Unit 8: Innovation and Commercialisation Report: Asda vs Aldi Analysis

This report provides a comprehensive analysis of innovation and commercialization strategies employed by Asda and Aldi, two major retailers in the United Kingdom. It begins by defining innovation and exploring how organizations source and foster it, using specific examples from both companies. The report then distinguishes between different types of innovation (disruptive, sustaining, incremental, and radical) and examines how these are processed within organizations. It includes an analysis of the ways innovation is sourced and supported within different organizational environments and cultures. The report also presents a detailed business case for innovation, including risks, benefits, and funding methods, as well as a discussion of tools for protecting intellectual property. The analysis covers their responses during the COVID-19 pandemic. The report concludes with an evaluation of how innovation is successfully developed and embedded in different organizational contexts, offering valuable insights into the retail sector's adaptation and competitive strategies. The report also includes examples of how these companies have adopted digital transformation and new technologies to improve their operations. This report is available on Desklib, a platform providing AI-based study tools for students.

UNIT 8
Innovation and
Commercialisation

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1 Discuss the ways in which different organisations source and foster innovation, using
specific examples.........................................................................................................................1
M1 Analyse the ways in which innovation is sourced and supported within different
organisation..................................................................................................................................3
environments and cultures...........................................................................................................3
P2 Distingush between different types of innovation and how they are processed within
organisations................................................................................................................................3
M2 Analyse how various types of innovation are successfully processed within different
organisation settings.....................................................................................................................5
D1 Critically analyse how innovation is successfully developed and embedded in different
organisational contexts.................................................................................................................6
P3 Produce a detailed business case for innovation for an organisation, including risks,
benefits and ways to access funding............................................................................................6
M3 Analysis of evidence based business case for innovation focusing on the business value for
potential investment.....................................................................................................................9
P4 Different types of tools that organizations can use to develop, retain and protect intellectual
property and knowledge of company...........................................................................................9
M4 Evaluation of different tools that can be used to protect, develop and retain the intellectual
property and knowledge of organization. .................................................................................10
D2 Produce a business case for innovation, including an action plan for development and
methods for its successful protection in the context of the wider business environment..........11
CONCLUSION..............................................................................................................................11
REFERENCES .............................................................................................................................12
Books and Journals....................................................................................................................12

INTRODUCTION
Innovation can be defined as the process of making an idea or invention into a product or
service that creates a value for which a customer is willing to pay. Innovation is to come up with
the new ideologies and technologies that might increase the productivity and generate huge
output and values. Innovation embraces new technologies and their use, improved industrial
methods and is also about changing the way of operations of a business (Pantano and Vannucci,
2019). This report is an evaluation of how the two giant retailers of the United Kingdom (i.e.
Asda Stores Ltd & Aldi Nord) adopted innovative changes in their operational functions during
the pandemic of COVID-19. Asda Stores Ltd being the third largest retailer of the United
Kingdom hold upto 14.1% shares of the UK stock exchange in the retail industry where as Aldi
Nord holds the sixth largest retailer position in the british market with 9.3% shares. This report
will analyse and enlighten the innovations and techniques implemented by these organisations
and also how they commercialise and protect or retain for innovation.
MAIN BODY
P1 Discuss the methods in which different companies source and foster innovation, using
specific examples.
Creativity and innovation must be cultivated within an organization. In shaping the
productivity of an organisation, the use of idea-generation does require a degree of structure.
Consumers are pushing the companies to deliver more innovative, affordable and exciting
products and services (Mariani and Nambisan, 2021). In the retail-supermarket industry of the
United Kingdom, the organisations have adopted numerous ways to foster innovation in the
recent years to attract more and more consumers and upgrade their market share (Leach, 2022).
Asda Stores Ltd a subsidary of Walmart is the third largest retailer in british and is
operating with 633 stores across the United Kingdom whereas Aldi Nord is the sixth largest
retailer of the british retail industry and is operating with about 956 stores.
Asda is operating in various segments of products such as grocery, general merchandise,
financial services and brands such as Asda Mobiles, Asda Money, Asda Living whereas Aldi
deals only in the Supermarket, Hypermarkets, Superstores and Convenience stores.
1

