Essence Drinks: Innovation and Commercialization Business Report

This report examines the innovation and commercialization strategies of Essence Drinks, a UK-based company offering Mango Lassi, which is facing increased competition. The report analyzes the differences between innovation and invention, highlighting the importance of innovation for Essence Drinks' unique selling proposition and market response. It explores how culture, leadership, teamwork, and vision shape innovation and commercialization. The report delves into the 4Ps of innovation (product, process, position, paradigm) and utilizes the innovation funnel to analyze and shape innovative ideas, specifically focusing on the introduction of chocolate and strawberry flavored lassi served in clay mugs (Khullad). It also covers frugal innovation, the commercial funnel, new product development, and the creation of an innovative business case study that includes access to funding. Finally, the report evaluates various tools for developing, retaining, and protecting intellectual property within the context of Essence Drinks' business model and market strategy.

Innovation and
commercialisation

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Explanation of innovation along with its importance to respective company in comparison
with invention ........................................................................................................................3
P2 Explanation of how culture, leadership, teamwork and vision can shape innovation &
commercialisation...................................................................................................................5
TASK 2............................................................................................................................................6
P3 4Ps of innovation & use of innovation funnel to analyse and shape innovative ideas.....6
P4 Explanation of Frugal innovation along with examples in organisational context ..........9
TASK 3..........................................................................................................................................10
P5 Describe importance of commercial funnel and its applications for new product
development within commercialisation................................................................................10
P6 Create innovative business case study which encompasses of access funding...............11
TASK 4..........................................................................................................................................12
P7. Evaluation of various tools to develop, retain and protect intellectual property............12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Innovation is termed as a procedure by which a company seeks to develop alterations in
the existing products and services. In addition to this, it is also defined as a way to bring changes
and make process faster as well as easier. Bringing innovation assist a company to increase
performance level, raise sales and capture large market share in an effective manner. On the
other hand, commercialisation is consider as a last stage where ideas are executed into product
and service at marketplace (Colombo, 2017). Moreover, it is a process by which goods and
service is bringing at marketplace with an aim to attract more people towards brand. The present
report is based Essence Drink which was established by Akshay Kumar before two year ago in
United Kingdom. The company offer Mango Lassi which was very unique in the market of UK
but at present, there are lot of competitors of Essence Drinks prevailing at marketplace. In order
to remain in competition and to offer something unique in market, the company is bringing
innovation in its offering. Essence Drinks is bringing chocolate and strawberry flavoured lassi
that will be served or packaging in Clay Mugs (Khullad). This is a unique concept in the market
of UK and attract large number of people towards it. The report will cover concept of innovation
and invention along with their importance and difference. In addition to this, there is discussion
about frugal innovation, commercial funnel, new product development process, 4Ps of
innovation in relation with Essence Drinks. Moreover. An innovation business case is developed
and various intellectual property is consider that help in retain,develop and protect innovation in
the market.

TASK 1
P1 Explanation of innovation along with its importance to respective company in comparison
with invention
Innovation: It is basically an approach of bringing changes within the existing products
as well ass service in the form of an innovation (Gachie and Govender, 2017). The main reason
of bringing innovation in the offerings is to offer something unique in market and remain in
competition in an effective manner. Innovation is also consider as an effective procedure
whereby unique thinking, creativity and innovation of staff members plays vital role.
Invention: It is basically bringing totally a new product as well as service in market with
an aim to increase customer base level and disrupt marketplace. It is determine that
implementing of such ideas plays vital role in order to convert invention into the reality. It is
important for an entity to conduct market research before bringing any new invention in market
as it increases the chance of acceptance and raise sales in an appropriate manner.
Difference among innovation & invention
Invention Innovation
The main objective of invention is to
introduce something creative, new for the
customers prevailing at marketplace.
The main aim of innovation is to enhance value
of existing product by adding new features and
attributes in a proper manner.
It is taken up with single process and means
a new product is developed.
It is concerned with combination of various
product as well as process and means to making
alterations in the present goods and services.
It is analysed that an invention is controlled
by R & D department of a company.
In Innovation, the activities of execution of
bringing changes is spread in overall departments
of company.
Importance of innovation for Essence Drinks
Unique Selling Point (USP): One of the most important factor that assist Essence Drinks
is development of USP that attracts large number of people towards brand and leads to raise in
sales and profitability as well. Providing of new flavoured Lassi that is Chocolate and strawberry

