different
way, thereby with an aim to increase sales would be termed Innovation.
For example, when mobile phones were created for the first time they were an invention,
Further changes like adding new features and more facilities to this already existing mobile
phones would be rightly referred to as an Innovation. Steve Jobs made an innovation with
Apple, and thus was an innovator.
P1 Innovation and its importance to an organization

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While putting in place a new idea or method is a part of innovation, it is not the only thing
that defines it. It can be explained as the process which is made of various multiple tasks and
brain storming to find out new ways to do the old things. Thinking outside the box to come
up with improvements that can profit a company need creativity and thus creativity is the
skill that innovations run on.
In a market that is evolving at such a high pace, with technological advancements and
globalization, it is only reducing the distance between places and there by increasing the
population as well as the expectations of the consumer. A company that adopts the innovation
policy in order to adapt to changing trends in the market is likely to survive better. Coming
up with innovative ways to optimize and develop an original concept helps in setting an
organization as a different paradigm.
While it is true that if there exists no invention, there exists no chance to improve on it but
thinking of it from a company’s point of view, innovations do not need new inventions, at all
times to progress.
While Japan might not have come up with the inventions of cars and electronics, using the
right innovations on these already prevailing products has taken it a long way. Innovations
require comparatively less capital as compared to an invention and also helps with achieving
an advantage in the competitive position of the company in a market.
As Essence Drinks is a beverage brand with a competitive market, an invention would work
better in adding value to the company’s profit. At the same time because the market has
already seen that the drinks are well received before, working on innovations and additions
that could make it more attractive to the consumers will prove to help the company as well.
Working out both the aspects and then recognizing the potential that each provides before
coming to a decision will help the brand.
P2 Role of organization vision, leadership, culture and teamwork in shaping Innovation.
Organization Vision: Having a clear vision, includes knowing what is the company’s
objective and what are they trying to achieve or working towards when it comes to the future
of the company. Knowing what the company wants when it comes to innovation helps in the
way of thinking and coming up with ideas that may stand by its objectives for future
expansion and thus is very important. Being confused about what the company expects or its
vision makes the situation stressed and is of no help when it comes to innovation.

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Leadership: It is a job of the leader to encourage their employees and try their best to win
them over, every leader’s behavior sends very strong signals to employees. A happy
environment when innovations and ideas are promoted at the same time protected helps in the
over process of innovation. Building a trust with the employees and an environment where
due credit of an innovation is given to the person responsible helps people open up and be
ready to share ideas in return increasing the innovative capacity of the firm
Culture: A firm can only incorporate an innovative culture at the firm by embracing certain
norms and shifting attitudes to change the way the employees work and think. Sensitizing
employees with the idea of innovation and motivating them to think of new ways to carrying
out their everyday business plays an important role too. Having workshops, crash courses,
contests for pitching and awards for new innovations help the firm at the same time create a
great working environment where learning is given its due importance.
Team work: Coming up with a new innovation every time might become very stressful for an
employee, whereas when it comes to teams, discussions and putting forth new point of views
of various different people might spark an innovation without actually meaning to. When it
comes to innovation, brainstorming together in a team provides better results and even lets us
know of how different innovation will be perceive thanks to different perceptions already
present of the team. The quality of innovation rises and thus so do the profits.
M1 Different Sources of Innovation
Innovation as already we already know is improving an already existing product or process,
some of the sources of innovation are:
 The Unexpected: Finding out or thinking of integrations/ innovations that may be
totally unexpected helps us by providing an opportunity to innovate at the same time
create something unique. Keeping an eye on the market to see what works and does
not also helps, as failures for some can be innovations to the other. (Lefebvre, et al.
2015)
 Incongruities: It is referred to as a constant way of thinking and working. When a
person becomes too used to thinking in a certain way, thinking of another way to
carry out the same thing becomes an innovation. A good innovator is a person who
exploits these incongruities. (Arfi,et al. 2018.)

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 Process Change: One of the relatively easy source of innovation is analyzing the
processes and finding ways to improve it.
 Demographics: Demographics play a very important role when it comes to
innovations as it is very important to know the crowd and age of the people that
would be benefiting by this innovation.
Organizations can develop an environment and culture for innovation by addressing all the
points above at the same time preparing and setting up crash courses and various different
contests for pitching ideas. Innovation culture can be fostered if leaders protect the ideas of
the people and build up trust while at the same time encouraging them. One thing which is of
most importance is that people want to be recognized and rewarded for their initiatives and
hence providing due credit along with rewards can go a long way. Most of the time
employees do not share a particular idea or significant perspective because of the fear of
failing or being ridiculed at, building an environment where ideas are listened to and are
given suggestions to be made better works better than having strike them at someone’s first
try.
LO2 Explain the different types of innovation
P3 Different types of Innovation
The different types of innovations are usually classified on the basis of the firm’s objectives.
What exactly are the boundaries that are needed to be maintained when it comes to individual
types of innovations are usually determined by the organization itself, since different types of
innovations have different requirements when it comes to the innovation processes. This
report will be classifying the types namely based on the objective of the innovation. (Akgun,
et al. 2017)
Product: Every service that meets a customer’s needs, may it be through the process of
material products or abstract services are referred to as products. Innovations in this field
helps the company with increasing its profits at the same time differentiating itself from the
competitive firms in the market.
Service: This is similar to product innovations but the distinction lies in the the fact that it is
more related to the direct sale of the products to the customer. Eg: Consultancies and