In the recent years, both the organisations have adopted, implemented numerous
innovations in their product portfolios as well as in their business operations. Along with these
innovations, both the organisation have launched and added various new products in their
respective tally. Considering the COVID-19 pandemic situations where people were afraid to go
out of their home, these organisations have delivered numerous products via their online
channels, applications (Saber and Weber, 2019). Such of the various incedents of innovation
implemented by both the organisations have been discussed below:-
 For instance, in the year 2014, The retailer Asda Stores Ltd was working to innovate in
its supply chain and they announced International Procurement Limited which is a wholly
owned subsidiary of Asda. To work across markets to share expertise and innovation
Asda's grocery team had work in order to improvise the customer experience and ensure
the supply chain operates more efficiently (Lamey, et. Al, 2021). For the better
understanding of its customers, Asda chosed to use the virtual vouchers with the
introduction of digital couponing to help build a better view of customers and
understandings.
 In the recent years, Aldi stimulated the invasion of discount and a seismic shift in the
structure of the grocery market. Aldi leading the warpath to market domination and had
achieved the success it has via a sequence of disruptive innovation moves (Saber, and
Weber, 2019.). By initiating and encouraging the consumers to bringing their own bags
or invest in reusable bags, Aldi was the first to champion the absence of bags. In the
context to further savings, the modest size of Aldi stores combined with the inhouse
distriuton network and supply chain along with the avoidance of 24 hour operations.
 Asda being the third largest retailer of British Market had decided to adopt HCM
platform Workday for its internal people management – a move towards digital
tranformation, with an aim towards keeping the track and looking after all of its global
employees. he Workday systems used by Asda includes various forms such as, Workday
Human Capital Management, Workday Absence Management, Workday Benefits,
Workday Compensation, Workday Learning, Workday Prism Analytics and last but not
the least Workday Recruiting in order to soothen its working styles.
 In the recent years, Aldi has purchased many applications in view to digitalize its
working, such as: SAP Ariba, Salesforce Sales Cloud for Sales Automation, CRM, Sales
2

Engagement, SAP Commerce Cloud, etc. These software system adopted by Aldi with an
to increase its propensity to invest more and deepen its relationship with SAP, Salesforce,
Akamai and identify new suppliers being a part of their overall Digital and IT
transformation projects to stay competitive, fend off threats from disruptive forces, and
also to comply with internal mandates & improve overall enterprise efficiency.
M1 Examine the ways in which innovation is sourced and supported within different
organisation
environments and cultures.
A proposeful search of opportunities in the related field of area or in the social &
economical environment leads towards the innovation within the company. Innovation is
necessary for every organisation in order to adapt and overcome the challenges of change during
the span of time including the advancement of technologies, developing a competitve advantage,
Fast peneteration of markets, fostering growth, dynamic market trends, consumer preferences,
unexpected situations etc. In contrast to the such big retailers like Asda and Aldi of the British
Supermarket have adopted and implemented numerous innovations in their product portfolios as
well as in their business operations with the aim towards increasing their sales, customer
engagements, enhancing their customer's shopping experience. Both the organisations are rapidly
growing and competing with the markets in lieu with the digitalization era and competitive
environment.
P2 Distingush between different types of innovation and how they are processed within
organisations.
There are majorily four types of innovation:-
1. Disruptive Innovation: Also known as stleath innovation which is the introduction of a
new product or service into an established industry. Aldi tore up the rulebook of the
established players in the british market and carved its own path to achieve the success
through a series of disruptive innovation moves (Steenkamp and Sloot, 2018).
2. Sustaining Innovation: The best way to protect an organisation in a market is to adopt
the sustaining innovation. It focuses on larger changes to gain or maintain the market
3

leader position with improvements in the existing products which ultimately results in
increasing value and customer satisfaction. For Instance, Asda defines the zero waste
which is 90% diversion for landfill and incineration or operational waste which is reused
or recycled. Asda aims to reduce the use of plastic bags with in line with 'use less and
recycle more'. Asda has also launched new packaging across its entire chicken range,
which will save approximate 450 tonnes of plastic a year.
3. Incremental Innovation: It consititutes a gradual and continuous improvement of
exisiting products and services of the organisation in a market (Le, 2020). Aldi's business
strategy invloves the unexpected products at amazing prices. An example of innovation
of its own products includes a promotion of lemon-flavored products supporting Alex’s
Lemonade which stand for Childhood Cancer Research. Aldi contributes to the charity
every time a customer buys one of several products featuring the foundation's logo like
lemon-drizzled kettle corn or lemon-flavored energy bars.
4. Radical Innovation: Radical innovation utilizes a break through of technology which
transforms industries and creation of a new market. This innovation completely changes
the interactions of the organisation within the marketplace (Rampa and Agogué, 2021).
Asda in the recent years has launched an application with different click and collect
options which allowed the customers to pick up the grocery orders from its stores. Asda
soothen the customer shopping experience and saved the time, as the customers have to
select the order through the mobile application and collect the same from the store rather
than finding the products in the supermarket.
The above aforementioned categories are the types of innovation which help the companies to
grow. In order to process these types of innovation in the operations of a business (Pertuz and
Pérez, 2021), there are mainly five stages involved:
1. Idea Generation and Mobilization: The generation stage is the starting line for new
ideas which are fueld by the pressure to compete and by the freedom to explore. Once the
idea is generated, it transports to the mobilization stage wherein the idea travels to the
different logical or physical location.
2. Advocacy and Screening: Advocacy and screening helps to evaluate the feasibility of an
idea with its potential problem and advantages. One of the biggest benefits for the joint
4