in Clay mugs is unique at market of UK (Kelly and Kim, 2018). With the help of this, Essence
Drinks can gain large market share and strengthen its position at marketplace.
Response to competition and trends: In this competitive world, it is important for an
organisation to analyse trends and then offer new product in market so that it can gain success
and growth at marketplace. Bringing of innovation in Lassi assist Essence Drinks to respond to
its rivals prevailing at marketplace. Along with this, it help company to position itself positively
in the market.
Sources of Innovation
According to Peter Drucker, there are mainly seven origins of an innovation and these are
change in market trends, change in opinions, demographics, increase in expectations, market
structure change, change in technology and Incongruity as well.
P2 Explanation of how culture, leadership, teamwork and vision can shape innovation &
commercialisation
Innovation is an indivisible part of an organisation that assist companies to achieve
desired goals and compete with rivals in an appropriate manner. There are various factors which
can shape innovation & commercialisation and is given below:
Vision:
It is a long-term goal of an organisation with that the characteristics and behavioural
pattern of the staff members is aligned. It is determine that vision plays vital role in introducing
innovation in the organisation. In context to this, it is stated that innovation is included in the
vision of Essence Drinks (Min, Vonortas and Kim, 2019). In addition to this, it motivates

employees of company to come up with new ideas as well as innovation that can disrupt
marketplace.
Leadership:
It is defined as support and guidance to employees by which company can attain goals
and objectives in an appropriate manner. In context to this, it is determine that leaders of Essence
Drinks focusing on aligning behavioural pattern of staff members so that they can bring
innovation of goods and services in a systematic and proper manner.
Culture:
Culture involves traditions, customs, beliefs, ideologies, values and norms of a company.
An organisation whereby culture is aligned with acquisition of innovation comes up with
innovative goods as well as services at regular time intervals (Novikov, 2018). In regard to this,
it is identified that culture of Essence Drinks is assist in bringing of innovation in the company
that leads to attainment of top position and increase of market share in an effective manner.
Teamwork:
It is defined as group of individuals who are working together in order to meet with the
targets and attainment of organisational objective on time period. In this context, it is determine
that teamwork in Essence Drinks is performing in such manner which can facilitate of some
innovation in the organisation. In addition to this, it is analysed that efforts of all the group
members together will help in bringing innovation in the market and also help Essence Drinks to
gain high market share and profits as well.
TASK 2
P3 4Ps of innovation & use of innovation funnel to analyse and shape innovative ideas
4 Ps of innovation:
Innovation is a procedure of developing new thoughts and ideas in the existing goods of a
company. It is analysed that 4P's of innovation assist an entity to gain insight about success of
innovation after launching in the market. In order to estimate this, Akshay Kumar make use of
4Ps of innovation in order to make improvements in sales as well as profitability level of Essence
Drinks. The four P's of innovation is given below in relation to respective company:
Product innovation: Nowadays, it is significant for an entity to make alterations in its
offerings so that it can provide something unique and new in market which develop value for

customers. Along with this, it is important to offer quality to customers as it help in gaining trust
of people and increase number of loyal customers of company (Purchase, Kum and Olaru, 2017).
With reference to Essence Drinks, it s adding new flavoured chocolate and Strawberry in Lassi
that is served in Clay mugs. It is a tasty and a healthy Lassi that will attract more number of
people in United Kingdom that has a positive influence on sales of Essence Drinks.
It is summarised from the above discussion that innovation is the key to success of an
organisation. It enables a company to introduce certain alterations within the existent products
and services in order to produce something new holding value in the market place. This
innovation is introduced in the global marketplace with the help of a process referred to as
commercialisation. In addition to this, it has been duly identified that the organisation makes use
of IP tools like patents and copyrights to protect the innovation in an effective manner.
Illustration 1: 4p's of innovation
(Source: Innovation space 4p's , 2015)
Process – It is determine that every company used a process which leads towards
attaining of high position at marketplace. In relation with Essence Drinks, it offers healthy Lassi
in UK and follow a process which help in improving quality and declining cost as well. Essence
Drinks will provide flavoured Lassi to people in order to attract and satisfy them in a proper
manner.

