Innovation and Commercialisation: SME Analysis and Business Strategy

This project examines the concepts of innovation and commercialization, crucial for product development and business growth. It explores the importance of innovation for employees, organizational vision, leadership, culture, and teamwork, using case studies of Apple Inc. and the Virgin Group as examples. The project delves into the 4Ps of innovation, the innovation funnel, and frugal innovation, along with the application of New Product Development and the commercial funnel. It also includes an innovation business case study for Askinosie Chocolate, a U.S.-based SME, and discusses tools for knowledge and intellectual property protection. The report is structured into four tasks, addressing learning outcomes related to innovation processes, leadership, and business strategy.

INNOVATION AND
COMMERCIALISATION
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Contents
Introduction.....................................................................................................................3
Task 1..............................................................................................................................3
P1.Innovation and its importance to employees in organisation.................................3
P2. Organizational vision, leadership, culture and teamwork can shape innovation
and commercialisation.................................................................................................6
Task 2..............................................................................................................................7
P3. 4Ps of innovation and the use of the innovation funnel to examine and shape
innovative ideas...........................................................................................................7
P4. Develop frugal innovation and how to use in organisation...................................9
TASK3...........................................................................................................................11
P5. Importance of the commercial funnel and the application of New Product
Development .............................................................................................................11
P6. Innovation Business Case for chosen organization.............................................11
TASK 4..........................................................................................................................15
P7. Different tools to develop, retain and protect knowledge and intellectual
property .....................................................................................................................15
CONCLUSION.............................................................................................................16
References.....................................................................................................................16
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Introduction
Innovation has become a necessity for product development and enhancement
from time to time. The process of innovation is central to the prosperity and growth
which can have different ways and methods. The commercialization refers to
providing a platform for the product to make it reachable and knowledgeable to the
customers and mass. At present to organizations are developing their long-term
strategies based on innovation and creativity which is helping the companies to reach
new targets and success (Soard, 2016). In order to make the innovation practices
successful and implementation,the practice should begin for the internal resources i.e.
employees or workforce who serve to be an important asset to the organization. The
diverse employee workforce with different skills, background, experiences, and
knowledge can be used in different situations to identify and use the prospective
opportunity to convert their gap into an advantage(Leitner, 2013). In that course, the
company needs to be supportive enough to encourage, motivate and develop a
structure which can help the employees to share and exchange their ideas, thoughts,
and views over any particulate issues which can influence the positive outcome,
innovation techniques or process that can help in improving the product in the best
possible way. The current assignment deals with the above subject i.e. innovation and
commercialization which is based on two case studies on Apple Inc and Virgin group
as an example of innovation and commercialization of products and services. The
project discusses various understanding and concepts of Innovation process used by
the organization with respect to an SME named Askinosie Chocolate, which is a
chocolate producing firm based in the US. The report is divided into four parts, which
has been answered in accordance to meet the respective learning outcome.
Task 1
P1.Innovation and its importance to employees in organisation.
The concept of innovation is a new method, idea or a device that is coupled
with commercialization. It puts new ideas and knowledge to a productive use in
commercialising and creating a new service, process or product type, that is often
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being associated with invention. Innovation also gives rises to the development of
improved products, services and processes. For example, the innovation of iPod by
Apple is an innovative version of MP3 players in which would record a large number
of songs. But this device is a newly designed product which requires smallest physical
space for storage of songs. The term has been defined by recognised body of OCED
stating “Innovation goes far beyond R&D. It goes far beyond the confines of
research labs to suppliers, consumer and users everywhere- in non-profit, profit and
government business across institutions and across sectors”.
The Askinosie Chocolate is one of the top SMEs situated in the US that
produces a variety of chocolates such as dark chocolates, milk chocolates, chocolate
beverages, baking chocolate and cocoa nibs. The company was founded in the year
2005 and is based in the city of Missouri. The company uses extremely transparent
business practices which provide a lesson to the budding entrepreneurs on how to trade
with farmers and pay fair trade market prices for their raw materials(SHAWN
ASKINOSIE, 2016).
The company collects cocoa beans from four countries and prepares a variety
of chocolate recipes in 70 steps. This business model of the company considers the
importance of innovation by preparing different varieties of chocolate recipes in just
70 steps. On the other hand, invention is the derivation of new products, services of
the process from new knowledge and idea. It is the application of the idea in creating
something new. The company through the trade practices with the farmers is bringing
change to the lives of communities surrounding the cocoa farms which are helping the
people there. This can be an invention in new service provision facilitating fair trade
practices to the cocoa farmers. The functionality of the company depends on
management which comprises of total 17 people including the founder of the company
“Shawn Askinosie”.
