Report: Innovation, Commercialisation, and Essence Drinks Analysis

This report provides a detailed analysis of innovation and commercialization strategies for Essence Drinks, a company facing challenges in the UK market due to increased competition for its lassi product. The report explores the meaning of innovation, distinguishing it from invention, and emphasizes the importance of innovation for business growth. It examines factors shaping innovation and commercialization, including organizational vision, leadership, culture, and teamwork. The report applies the 4Ps of innovation (product, process, position, and paradigm) to Essence Drinks, illustrating how each element can be leveraged to generate innovative ideas. It also demonstrates the use of an innovation funnel to gather, filter, and shape innovative ideas within the company. Furthermore, the report covers frugal innovation, the commercial funnel, new product development, an innovation plan, and potential funding sources for Essence Drinks, as well as tools for knowledge and intellectual property protection.

INNOVATION
AND
COMMERCIALISATION

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
P1 Meaning of innovation and importance of innovation over invention with comparison.......1
P2 Factors that can shape innovation and commercialisation of an organization.......................2
P3 4Ps of innovation and the uses of innovation funnel to know and shape innovative ideas in
Essence Drinks............................................................................................................................4
P4 Developments in frugal innovation with suitable examples of Essence Drinks....................7
P5 Importance of the commercial funnel and application of new product development
processing for commercialisation of innovation.........................................................................8
P6 Innovation plan for Essence Drinks and sources of funding for the company......................9
P7 Different tools to develop, retain and protect knowledge and intellectual property of
Essence Drinks..........................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES ..........................................................................................................................11
.............................................................................................................................................11

INTRODUCTION
Innovation is an application for better solutions to meet new requirements, unsatisfied
needs and existing customers needs (Abou-Ras, Kirchartz and Rau, 2011). This can be
implemented through introducing more-effective products, process, technologies and processes
which are already in a market. Commercialisation means efforts for introducing a innovative
products into market. Therefore both Innovation and Commercialisation is interrelated.
In this assignment case study on Akshaya Kumar have been done. It was found that he is
suffering from low sales from third year onwards, due to low lassi product demand in UK
market. The main reason found behind low sales was increase in number of competitors in a
market.
The purpose of this report is to make innovation plan for Mr. Kumar to increase Essence
Drinks sales. Different approaches to process innovative ideas like innovation funnel and frugal
innovation have been used in this report additional to this, techniques like 4Ps of innovation has
also been used.
TASK
P1 Meaning of innovation and importance of innovation over invention with comparison
Innovation is the process of converting an idea or invention into new products and
services that gives value to a customer and he pays for it (Clark, 2010). For innovation, the first
thing required is, an idea should be recreated at budgeted cost and must satisfy a specific needs.
For example making home at moon is innovative idea but if the cost of that particular project is
unaffordable than it will not be innovative any more for a company. Innovation involves
intentional application of knowledge, imagination and information to generate new ideas and
finally converted into useful products. In terms of business, innovation is done when ideas are
applied by top management of a company in order to give additional services to their customers
or by providing new products to them.
Importance of innovation over invention with comparison are given in table below:
Basis Invention Innovation
Meaning It refers to the occurrence of an idea
about a product and process that
It implies implementation of these
ideas into product and process first
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never been made by any one
(Cooper, Seiford and Zhu, 2011).
time (Gupta, 2011).
Purpose Creating new product. Adding value to a product which is
already exists.
How it works By creating new ideas and its uses in
theories.
By implementing these new ideas to
add some values to a product.
Skills needed Scientific skills. Mix of marketing, technical and
strategic skills.
Activities R & D department only do this. Any one from organization can give
their contribution towards innovation.
Hence, from the above comparison it can be concluded that innovation is more important
for Essence Drinks than invention because invention can only produce or create a new thing but
an innovative mind tells how it can make money for a company. It can be said that innovation is
not the same thing as invention because these two have different concepts. One more important
thing which clearly differentiate both the concept is, an idea when accepted by all called
invention but an innovation is when an idea not only accepted by people but also creates some
values by proving its feasibility to a business through fulfilling specific needs of consumers
(Huang, 2013).
For example, in case of Essence Drinks, Mr. Kumar has invented mango lassi which no
one has created yet. But without innovative distribution of these product was not possible for
him. It is not necessary that invention is the only source for innovation. It is just an idea to do
things differently. As lassi is not new but adding something into it makes it creative. So,
innovation is interdependent from invention. Hence, it is more important than invention for
Essence Drinks.