Position- It is essential for company to position its product and service positively in the
mind set of customers. Akshay Kumar identify the market condition and market trends and after
it launch flavoured Lassi in Clay mugs. It will assist in gaining insight about estimation of people
like to consume Lassi in UK.
Paradigm- It is basically a planned procedure of a company in order to deal with
changes that will occur at the time of execution of innovation activities (Rainville, 2017). By the
assistance of this, Essence Drinks can deal with situations and bring innovation in a systematic
and appropriate manner at marketplace.
Innovation funnel
This tool is mainly used by company to define the stages that has to be take place at the
time of development of a process & product as well. In addition to this, it is also known as funnel
management process which is adopted for creating a innovative & a realistic action plan.
Innovation funnel includes three steps that is given below in relation to Essence Drinks:
 Investigation –It is the first step of this tool and in this organisation gather many possible
ideas and ways for bringing innovation. It is analysed that high number of ideas helps an
organisation to attain better solution and offer unique in market. With reference to
Essence Drinks, it is stated that it has a research and development team who identify and
conduct in-depth study of market conditions, competitors action, market trends that will
assist Akshay Kumar to properly bring innovation at marketplace (Stojčić, Hashi and
Orlić, 2018).
 Development – In this stage, the ideas that are develop at investigation stage is
scrutinised in relation with organisational vision ad goals. The idea which is matching is
selected for the further procedure. If it is taking about Essence Drinks, it brings chocolate
and Strawberry Lassi in Clay Mugs which assist in gaining eyes of people towards brand
and leads to raise in sales and profitability of respective company.

(Source: Innovation funnel,2016)
 Product Delivery – It is the final stage wherein the innovative product is launched in the
market in an effective manner. In context to Essence Drinks, it is going to bring Chocolate and
Strawberry Flavoured Lassi in market and for this, it is essential for Akshay Kumar to make use
of effective tools that will help in attracting people towards new offerings and increase its sales
in an effective manner.
P4 Explanation of Frugal innovation along with examples in organisational context
Frugal innovation is consider as a process of declining cost of processing as well as level
of complexities in an appropriate manner. This approach is mainly adopt to remove unnecessary
features within the products and services which has positive impact on performance as well as
productivity of company. Moreover, Frugal innovation is an important tool that assist in
delivering more value to customers along with good quality.
One of the example of frugal innovation is General Electrics VSCAN, in the early 1980s
GE was a leading provider of traditional ultrasound machines in all over the world. But after
entering in the Chinese market, it demand is decline due to high cosy. For this, GE replace
expensive hardware of traditional ultrasound machines with cheaper software that helped
General Electrics to sustain in Chinese market. There are different principles of frugal innovation
and is describe below:
Illustration 2: Innovation funnel

Principle 1: Engage and iterate: This principle states that maintaining good relationship
with customers and retain them for longer time s take place when there is fulfilment of
requirements of customer.
Principle 2: Flexibility: In order to retain in market and cope up with the changes, it is
essential for company to remain flexible. For instance, BMW adopt using of light weighting
approach for its car which include aluminium instead of steel.
Principle 3: Development of sustainable solutions: This principle mainly states that
changes in the environment has high influence on performance of company and for this, it is
essential to offer goods as well as services which is sustainable and did not impact on the
environment (Tura, Hannola and Pynnönen, 2017). For example, Apple produced MacBook in
year 2018 which is 100% recycle aluminium.
Principle 4: shape customer behaviour: It is analysed that raise in awareness assist in
shaping positive customer behaviour. One such example is Care4Today application that help
patients to stay with time table on their medication.
Principle 5: Make innovative trends: This principle signifies hyper collaboration with
partners, competitors, suppliers & government as well. For instance, General Electrics made
partnership with a crowdsourcing platform named as Quirky for developing products like Aros
air-conditioner.
Another example of frugal innovation is TATA Nano care which is one of the world,s
cheapest car. It is an economical car with no frills, frugal engine and easy shift mode.
TASK 3
P5 Describe importance of commercial funnel and its applications for new product development
within commercialisation.
Commercial funnel can be referred to as the purchase process that an organisation makes
the customers undergo in order to lead them to make a purchase. It is a 4 step process which is
applied by organisation to gain comprehensive knowledge of the way sales is made. The steps
are named awareness, interest, decision and action. Essence Drinks applies this process in order
to augment its revenues as well as profits. The entity is coming up with chocolate and strawberry
flavoured lassi in earthen pots.

