Innovation and Commercialization at Hewlett-Packard: A Case Study

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Unit 8: Innovation and Commercialization (RQF)
Report
HEWLETT-PACKARD

Table of Contents
Introduction...........................................................................................................................................2
LO1 Explain the context for innovation and determine the difference between invention and
innovation..............................................................................................................................................3
LO2 Explain the different types of innovation......................................................................................6
LO3 Discuss the process required to commercialise innovation............................................................9
LO4 Evaluate the range of methods for protecting ideas and understand their advantages and
disadvantages......................................................................................................................................12
Conclusion...........................................................................................................................................15
Reference.............................................................................................................................................16
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Introduction
In today’s diverse market it is seen that new and innovative products need to be properly
managed so that they can be effective in the markets. Innovation is an important aspect for
organisations because it helps them in creating better and more unique products than its
competitors. The innovation manager of an organisation needs to manage all of this so that
the product can gain awareness this resulting in profits. The 4 Ps of innovation and
commercial funnel are big steps that should be implemented to make the innovation effective.
The innovation should be protected by intellectual property rights so that none of its
competitors can copy the product.
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LO1 Explain the context for innovation and determine the difference between invention and
innovation.
P1 Explain innovation and determine its importance to organisations in comparison
with invention
The word “Innovation” can be elucidated as a change which augments the valueof the
services or products and addresses the needs of the customers. Innovation is only possible
when a significant level of improvement or contribution is made to a current process, product
or service or one which has been already invented. The term invention, on the other hand,
dictates the creation or a product or service for the very first time. Innovations are hence an
invention’s cause effect. If there had been a lack of invention, there would have been no
improvements made. Thus, it is not possible for innovation to exist without any
invention(Rarr, 2019). Innovation is pivotal to any business’s success in the current times. It
enables maximization of ROI or Return on Investment, achieves strong goals on business
growth, augments productivity and increases profitability, responds to the disrupters of
industry and rising share in market and addresses to the external challenges by incorporating
efficient technological as well as human resources.
Dyson represents as a private company located in the United Kingdom and dealing with the
design and manufacturing of heaters, vacuum cleaners, bladeless fan, hand dryers and groom
tools(YouTube, 2019). It had debuted in the year 1991 by its sole founder- James Dyson.
Dyson is today a global organization, selling products across 50 countries including Spain,
Canada, Belgium, Germany and the Netherlands. Dyson is known for its exemplary
innovation in products. According to James Dyson, Innovation represents a process which is
often littered with frustration, failures as well as backward steps. Dyson had re-defined
innovation from an invention with its vacuum Cleaner products(Dyson.com, 2019). The
company Hoover, with its founder William Henry Hoover, had first invented the vacuum
cleaner in 1908. In 1993, Dyson innovated the Vacuum cleaners with better performances
based on filtration because of its sealed air system. Also, the lifespan and durability of Dyson
are greater than Hoover. Hence, despite Hoover’s different ranges of Vacuum Cleaners,
Dyson had beaten the former brand with innovative customer services, light weight,
impeccable quality and energy efficiency(DYSON APPLIANCES LTD v. HOOVER LTD
(NO. 2), 2001). Thus, taking inspirations from its very own history, Dyson should be able to
innovate with new products to stand out from the rest of the competitors in the market place.
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P2 Explain how organisational vision, leadership, culture and teamwork can shape
innovation and commercialisation
Organizational Vision: The organization must envision efficient engineering which can
render high performance machines as well as technology. It must aim to augment efficient
power usage, provide light-weight products yet demonstrate twice the efficiency than the
competitors-products (Dyson.com, 2019). It should ensure as well as maintain cost-effective,
integrated and sustainable products which can address the user needs and support the growth
of the consumer products
Leadership: Dyson must believe in leadership which enables the creation of a collective
learning environment(Dyson.com, 2019).Leaders should be regarded learners and ones that
can create environments which are participatory, inclusive, conducive to well-being and
service oriented.
Teamwork: Dyson should support 8 competencies for great team work. This includes self-
awareness and development, reasoning and learning, communication, group dynamics,
strategic planning, civic responsibility, interpersonal interaction and personal
behaviour(Popovych et al., 2015).