The company tries to bring balance in their quality and craft for making
chocolate for their customers. It is their first priority to provide best tasting chocolate
to the world by combining efforts of people working in the production of chocolates.
The employees and staffs involved in the making of chocolates are coordinating with
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each other in production, operations and shipping of products to different locations
like Philippines, Tanzania, Honduras,Ecuador (Chocolate University, 2016). The
company is also a wholesale dealer which gives the company an opportunity to
provide assistance and services for gift sets, boutique roasted cocoa nibs, etc for
retailing in cities. Therefore, the company with a small group of 17 people, who are
passionate about making different recipes of chocolate and cocoa nibs, are trying to
spread the culture and taste of the chocolate everywhere (Clarke, Evald, and
Munksgaard, 2012).
The concept of innovation in the products and services drives the productivity
and profitability of the organization brands. It is important for an organisation in
growing and development of a business. According to an Australian Bureau of
Statistics data, it is found that organisation who works on the innovation and creativity
in their products and services are more likely to generate maximum profit in the
business. They tend to generate more job opportunities’ for people who are coming up
with new skills, ideas and concepts coming from real life instances. In the case of
Apple, Steve jobs brought an innovation of sleek looking device called iPod, which
holds a capability of storing more than 1000 songs in a small limited chip size space.
This example of innovation in the world of electronics industry gave birth to new
devices and their uses in the market(Treuer and McMurray, 2012). As a result, it was
seen that Apple Inc, had earned a revenue share of 56% during that times. It has sold
approx 1.4 million iPod in the year 2001. From these instances, it can be drawn that
being CEO of the company, it is important to involve the employees of the
organization in decisions making and encourage them to look at new ways to get
things done in differently. The employees of the organization should also try to
experiment with alternative methods to accomplish their task in a more efficient way.
Thus, the innovation in methods and techniques applied to work saves time and money
of the business, brings agility, increases the customer satisfaction and so on(Natarajan
and Kanmony, 2015). However, innovation and invention are two different concepts or
terms.
The term invention is defined as the application of knowledge in creating
something new, it may be services, artefacts, process or piece of equipment. Inventions
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are useful and provide humans to leave their life in better and different way. For
example, the steam engine developed by James Watt was an invention which changes
the outlook of transportation in the modern era. However there is a slight difference
between invention and innovation, invention arises when there is the creation of a
product or a process for the first time, whereas innovation is the improvement or
enhancement taking place in the existing product, process or services. Steve’s jobs
iPod was an example of innovation, not invention. While invention is an original idea
developed from working in a theory, innovation is the practical implementation of new
idea. For invention scientific skills are important but in case of innovation, it is the
marketing, strategic and technical skills that are important.
P2. Organizational vision, leadership, culture and teamwork can shape
innovation and commercialisation
As the CEO of Askinosie, the practice of leadership,teamwork,vision, etc can
help the team of the workforce to shape their commercialization and innovation
section of the organisation by involving the employees of the company in participating
in the discussion of mission and vision of the firm (Bayt.com, 2015).
The term leadership means the art of getting things done effectively with the
association of subordinates. The leaders are the one who helps themselves and others
to do the tough work and activities. They build and set direction, vision and motivation
among their team members to create something new. It's all about mapping out the
way where ones need to go to win as a group. There are certain types of leadership
that influence the individuals in different ways such as inspirational and transactional.
The inspirational leadership is the reflection of goals and aspirations of the leader
towards any projects. It is not about “you”, it about “them”. An inspirational leader is
good strategist and clear thinker, the leader may not be having the right answer but
knows the way to find them. An inspirational leader is an active listener and takes the
risk to cut through difficulties and make things happen. On the other hand the
transactional leadership deal with someone who values structure and order. They are
more likely to command, lead or manage large operations and international projects
which require stringent regulations and rules to obtain the desired objectives. The true
value of transactional leadership is not in the place where innovation and creativity are
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valued. Transactional leadership are people who are self-motivated and like to work in
directed ad structure environment while transformation leaders only seek to inspire
and motivate team members to influence their actions rather than direct.