processes of advocacy and screening is refinement wherein if the idea contains potential,
discussions and arguments help enhance the idea.
3. Experimentation: The experimentation stage examines the sustainability of ideas for the
organisation. It generates various new ideas in line with the information collected based
on the results and feasibility of the primary idea.
4. Commercialization: This stage develops the market value by focusing on the impact of
basic idea. Using the prototype and pilot project, organisations like Asda and Aldi
examins the innovation idea in the real world along with the suitability of the idea at a
significant time.
5. Diffusion and Implementation: At the final stage of innovation process where diffusion
refers to the acceptance of an innovative idea by the complete organisation and
implementation is the stage which sets up all the requirements to develop and fulfill the
innovation. This stage allows an organisation to identify the succeeding set of
requirements for its consumers.
M2 Examine how various types of innovation are successfully processed within different
organisation settings.
The categorisation of innovation can be done in four segments such as: Incremental,
Radical, Disruptive and Sustaining. In the implementation of successful innovation idea in the
business, the organisation in lieu should adopt the neccesary steps of innovation process. Asda
and Aldi while competing in the retail industry have introduced numerous innovation ideas and
methods with aim to grow. The steps of the innovation process has carved the organisation in
cultivating new ideas, evaluating the pros and cons, experimenting and implementing the same
into the world to gather the impact and results.
5

D1 Critically examine how innovation is successfully developed and embedded in different
organisational contexts.
In the world of competition, an innovation to become successful must create distinguished
values in line with the sets of consumers involved. Innovative organisations adopt to change in a
continuous pattern by generating new ideas to grow and launching new products. The numerous
change in the market trends, introduction and improvisation of new technologies, changes in
consumer's perference and mind set, are the leading reasons where an organisation generate and
implement an innovation within the organisation or to their product portfolio. The innovation is
categorized in four categories, namely; Radical, Disruptive, Incremental and Sustaining. In
successful implementation of the innovation within an organisation, it should follow the
innovation process to achieve its organisation objectives. To overcome the challenges of change,
companies should adopt innovation in order to achieve their growth.
P3 Produce a detailed business case for innovation for an organisation, comprising the risks,
benefits and ways to access funding.
Business case is an effective tool that can be used by management leaders in order to
provide justification for a project, portfolio or a programme. It can help by evaluating the
benefits, cost, risks, funding sources and alternatives associated with a project (Barrow, Barrow
and Brown, 2018). It can be used to convince the key decision maker of an organization that
whether the desired actions are going to result in desired output or not. An effective business
plan includes objectives, project and company summary, risks, benefits, mission, funding sources
and budget required to accomplish the project. Using an effective business plan, organization can
outline a business problem and can take preventive measure or providing options to solve it. It is
derived that both Asda and Aldi are adopting innovative techniques to lure new customers and
improving their shopping experience. So, to enter in UK’s grocery market the company had
decided to introduce a new innovative idea of “Grocery at your Doorstep”. With this project, the
company will launch several mobile grocery vans which will carry the basic household items at
the initial stage and later more varieties will be added. Customers can book a slot using the
mobile application, and the van will reach at the given address in that time slot. A detailed
business case to support the implementation of this project is presented below:
6