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insurance management. As services are not directly sold, the companies still provide services
to its consumers. Innovation is important in this case when it comes to techniques to bring in
sale at the same time customer loyalty through the ways of processing feedback, complaints
and advice.
Organizational: This innovation is more inclined to the structure of the organization and the
process. Finding out new ways and innovations tools that measure satisfaction or the
customers and coming up with process to reduce costs when it comes to delivery etcetera are
also a part of innovation.
Social: Innovations that follow through with their role to benefit not just the organization but
also the society and has its main objective as welfare rather profits come under social
innovations. They deal with innovations related to health, education, poverty.
Environmental: Every innovation that deals with contributing to the environment and
improving it are referred to as environmental innovations
The 4 Ps of Innovation
The 4 Ps of innovation include products, paradigm, process and position.
Products: While considering to innovate the first thing that comes to mind is what can a firm
do with its product, add new products, try out new ingredients or shapes as well as colors. As
noted, Essence drinks has already seen a wide demand for their product the ‘Mango Lassi’,
The firm can try adding new smells or flavors to the Lassi to make it more universally
acceptable.
Processes: Every process in the firm may it be selling, accounting or even recruiting can
make use of innovation. These innovations are a way to improve these processes so that they
do not slow down a firm, along with making it more efficient while at the same time trying to
reduce the costs.

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Position: While most the people mistake positions to be inclined to promotions, Position in
terms of innovation is more related to a person’s perception. A firm’s position in the market
depends on the way a customer perceives it and its products. Finding innovative ways to put a
smile on a customer’s face goes a long way for a brand too.
Paradigm: This refers particularly to carrying out a change in the way a firm usually does its
job. The change in case of Essence drinks can be anything, from the packaging of the product
to adding a simple ingredient more to it. Selling the product on apps rather than internet, the
factor being, changing the way things usually work at the firm.
Use of Innovation Funnel
For proper management of NPD processes (New product development) companies rely on the
innovation funnel. The basic idea behind the innovation funnel is starting with basic product
ideas and examining them, in order to later shape them into different concepts. These are
further tested to jot down to a final product to be selected and jotted down.
The important part of an innovation funnel includes: Assessments of opportunities, ideation
on the basis of the insights procured by the company, designing a concept of taking in top
ideas and evaluating and benchmarking the target customers to be approached with the
concept. After the proper feed back that is gathered from the customers coming to a decision
based on margins whether to launch or give up on the product. (Datta, et al. 2015).
P4 Developments in frugal innovation and examples of how it is used in organizational
context
Frugal innovation as a concept urges business to limit the use of resources and make use of
constraints to turn them into practical and innovative suggestions.
It is used to give quality solutions in the fields of design and system thinking. Along with
new ways for design and development of product. Innovative business models along with
using modern technologies to deliver solutions that are low cost.
M2 Analyzing and applying innovation funnel to Essence Drinks.
The simplicity of the funnel concept is something that makes it popular and easily adaptable
across various industries and organizations.

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The first stage with Essence drinks would be for the organization to start gathering
knowledge and information by aiming to come up with and collect the maximum number of
ideas possible. The more the ideas a greater number of products to be developed.
Situating a prior strategy as to how information should be gathered is useful. The strategy
should take into account markets, university connections, partners, institutions and even
competitor growth and strategy in the market. Making a thorough check on the background
and demographics of the customer will be of great help to Essence drinks as well.
Having a clear view of the aim and vision helps to innovate as well as actualize the ideas.
The second step would be screening all the ideas generated in the first step and trying to
match it with the goals and objectives of the firm. The ones that match and are relevant to the
company’s objectives should be assessed for risk as well as returns. Testing of the selected
appropriate product or service by a survey through actual customers of the brand will give a
better idea too. (Aarikka-Stenroos, et al. 2016)
After allocating resources to the decided promising activity and positioning the company to
strategically carry out future related projects. Essence drinks should ensure that the selected
product or service are in line with objectives that were looked out for when the company
started. If it does, they should go ahead and launch the anticipated product.
While the funnel concept is easy and adopted by most firms it usually does not give a detailed
explanation as to what is required to develop or improve a new product, at the same time
discouraging creativity as new ideas are not even considered and discarded before being
tested.
Frugal Innovation does not only rely on the principle of doing more with less but also puts
forth how innovative a company can be when put under severe constraints. It basically refers
to changing the mentality of the employees thus proving to be cost efficient for the company
at the same time proving
M3 Frugal Innovation and its role in Essence Drinks.
This part of innovation refers to innovating processes that reduce the complexity as well as
the cost of the goods thus reducing the cost of production. Eradication of the non-essential
processes or features which in turn increase the durability of the product at the same time
provides low cost Goods. (Rosca, et al. 2017)
LO3 The process required for commercializing innovation