Culture: Dyson must create a culture which believes in addressing skill gaps. The cultural
environment should believe in engineers to be the problem solvers of this world. Hence, in
order to address the potential challenges of the 21st century like air pollution, engineers are
necessary(YouTube, 2019). Dyson should aim to create a culture which can give inspiration
to the next generation of ambitious engineers. It must ensure materials, money as well as the
requisite mentorship which can train them to take problems at hand and address them.
M1 Analyse different sources of innovation, and how the organisation can foster and
develop an environment and culture of innovation
The different sources of innovation include as below:
Knowledge: Knowledge can be defined as the understanding which is brought by an
individual for bearing and putting in creative efforts. Dyson must be able to continuously
invest in more sound and meaningful research and development to produce highly innovative
product lines.
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Creative Thinking: It pertains to the manner in which how problems are approached by
people as well as relies on the style of personality and working/ thinking style. Dyson should
hire an efficient team of empowered and highly decisive critical thinkers. The experts should
have the ability to critically think for solving a particular problem or improve a certain
product existing in the market.
Motivation: It is regarded as the most elemental aspect of the production of creative outputs.
Dyson should continuously motivate its employees and experts to be empowered,
independent and innovative for brainstorming and creating new product and service ideas for
innovation.
How innovation is developed, embedded and measured
In the year 2017, Dyson had been voted by the public of Britain as the country’s most popular
brand. The organization had beaten all its rivals on the basis of factors like innovation,
products, performance and leadership.
The below section shall reveal the way innovation is developed, embedded and measured in
the organization:
a. Challenging the status quo: Hoover- Dyson’s main competitor had been a market
dominator in vacuum cleaning. However, Dyson endeavoured to beat Hoover on the
same playground by bringing the end era of the disposable cleaner bags. The TV
advertising slogan of Dyson which ran as a goodbye to bags became an instant hit and
helped the brand to augment its current household status(DYSON APPLIANCES
LTD v. HOOVER LTD (NO. 2), 2001).
b. Determination and consistency: It took nearly 15 years for James Dyson with 5127
prototypes for getting the perfect vacuum cleaner that finally launched in 1993 into
the market. It is the sheer value of long-term vision and the value of determination.
Dyson continues to innovate its services and products with new problems, new
capabilities as well as new materials to solve. Patience with fusing ambition is
elemental for business success. Dyson fosters an environment wherein even failure is
embraced(Dyson.com, 2019).
c. Continuous Innovation: Even after having a substantial level of success with the
erstwhile vacuum cleaner, Dyson kept on motivating himself for designing new
products. In the year 2000, he introduced a washing machine. However, the product
was a huge failure. Despite the consequences, Dyson again introduced a new product
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called the Airblade Hand Drier in 2006. The product became an instant success and
was known to have more energy efficiency in comparison to the other market
competitors. The same kind of technology was introduced in the year 2016 by Dyson
into its brand new segment of hair-dryers.
d. Trusting Instincts: Dyson hade refrained from having its brand turned into a publicly
listed company. He remained persistent to stay as a private company as that shall give
him the liberty for augmenting research based investments in every 2 years(Dyson
and Carrigan, 2009).
e. Smart Recruitment: Dyson believes in looking after candidates who have a genuine
attitude towards problem solving. The company hires a diverse range of different skill
sets, which shall make the business to be more adaptable and look beyond the
conventional criterions.
LO2 Explain the different types of innovation
P3 Explain the 4Ps of innovation and explain the use of the innovation funnel to
examine and shape innovative ideas
The 4Ps or also denoted as the innovation mix enables discovering in what way the process of
innovation may improve as well as bring into its business. The first P paradigm enables using
innovation for improving the way of business(Veza.biz, 2019). The change may be radical,
however, it is important to have it in mind that not all the changes are exactly positive. The
second P is Product which dictates what is offered by the company. It accompanies asking
oneself on how a service or a product can be improved. It helps to understand how an
available product can be made more attractive. The third P or Process helps to understand the
process of preparation of the service or product. The fourth P position enables changing the
context wherein the services or products are framed. It helps to understand how it is
communicated, how people perceive it including the employees, customers and public.