Executive Summary
The company is inclined to provide best quality grocery product by focusing on convenience of
shoppers. To improve the experience and ease in shopping the company is coming up with an
innovative idea of mobile grocery van. This will ease the shopping experience of customers as
grocery will now be available at their doorstep and they can pick whatever they want and can
make payment digitally.
Company Description
The company is an online grocery and general merchandise retail business. It offers facility of
online shopping through its 24x7 website and delivery of grocery items. The company is now
planning to expand its network in UK using various technological innovations, techniques and
processes in order to maintain customers’ satisfaction.
Objectives
Objectives of introducing innovation are described below:
 Improving the firm’s efficiency and productivity.
 Increasing the reputation and enhancing the company’s image.
 Attract new customers by exciting and imaginative innovation.
 To increase the sale and brand awareness.
 To gain competitive advantage in grocery retails industry.
 To establish an effective network in order to fulfil consumers’ needs on time and
ensuring their satisfaction.
 To become a sustainable and environment friendly firm.
Mission Statement
The company is aiming to be the top choice among grocery dealers of UK by focusing to
enhance the shopping experience of shoppers and gain competitive advantage over the
competitors. The company is working with a goal of becoming the most customer oriented
grocery firm.
Innovation: -
The company is introducing a project named “Grocery at your Doorstep” in which mobile
grocery vans will be launched with basic household need products in first phase. The customers
have to book time slots and the van will reach at their provided address in the selected slot. The
7

customer then can pick products of their choice. This will enhance the customers shopping
experience as they do not have to visit any market.
Risks
The risks associated with the desired project are elaborated below:
 It will be difficult for mobile vans to cover remote areas as it will require time and fuel.
 Functioning of these vans will be a costly practice and it will be difficult for company to
maintain profit margin.
 Working in extreme weather like heavy rain or storm can be challenging task for vans.
 Malfunctioning or any other issues in mobile application can halt the whole
infrastructure.
Benefits
The project of mobile delivery vans can benefit the companies in several ways:
 This project will enhance the convenience for shoppers as they do not have to visit any
supermarket or store as they can get grocery at their doorstep in the same price.
 New customers will get attracted towards it as they will find the project innovative and
imaginative. This will improve the sales figure and profitability of the firm.
 Advanced GPS and tracking technology will help in enabling the customers to track their
scheduled shopping slot and location of vans.
Financing Sources
This innovative project will require high capital and required funds can be sourced by various
ways:
 Retained Earnings: This source of funds is part of profit earned by the company in past
and can be used for betterment of company.
 Angel Investor: These are those wealthy people who wants to invest in a project in order
to earn profit and reserve the right to supervise the innovation project.
 Debt Capital: Organization can obtain funds by financing the planned project by taking
loans from financial institutions like banks or NBFCs.
M3 Examining the evidence based business case for innovation directing on the business value
for potential investment.
An effective business case can be very beneficial for a company seeking innovation in its
operation. It helps the business by thoroughly analysing the plan of innovation and provides an
8

insight of it. It functions as a blueprint of plan’s success and also provide clarity on different
stages involved in it. An effective business plan consists elements such as vision and mission of
the project, risks and benefits associated with it, how much fund is required for project
completion, and the source of funds. It also helps the business in setting the objectives and
providing path to achieve them. Through an effective business plan, company can derive whether
the plan will succeed or not, or if there is any rectification required.
P4 Different types of tools which an organizations can use to develop, retain and protect
intellectual property and knowledge of company.
Intellectual Properties of a business refers to the creation of mind which involves unique
ideas, inventions, designs and symbols, artistic works, names and logos used in the business. IP
of a business is its key driver of growth and innovation (Sherwood, 2019). These intangible
assets help the business in getting competitive and advantage and protection of these properties
offers incentives to the business to cope up in competitive and crowded industry. There are
various tools used to protect Intellectual Property of a business such as:
Trademark: A trademark functions as a brand name for business. It can be any name, signature,
figure, photograph, symbol or word that distinguish a product or service with other companies in
the market (Ko, et.al. 2020). Registration of trademark for an entity will offer exclusive right and
ownership over that entity and nobody outside the business can use that trademark without the
owner’s consult.
Copyright: This tool of IP protection offers the protection to creators over their artistic and
creative work (Stokes, 2021). Copyright protects the work to be used by others without consent
its creator. Is someone breach the copyright owner will be entitled to statutory damages by the
legal body.
Patents: Patents provides protection and registration of the unique inventions (Stim, 2020). A
patent for an invention provides the right to inventor to decide who can use the invention and
how it can be used. After patenting the innovation, the technical information related to the
invention is made available to public through published patent document.
 Registering the names of company and domains: The name of company represents the
brand image and identity to business. To maintain a different identity in market, it is
essential for business to own the name, so that others cannot operate with the same name.
9