The company follows the culture of transformational leadership by ensuring
brainstorming sessions in their training programs would also help the employees to
analyse and understand the goals and objective of the company and their culture which
will set the vision for the firm (Hossain, 2015). The systems and structures also play
an important role in encouraging innovation by changing the products and processes
which will invoke further innovation. This creates an innovative environment at the
workplace that helps the employees to generate new ideas, skills, and methods and
create a strong base for innovation. It might be noted that the organizational
innovation are of two types induced or autonomous. While induced innovation is a
result of internal experience, profits, technology and costs, the autonomous innovation
have an indirect relationship with purchase costs, technology and profits. Moreover,
rewarding of ideas and recognition is also one such way by which the employees feels
free to share and exchange their ideas and creativity with their superiors just in case of
Virgin group, however, the company holds a community of culture where the person,
employees, and other staffs can contribute and share their thoughts on any issues. As a
result, this culture of leadership and development with defined mission and vision of
the organization, helps the company to increase their performance and productivity
drastically.
Task 2
P3. 4Ps of innovation and the use of the innovation funnel to examine and
shape innovative ideas
The 4P’s of the innovation consists of:
 Product innovation: Product is a thing which is produced by the organisation.
As a bakery firm want to innovate its product so first firm should think about
the product, product quality, product shape and colour. Company innovate their
new product and provide that to customer. As the bakery firm can innovate
baked product to their customer. Firm should identify about the weather
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because due to weather consumer change their taste and preference. As winter
season bakery firm provide hot and baked product to their customer. As Apple
inc company launch its new I pod product to consumer and its achieve the
higher growth in mp3 market and technology.
 Process innovation: Process innovation tell about the process of start any
work. If bakery firm want to innovate their product so firm have to complete a
process to meet the firm objectives. Process innovation is the step by step
method. As a bakery firm should follow the process and find the process of
new innovation product. Process should be clear and cheaper. Bakery firm
should manage the product raw material, burning stove to bake product and
place to complete the process of product. Process is necessary to innovate new
product or any changes in existing product. Apple inc company did the market
analysis and start the process of new I pod product for customer.
 Position innovation: Position is as like promotion in marketing. Position is
related to the perception of firm. Which tell about the position of firm in
market. Position refers the psychological category and promotion is the process
of meet product with the customer. Customer use product and give comments
related to product which help to collect proper feedback about product. As
bakery firm research that what is the perception of customer, perception of
employee, what employee think about product and firm. A competitive market
always prefer the position. Apple inc company stand on the first position after
innovate new I pod product.
 Paradigm innovation: It shows the innovate product category and how to
manage product. It concerns the changes when a firm do changes in their
product. It is a way to sell the product in market and online market. It is last
stage of innovation. New product should be better and effective to all the
customer and all the user. It increase the sales and profit. New product maintain
the position of firm in market. It help to increase the goodwill of firm and
create better environment to firm, employee and customer.
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On the basis of external variable factors the use of innovation shaping employees
is:
 Political: On the political front, the company is considering a direct trade of
cocoa farmers which are an innovation concept which helps in building
mutual relations with the farmers from the region, cocoa is imported.
 Economic: As part of economic factors, the organisation is benefiting the
poor farmers with fair trade practices. The company deal wins a contract
with a farmer with the commitment of healthy and responsible cultivation.
They offer cultivation certificate to farmers which can be an innovative
process by the company.
 Social: Socially, the practices of making handmade chocolates are provided
in different tastes and made with different traditional techniques into the
chocolate recipes. The company also deals in sustainable lunch program
providing food to local schools who struggle for nutrition.
 Technological: technologically, the company uses 70 steps of chocolates
making which itself creates business value for the company by the applying
different process and techniques in making thereby creating tasty
chocolates products.
 Ecological: In terms of ecological factors, the company do not use any
harmful substances in the material in the process of making as it can harm
the environment. The products are packaged in clothing material and
recycle paper which avoids uses of plastics.
The employees and staffs, who are engaged in the making of products in the
organisation, must always involve in experimentation of new ways such as funnel for
product development and process by which they come across different techniques and
skills to make improvement in the products and provide a better and enhanced
products to the customers(Carter and McCullough, 2014).The practices of skills and
knowledge exchange culture just like in the case of Virgin group which has enhanced
the quality of the employees and staffs to present their business concepts and idea
based on the realistic situation.
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Similarly, the employees of Askinosie should also encourage their team
members and other employees to use the opportunity available in the market and
generate an idea which can help the company in expanding its operations and products
segments with ample resources and people (Soard, 2016). This concept is basically
called innovation funnel, where the opportunity is converted to ideas generation which
is further supported by technologies, resources with the help of which the company
finally makes it the final product. In the given case study, the company virgin group
has grown from a single firm to multiple business segments like Virgin Rail, Virgin
Express, Virgin,Atlantic, Virgin Blue, etc. is found to be exploring and curiosity to
new business horizons. This depicts the evolving with best ideas and concept that help
in solving the queries and problems of the company in effective manners(BizExcell
Copyright, 2016).