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P5Importance of commercial funnel and application of NPD (New product
Development)
A commercial funnel is basically pictorial or graphical representation of the stages that a
customer abides by while making a purchase. This concept works on the basic principle that
all customers are led by a certain stage while purchasing which are- awareness, interest,
evaluation, decision, purchase. (Rothaermel, et al. 2017)
Having this knowledge to bring in potential customers and turn them into loyal customers
with marketing and promoting your product is essential.
Application of NPD
New product development (NPD) is the entire process of getting a brand new product to enter
the market. NPD has important aspects like focusing on the design of the product along with
other considerations. NPD is basically using the opportunity and demand in the market and
transform it into a product for sale. (Yun, et al. 2017)
If Essence Drinks is to apply this strategy, the first step would be for the innovators to set up
goals and objectives for their new product, once that is done brainstorming together would be
the next on the list, with the help of a team it would have to take into account all sources of
innovations and settle down all the ideas that come forth. The process ahead is quite similar
to Innovation Funnel which is to screen and check the ideas that match the objectives the
most, followed by structuring the selected idea into a detailed concept. After finalizing on an
idea jotting down its pros and cons as well as cost and profits become the next motive which
leads to finally developing the product. Once the product is developed before releasing it in
the market it is tested in a trial and run test with a certain group of consumers and if the
response id positive it is opened to public and launched in the market. (Du, et al. 2016.)
P6 Innovative Business Case of Essence Drinks
M4 Build a detailed Innovation Business Case which includes how to measure its overall
effectiveness using appropriate techniques available to test, iterate and improve.
Essence drinks though has seen a considerable demand because of its new formula but has
not managed to stay high on it in the market due to competitors, at such time because it is a
new product but still a small company coming up with variations of a product could work

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better for the brand. As Mango healthy milk drink (Lassi) has been its product, finding
various versions such as fresh Mango yogurt, because of the ever increasing demand for
yoghurt along with a shelf-able mango mix that can be used as a jam, dressing, flavor or can
be just squirted into a glass of water or milk to make drink would help reach masses due to its
quality and capability of being a multi use product.
As Mango is the essential focus of the brand, Changing the packing to the shape or design of
fruit to grasp attention of the young kids or teenagers who are likely to buy it off a shelf
would work well. Changing the packaging to environmental friendly one will also add to the
benefits as many people prefer buying them.
As the trend of having healthy products is on a high, the brand making a low calorie formula
to tend to the needs of the fitness freaks and still not diluting the taste of the product may help
the brand.
LO4 Range of methods for protecting ideas and advantages and disadvantages
P7 Methods to protect ideas which the organisation can develop
There are essential tools that help in protections of ideas which can be :
 Patents are rights granted to prevent other parties from using your idea which can be a
method, process or activity.
 Keeping the innovations within the firm and only sharing it with trusted people in
order to avoid it being disclosed.
 Before carrying out deals or pitching an idea to a company, making sure that other
company they are dealing with is trustworthy, this can be done by doing background
checks and check up with the previous companies they did business with
 Signing non disclosure agreements in order to protect these ideas.
 Try and enter the market first. Originality of an idea and product is the leading factor
of profits and one-way great way to protect it. Most retails avoid similar products and
hence reaching the market first can help already build an audience.
While there are many advantages like, owning up to the idea, having the due credit given of
these tools, certain disadvantages like easily available information to the competitors through
the means of patents at the same time, having to waste time and money on convincing the
clientele to sign the non disclosure agreement also come with it. (Kirillova, et al. 2015)

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M5 Evidence based evaluation of the tools
It is very common to see confusion over the prospect of protecting ideas and innovations.
Some companies have lost in the battle, due not understanding basic legal knowledge.
A company in Ohio, failed to apply for patent before 12 months of selling the product in the
market and thus another company was able to easily copy the innovation and selling the same
product in the market. The lawsuit was in the favor of the other company which thus forced
the original innovator’s patent to be invalid. (Dorn, et al. 2016)
A small company in India, pitched their ideas to a MNC, without doing a background check
and found out later that company had rejected their proposal but had gone ahead and made
significant changes similar to the ones proposed by the original innovator. From further
knowledge it was found, that it was a trend for the MNC to take advantage of small
companies. (Kathuria, et al. 2017)
Thus use of the tools to make sure smooth functioning of innovations and process is essential.
5 Conclusion:
Innovations need to fulfill the economic demands and specific needs of the company, clients
and consumers to benefit a company. Along with it improving the product or services is
another important aspect. In case of Essence drinks, as we see it is necessary to do a full-
fledged study of what is trending in the dairy business and gathering all knowledge about the
competitors to device a plan would be one way to find out an innovative scheme. Building
trust worthy environments within the business at the same time making use of all tools to
protect these ideas would benefit the company and only provide with better innovations to
work with.