P2 Factors that can shape innovation and commercialisation of an organization
Innovation and commercialisations are interrelated as without commercialisation
innovation will remain ineffective (Ke, 2015). This only applies to innovation in making new
combination of products not for innovation in operational process or innovation in marketing
strategies. Commercialisation is nothing but doing publicity of new innovative products in the
market. There are various factors which can shape innovation and commercialisation of an
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organizations like organisational vision, leadership, culture and teamwork. These factors with the
reason how it can shape innovation and commercialisation are explained below:
 Organisational Vision: It is the vision of a company which gives a direction about
where to move and what to achieve (Khan, 2015). Suppose the vision of a company is to
deliver its services to all the people across world. This vision gives a direction to focus on
every country across the world, it will make a company global and transnational. Let's
take another vision which is to give quality services to its customers. Here, the vision of
company clearly indicates that, it is not focusing on quantity like the previous company
but it is focusing on provide quality services to existing customers. It will give guidance
to work for quality by reducing defects in it. This vision shapes innovation and
commercialisation by giving opportunities to its employees to give their contributions
through innovative ideas and different ways of commercialisation. Lets take the example
of Essence Drinks, Mr. Kumar launched new product which is mango lassi in a market
against which he got good response. Essence Drink has a vision of providing healthy
drinks. Mr. Kumar was successfully implemented vision of the company by providing
healthy lassi. But due to fail in commercialisation strategies he face failure in selling
products. Due to this vision all innovation and commercialisation will be based on
providing healthy drinks only. He can't make any innovative drinks which is not healthy
even if it is satisfies needs of a customer.
 Leadership: It is a quality of a person to lead a team or people (Muscio, 2010). A leader
is responsible to assemble teams and lead them to give their best. An effective leader
recognizes different talents within his team and make a perfect combination of their skills
to get the best results from the team. It gives shape to innovation and commercialisation
by showcasing their ideas into the growth and sustainability of a company. Let's take the
case of Essence Drinks, Mr. Kumar is a founder and leader of his company, if he gives
opportunities to his employees to give suggestions on how they can defeat their
competitors. Than many talents can give their contributions in suggesting new ideas for
effective commercialisation plans or innovation in mango lassi. This can give shape to
innovation and commercialisation towards growth of the company.
 Culture: It defines the structure of a company and also tells about a ways organisation
accomplish its task (Qian and Haynes, 2014). Thus it can shape innovation and
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commercialisation by making innovative culture within a company. In case of Essential
Drink, company can handle the pressure of new competitors and declining sales by
creating innovative culture through inviting new talents to contribute their ideas for
commercialisation techniques while selling healthy lassi in the market.
 Teamwork: People working together to accomplish a task is known as teamwork
(Rosenbusch, Brinckmann and Bausch, 2011). Hence in case of Essence Drink,
teamwork can shape innovation and commercialisation through sorting right talents and
give them opportunities to implement their innovative ideas in commercialisation of their
products into market.
P3 4Ps of innovation and the uses of innovation funnel to know and shape innovative ideas in
Essence Drinks
Like 4 Ps of of marketing mix(Product, price, place and promotion), there's also 4 Ps of
innovation which is product, process, position and paradigm (Schroll and Mild, 2011). This all
Ps gives strength to generating innovative ideas. These 4 Ps of innovation mix has been
explained below with the suitable examples of Essence drinks:
 Product: It is a consumable item, which can be feel or touch by customers. Hence,
product innovation is something additional to a product to give it new look, shape and
tastes. A product innovation can be applied through improving in its packaging, delivery
methods, freshness of the product and healthiness of a product. Let's take the case of
Essence Drinks, it can improve mango lassi by add some flavours in it or by put butter
and almonds on it while serve it to a customer.
 Process: Generally it is a operational structure of any organisation in which production
of a product is done. Process innovation is nothing but changes and modification of
production process to produce a product more quicker, more efficient and cheaper.
Hence, in case of Essence Drinks it can innovate its process by following traditional way
of making lassi, implement some machines to reduce labour cost. Through decreasing its
cost on expenditure it can reduce its price which will give price advantage. It can also use
some unique recipes to make mango lassi. This uniqueness will give company a
monopoly advantage over its competitors.
 Position: In innovation, position implies perception of consumer towards its products.
Perception can include various factors which reflects the status of a company in a market.
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These factors could be paying bills by a company on time, paying salaries to their
employees, serving healthy drinks and genuineness of a company. Hence, in the case of
Essential Drinks, the perception of people was a healthy lassi serve by a company. As the
founder of that company is Indian guy and India is famous for lassi. So, customer's
perception is very important.
 Paradigm: It concerns the modification in the way of doing something in an
organisation. In the case of Essence Drink, it is making mango lassi through machines.
But if it innovates it by replacing machine made lassi with traditional lassi than it can
increase its product demand in the market.
Below is the diagram of 4Ps of Innovation:
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(Source: pirot.net 2014)
According to above diagram it is clear that company has to balance all these 4 factors to
make its product effective.
Uses of Innovation funnel to know and shape innovative ideas in Essential Drinks
have been explained through diagram
(Source: desai.com)
Innovation funnel helps a company in gather lots of ideas from employees and than short
listing these ideas by selecting most relevant one (Shapira, Youtie and Kay, 2011). A business
plan is made on the basis of these ideas on which council makes decisions about whether to work
or not on that particular idea. These uses are explained below:
 Generating new ideas: Innovation funnel is useful for Essential Drinks in getting new
ideas form their employees about changes in Lassi and in the way they serve it.
Employees can also suggests in how a company can effectively sale their products to
defeat their competitors.