In the process of new product development, an innovation funnel represents a common funnel
which can be utilized by organizations for evaluating the ideas as well as conceptualizing
products. In an innovation funnel, the main elements, including as below:
a. Opportunity assessment: The company here evaluates through the data on customer
knowledge, market and information resources the type of opportunity for developing a
new product
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b. Insights- based ideation: Depending on the type of opportunity, the one which shall fit
with the strategy of the company is important to invest time and money on. This
requires a substantial market study indulgence for drawing key customer insights.
c. Conceptualization: The team in this stage creates designs on the pivotal concepts
underlining in those ideas. This includes product features and configurations.
d. Benchmarking and evaluation: It includes processes like user testing for getting user
feedback
e. Go/ No go: Post the completion of testing, it is imperative to gather feedback on
iterations. Analysis helps to understand the concepts using the best chances of having
success. There must be decisions taken whether or not to go with the product.
f. Launch: Accordingly, it is imperative to launch the product which has been accepted
by the user audience.
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M2 Analyse the innovation funnel and apply this concept
Dyson can make use of the Innovation Funnel, in order to find out the new area of product
development, where it can focus and innovate. It can make use of insights from Big Data,
social media and web analytics and information of competitors like Electrolux and Hoover to
understand a niche yet profitable area for product development(YouTube, 2019). By finding a
niche area, Dyson can develop a newly engineered product by adhering to its principles of
high energy efficiency, light weight, easeful, high quality, customer centric and durability to
create its own line or products. One such area, where Dyson can focus on includes creating
hair straighteners and hair curlers. Dyson has already developed its exclusive line of hair
dryer products which has made the company achieve rampant success. For product
configurations, Dyson can research on the latest technology tools, practices and systems
which it can use for manufacturing the product(Dyson and Carrigan, 2009). Upon production,
the end product can be used for acceptance testing, user testing integration testing, unit
testing to check all the units, functions and integrations of the product is working properly. In
this way, Dyson can make use of Innovation Funnel to decide whether or not to deploy the
product and make it live in the market.
P4 Explain Developments in frugal innovation and provide examples of how it is used in
an organisational context.
Frugal Innovation reveals and unleashes new business models, re-designs products as well as
re-configures value chains for serving the users who confront constraints of affordability, in a
sustainable and scalable manner (Weyrauch and Herstatt, 2016). It includes either
overcoming resource constraints or tapping the institutional voids for creating highly
inclusive markets. In simple words, the concept of Frugal Innovation ensures highly
functional solutions using lesser resources to those having limited or restricted means.
In Frugal Innovation, companies should have their costs minimalized for reaching more
customers and make use of thinner margins of profit for gaining volume.
Example: 1. Tata Motors has introduced Tata Nano, which is a car costing $2200. The most
conspicuous advantage of the car is ofcourse its pocket friendly price tag. Owing to the small
size, it is also easier to drive a Nano car in city traffic. The car has also good fuel efficiency.
The car is highly affordable for the lower middle class and lower-class citizens in
India(Weyrauch and Herstatt, 2016).
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2. Godrej & Boyce had developed a fridge costing only $70 called “Little cool”. The fridge
operates using batteries. In India, the penetration of refrigerator is only 18% and hence there
is a substantial market to tap on. Hence a cost-efficient product is highly in demand due to
the often-deprived poor population in a country like India.
Thus, using Frugal Innovations, the above organizations have been able to reach the untapped
market with cost efficient products.
M3 Evaluate the role of frugal innovation in Dyson
Dyson uses a premium pricing strategy to sell its products. The products of Dyson are in-fact
twice a Hoover’s Vacuum cleaner’s price. Customers have a substantial price to pay for
availing the Dyson Cientic Science technology. With its vacuum cleaners ranged within £ 99
– £ 340, Dyson is not likely to reach the segment of the lower middle class and middle-class
families outside the UK borders(DYSON APPLIANCES LTD v. HOOVER LTD (NO. 2),
2001). Thus, in the current times, Dyson has an extremely a poor role to play, in contributing
to the Frugal Innovation strategy.