To develop the innovative product, Essence Drinks will apply new product development
process which is briefly explained as follows:-
Idea generation: In this stage, a number of ideas are generated with the help of
conducting brainstorming sessions. Essence Drinks in this step will come up with a number of
ideas related to the beverages that can be launched.
Idea Screening: In this stage, the various alternatives for ideas are screened and thus
only the feasible ones are taken into consideration. Essence Drink will take into account a
number of factors while evaluating the alternatives.
Testing Concepts: In this, the needs and demands of customers are taken into account. In
accordance with this, the testing of ideas is done in order to arrive at the most suitable
alternatives. Hereby, Essence Drinks reached at the conclusion that it will launch strawberry and
chocolate flavoured lassi which will be launched in the earthen pots.
Analyse needs of product development: In this stage, the need behind new product
development is identified by the organisation. Hereby, Essence Drinks will recognise the need
for developing strawberry and chocolate flavoured lassi.
Commercialization: In the last step of new product development, the entity launches the
product to the customers. Thus, Essence Drinks will hereby introduce strawberry and chocolate
flavoured lassi in earthen pots in order to capture the attention of public and augment the sales.
P6 Create innovative business case study which encompasses of access funding.
Innovation business case can be referred to as the documentation of the manner in which
innovation will be brought about by the company. Essence Drinks is coming up with strawberry
and chocolate flavoured lassi in earthen pots for which the innovation business case is presented
as follows:-
Executive summary: Essence Drinks is coming up with new flavours of lassi in order to
capture the attention of people towards it. The product that is being launched is strawberry and
chocolate flavoured lassi. These will be served in earthen pots.
Mission statement: “To provide superior quality beverages to customers to build long
term relations with them.”
Innovation: A new flavour is introduced by Essence Drinks, which is, strawberry and
chocolate flavoured lassi. This is introduced looking upon the needs and demands of customers.

Resources: The organisation will require a number of resources to come up with this
innovation and launch it in the market place among people. These resources are acknowledged to
be financial resource, human resource, physical resource and technological resource. These will
provide assistance to the company in effectively developing the new flavoured lassi and
providing it within earthen pots.
Cost and benefit analysis: Essence Drinks is carrying out cost and benefit analysis for
the new product. In this relation, the organisation has estimated that the benefits arising out of
the new product will exceed the cost incurred to introduce this product at market.
Financial projection: The innovation will be brought about by Essence Drink for which
it will need around £18000.
Sources of Funding: There are various sources for funding that are available to an
organisation. Essence Drinks will require funds equivalent to £18000 for introducing the new
product at market place. Thus, it is taking into the most important sources as follows:-
 Bank loan: This is a secured source of finance whereby the financial institution provides
funds to the organisation in return of a guarantee. Furthermore, interest is charged on the
amount borrowed which has to be paid along with the instalments. However, excessive
documentation is required for this funding source.
 From Family and peers: Hereby, an organisation procures funds from relatives,
acquaintance, family and friends. In this case, only the actual amount has to be repaid
without any kind of interest or extra payment.
Essence Drinks will take bank loan for launching the new product in market place. This
source of funding is opted for looking upon the security involved in it.
TASK 4
P7. Evaluation of various tools to develop, retain and protect intellectual property
Patents
It is basically a set of exclusive rights which are permitted by government to an inventor
for the specific period of time. It help in preserving innovation take place by an organisation by
the other company in market.