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 Formation of Plan: Through innovation funnel, company like Essential Drinks can make
strategies and business plan easily. Because they already gathered lots of ideas and
selected the effective one. They will get few tips from these ideas. Essential Drinks can
shape these suggestions collected through funnel into profitability to a business.
 Identifying Alternatives: These ideas are not just ideas but are alternative path to do
business successfully. Innovation funnel is used to find these alternatives through
collecting different ideas from employees. These alternatives will help Essential Drinks
to shape these ideas into finding feasible solutions for the issue of declined sales.
M2 Analysing and application of Innovational funnel
Product is very important for a company, innovation funnel is used for describing various
steps which are taken in development of a product. Innovation funnel works on focus on general
to specific ideas. Innovation funnel assist in finding best process for production of product. It
also support in identifying and understanding parading or pattern i.e. market trend. Position of
product is very important, innovation funnel concentrate of step of manufacturing and by
evaluation these steps price and suitability of product can be determined. It will ultimately assist
in decision market position of product. Essence drink made by an innovative formula. It is new
idea and by making appropriate plans it can be introduced in more marketplace. Identification
and evaluation of various alternatives is important part of innovation funnel in order to for
making crucial decision like a flavoured lassi (Mango). It could be of other flavour but by
removing, through use of innovation funnel, other chosen option are left.
P4 Developments in frugal innovation with suitable examples of Essence Drinks
Frugal innovation is also known as frugal engineering, it is the process of minimising the
sophistication and cost of a production and goods of a company (Siegel and Wessner, 2012). It's
main objective is to removing and eliminating unnecessary features from the product to sell it in
developing countries. It works to make product cheaper by utilising best sources to reduce the
price of a product. In the case of Essence Drinks, frugal innovation has been done by assuming
that these three complaints may be the reason behind reducing sale of mango lassi in a market.
These two complaints are explained below:
 Too expensive: Due to innovation cost spend by Mr. Kumar on research and
development of Lassi, the price of product may be unaffordable by many consumers or it
is too expensive compare to its competitors.
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 Too Slow: It is possibility that, Mr. Kumar has implemented complex and restrictive
process to make lassi, which had made its process too slow.
Therefore these three developments actions can be done to make frugal innovation more
effective. These actions are explained below:
 Agility: Through arrange a interaction between users and designers, process can be made
quick and fast. Users are employees, workers and labours.
 Inclusiveness: It is the process of opening the opportunities by Essential Drinks towards
greatest sources of ideas from its employees, external competences and consumers.
Through this company can develop frugal innovation. Because these sources provides
accurate informations about alternatives available with the company.
 Conception: This development action explains that company should focus on making
with a little by optimum utilisation of its sources and reducing the wastage of raw
materials like milk and curd. Conception helps Essence Drinks in reducing its cost and
price by developing frugal innovation.
M3 Role of frugal innovation in Essence drink
Frugal innovation is related to making a sustainable product which can be developed
having innovate stakeholder and creating value for customer. Essence drink can increase their
number of customer and reduce cost of their business by focusing on frugal innovation. It also
play crucial role in better implementation of plans.
P5 Importance of the commercial funnel and application of new product development processing
for commercialisation of innovation
Commercial funnel is process of sorting marketing activities that generate awareness and
builds needs for a product and services (Thore, 2012). The objective of any commercial activities
is to improve the conversion rate at each stage of a funnel. Some of the importance of
commercial funnels are as follows:
 Sort and Rank the leads: It helps in creating a consistent and organised process for
examining, ranking and sorting the leads. Later these leads converted into potential
customers. Sorting and ranking process may be based on which customers are most likely
to buy, which leads have urgency to buy products and which leads needs longer follow up
to make them ready to buy a product.
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 Focus on the right leads: Commercial funnel is important to focus on only targetted
customers to save the efforts and cost of a company. It allows a company to save time
and resources by working with right leads, instead focusing on wrong needs.
 Follow up: It helps in follow up with the targetted customers to convert them into
potential customers.
New product development: It covers the complete process of launching new product into a
market. Some the application of new product development processing for commercialisation of
innovation are explained in steps below:
 Step 1- Generating: In this step ideologies are generated by utilising internal and
external SWOT analysis of a company. This ideologies helps in avoiding competition.
 Step 2 – Screening the Idea: In this step, specific criteria of ideas is used to sorting
various ideologies collected in step 1.
 Step 3 – Testing the Concept: In this step screened ideas are tested on certain
parameters like whether the consumer will understand the product, does he really needs
that services, etc.
 Step 4 – Business Analytics: In this step, a system of metrics is build to check and
measure the progress of the product.
 Step 5 – Marketability Tests: These tests helps a company in getting valuable
informations through beta versions and tests groups. These information helps in
improvements in a product before launching it.
 Step 6 – Product Development: In this step operational department will build plans to
produce real product. Marketing department will make strategies to distribution of a
product.
 Step 7 – Commercialize: In this step new product which is developed in step 6, will
published into the market. Advertising is done through different media's in this step.
 Step 8 – Post Launch Review: In this process, efficiency of NPD is reviewed. Managers
ensures about continues improvements in the product in this final step. A feedback is
passed to upper management on the basis of this review.
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