Therefore, it is highly important for Dyson to achieve a Frugal Innovation strategy to reach a
wider audience in the global market spectrum. In order to achieve Frugal Innovation, Dyson
must make use of open Innovations. By inviting innovative ideas from people outside the
organization, Dyson can seek to address all the fundamental principles defining Frugal
Innovation- simple, lean, social(Dyson and Carrigan, 2009). Lean will help the company for
achieving maximum efficiency, simplicity shall ensure functionalities which can augment
user value and social which can help to the seller the product to greater communities ie the
emerging economies like India and China. Association with Supporters of Frugal Innovation
like Challenge Prize Centre and Nesta shall help Dyson to welcome open innovation and
understand the benefits of Frugal Innovation for its company. (Srivastava & Chandra, 2012)
LO3 Discuss the process required to commercialise innovation
P5 Explain the importance of the commercial funnel and the application of new product
development (NPD) processing for commercialisation of innovation.
An Innovation’s commercialization is elemental to the success of entrepreneurship. It
represents an amalgamation of different activities of entrepreneurship. It entails constructing
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research from diverse fields of strategy, management, economics, entrepreneurship as well as
marketing.
Also denoted as purchase funnel, a commercial funnel enables the demonstration of a
customer’s journey or buying a product or a service. There include 5 different steps under a
commercial funnel. These comprise of opinion, awareness, consideration, preference as well
as purchase. A commercial funnel will make sure to bring in more and more customers and
make them loyal toward the brand. It will also show what type of customers are buying the
product so that later on the organisation can focus on them. The commercial funnel can also
show what change should be made in the marketing of the products so that more people can
be more aware of it. New and innovative products are the ones which mostly benefit from the
commercial funnel as they are the ones which show whether the customer prefers the
products or does not and what can be one to increase its awareness. The funnel will help in
increasing the brands awareness as well as making the organisation profits.
New product development is also important for commercialisation as it needs to be seen in
which market and what customers will the product target. In the stages of NPD, there is a
stage in which a market strategy is made from which the product is developed. In the last
stage of the new product development is commercialisation used. The commercial funnel
comes into play here as the product is new and it is not known on whether it will be a
success. The commercial funnel will measure the performance of the innovative product and
then make changes in its marketing strategy so that it can grow in value and awareness.
P6 Build an innovation business case for the organisation, including ways to access
funding.
Owing to the product’s infiltration, innovativeness as well as durability, Dyson has been able
to capture a substantial foothold in this market. However, in the 1st quarter of 2019, there
have been reports on the removal of certain vacuum models from a series of recommended
stick vacuums due to reliability problems(Fast Company, 2019). There has been data
retrieved from recent surveys on problems and breaks of the stick vacuums at a substantial
rate. Consumers have complained that the Vacuum break has stopped and broken. stick
vacuums have been often found to develop problems or even break within the coming 5
years, in comparison to other stick vacuums. (Shatokha, 2014)
To address, this problem, Dyson must innovate and design a new kind of vacuum which can
ensure:
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a. A long-living battery
b. Greater efficiency as well as high speed automation (Dyson.com, 2019)
c. Can be integrated with other household technology systems
d. Efficient and high-quality brushes
e. High level of suction
f. Energy efficient power switches
Concept: Dyson can make use of emerging technologies like Artificial Intelligence as well as
the Internet of Things to drive its innovation. The robotic vacuum cleaner can make use of its
sensors for seeing as well as determining any dirt particles on the floor to begin its
vacuuming adventure. (Frishammar, Lichtenthaler & Rundquist, 2012)
Development: In order to develop and innovate a new solution, Dyson can choose to
innovate Robotic Vacuum Cleaner by enhancing with additional functional features from
its stick vacuum cleaner. Considering that its Dyson 360 Eye is a rechargeable machine
without cords with HEPA filtration(Dyson.com, 2019), it can feature a box for self -
cleaning garbage for installation on a charging dock’s top. A function for self-cleaning
integrated with UV light may be applied as an additional function for controlling odour
and killing microbes. As more people adore the concept of bagless, it is still good to have
a technique of dumping develop which can get rid of the poisonous cloud. The use of cost
-effective products obtained from low cost suppliers and highly economic countries can
help to reduce the costs of the product prices.
In order to develop an innovation business case, the company should be able to have its
revenue generated
Estimated total expenses of the company for selling Robotic Vacuum Cleaner
Type of expenses Cost
Expenses of Manufacturing $500
Expenses of Raw material $600
Expenses of Labour $900
Expenses of Management $300
Expenses of Marketing $200
Total $2950
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