P4. Develop frugal innovation and how to use in organisation
The term frugal innovation means reconfiguring, new business models, discovering
value chain, redesigning of products which serve the customer with extremely
enhanced facilities, benefits or uses, providing value addition in exchange for
monetary transactions. It responds to the limitations of resources, material, financial or
institutional methods that turn constraints into an advantage(Frugal Innovation Hub,
2016). The six principles of frugal innovation are:
 Find opportunity in adversity: It means identifying the problems and
converting them into opportunity. This can reduce threat to innovation to a
certain extent.
 Do more with less: The second principles means to use the existing
opportunity or product in redefining in a new way or with better solutions.
 Think and act flexibility: It means gneratig improvisation instead of being
rigid in the process applied.
 Keep it simple: It is not necessary that multiple options will lead to a good
solution. One needs to keep its objectives clear and simple.
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 Include the margins: It talks about the knowing your people and having a
problems solving approach to go beyond the limits.
 Follow the heart: One needs to be passionate and determined in order to move
ahead and create a new innovation.
The main aim of frugal innovation lies in the minimisation of use of resources in
production, development, delivery, etc. The use of frugal innovation helps in reduction
of costs of products and services, the cost of unit per volume, deriving alternative
solutions, etc which makes it viable to operate the business activities at large scale.
The frugal innovation of an organization is followed by any social mission. In the case
of Askinosie chocolate, the company’s workforces and management can implement
the methods of frugal innovation, to carve its presences in expanding their operations
to various places outside the US(Bhatti, 2011). The company being Small scale in size
can be converted into large scale by expanding its operations to foreign countries
through frugal innovation methods. In the above case study, the concept of frugal
innovation can be seen in Apple since, where the innovation of redesign the product of
MP3 players into iPod that contains small physical presence for storage of data or
songs in chip size. This design of products with small size and large benefits is a
perfect example of frugal innovation that has enhanced the utilities of the customers in
playing and recording of approx 1000 songs and genre of music(McNicoll, 2014).
Similar to this,the management of Askinosie organization can also look for
redesigning their main products i.e. chocolate making with a new flavour, tastes, and
additions of different cultures which will enrich the quality and taste of chocolate on
consumption(Duval, 2013). Moreover, the company can help in getting its operations
expanded outside the US by repositioning their products with the rise in demand and
consumption in the home ground. Therefore, the implementation of frugal innovation
can help the company to get recognitions and attention from their customers and
people across the world, thereby gaining competitive advantage (Nesta, 2016).
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TASK3
P5. Importance of the commercial funnel and the application of New
Product Development
The commercial funnel in the marketing field referred as a sales grinder, which
illustrates the idea on how to increase sales for the products which starts with many
customers and ends with small numbers who are actually converting into a purchase.
As a CEO of the Askinoise, the employees must require figuring out or give an image
about the customer needs and reasons for purchasing the products(Ostanik, 2016). The
company making chocolate of different tastes and texture must understand the tastes of
customers forts in order to create full-fledged demand which will help in increasing
the volume of the products (SHAWN ASKINOSIE, 2016). These ideas utilized to
create demand in the product makes commercial funnel important for every
organization. In addition, the application of new product development is also another
method by which the management of the Askinosie can implement in order to get a
new market,replacing of existing products, old products having new packaging, new
marketing techniques for an old product etc. Are ways to develop new products can
take place n the organization(SHAWN ASKINOSIE, 2016).The marketing team of the
company can also use re positioning of chocolate product, cost reduction which
provides similar quality at lower cost, improvement in product designs and ingredients
in the making of the products could be used by the management and employee who are
involved in the making of the product to show new developments just in case of iPod
in the given case study which is new product development by Apple Inc.(Bhuiyan,
2011).
P6. Innovation Business Case for chosen organization
The business case for innovation for chosen organization like Askinosie
chocolate will deal with providing solutions to risks, investment patterns, endorsing
the idea, logical thinking of the problems, customer’s queries, accessing for funds etc.
The main purpose of preparing a business case for the company is to clarify the
imperfect, unclear ideas or notion due to which the new ideas cannot be blocked from
entering the world of commercialization.
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