A unique domain name also proves a digital unique identity and it must be done quickly
by company.
Adopting robust cyber security: The dependence of businesses on technology is increasing
rapidly. In today’s world, almost all companies are adopting digital technology to store its
important and confidential data (Graham, Olson and Howard, 2016). It is critical for a business
to adopt strong cyber security infrastructure to protect its crucial information or intellectual
property from outsiders.
Avoid Joint Ownership: A business with two or more owners faces the risk of Intellectual
Property exploitation as there will be more than one party with authority to control the IP (Parr,
R.L., 2018). In the long run, joint ownership can lead to state of confusion and legal issues that
can harm both the IP of businesses and the involved parties. To avoid such issues, a business
must try to function with single owner over the IP of business.
M4 Evaluation of different tools that can be used to protect, develop and retain the intellectual
property and knowledge of organization.
The Intellectual Property of an organizations offers uniqueness and identity to the
business in industry. It helps the business by providing competitive advantage and enhancing the
market value of business (Bainbridge, 2018). It is very important for businesses to identify the
need of protecting and developing its Intellectual Property. IP involves various assets of business
such as logo, brand name, novel products, product names, inventions etc. IP protection of these
assets provides exclusive right over those assets, so that no one outside the business can use
them. Business can use several tools in order to protect the IP such as Patents, Copyrights,
Trademarks, Cyber security infrastructure, getting a unique domain and business name etc.
D2 Produce a business case for innovation, including an action plan for development and
methods for its successful protection in the context of the wider business environment.
A detailed business case facilitates the organization to achieve its plan for adopting
innovation effectively in business. The company is introducing an innovative approach to
increase the shopping convenience and increase its profitability. A business case will provide
detailed analysis which helps the business in identifying the problems and suggesting measure to
minimize the risks. An effective business case involves mission, objectives, summary, risks and
benefits, and source of funds required for the project. Another important function of organization
10

is to protect its intellectual property as they help in providing competitiveness and uniqueness in
industry. Companies can use various tools in order to protect, retain and develop its IP such as
trademarks, patents, copyrights etc.
CONCLUSION
After the detailed analysis of above report, it can be concluded that business in today’s
world heavily depends on innovation as it helps an organization to adapt and combat the
challenges arise due to change. Innovation helps the business by providing competitive
advantage as it will enhance the productivity and ease the business operations. Advancement in
technology is the major factor which drives the need of business to adopt innovation. A proper
detailed business case can be used by organization to critically analyse the innovation plan. The
report also derives that protecting, retaining and developing the intellectual property of business
is also very essential to attain uniqueness and competitiveness in industry. To protect the IP,
there are certain tools which can be used by firm such as trademarks, patents, copyrights, unique
domain name, robust cyber security measures etc.
11

REFERENCES
Books and Journals
Pantano, E. and Vannucci, V., 2019. Who is innovating? An exploratory research of digital
technologies diffusion in retail industry. Journal of Retailing and Consumer Services, 49,
pp.297-304.
Mariani, M.M. and Nambisan, S., 2021. Innovation analytics and digital innovation
experimentation: the rise of research-driven online review platforms. Technological
Forecasting and Social Change, 172, p.121009.
Leach, C., 2022. The FMCG Market: Where We’ve Come From, Where We Are Now, and the
Problem We Face. In How to Save the FMCG Industry (pp. 11-46). Palgrave Macmillan,
Cham.
Lamey, L., Breugelmans, E., Vuegen, M. and ter Braak, A., 2021. Retail service innovations and
their impact on retailer shareholder value: Evidence from an event study. Journal of the
Academy of Marketing Science, 49(4), pp.811-833.
Saber, M. and Weber, A., 2019. How do supermarkets and discounters communicate about
sustainability? A comparative analysis of sustainability reports and in-store
communication. International Journal of Retail & Distribution Management.
Steenkamp, J.B. and Sloot, L., 2018. Retail disruptors: The spectacular rise and impact of the
hard discounters. Kogan Page Publishers.
Le, P.B., 2020. How transformational leadership facilitates radical and incremental innovation:
the mediating role of individual psychological capital. Asia-Pacific Journal of Business
Administration.
12

Rampa, R. and Agogué, M., 2021. Developing radical innovation capabilities: Exploring the
effects of training employees for creativity and innovation. Creativity and Innovation
Management, 30(1), pp.211-227.
Pertuz, V. and Pérez, A., 2021. Innovation management practices: review and guidance for
future research in SMEs. Management Review Quarterly, 71(1), pp.177-213.
Bainbridge, D., 2018. Intellectual Property. Pearson UK.
Barrow, C., Barrow, P. and Brown, R., 2018. The Business Plan Workbook: A Step-By-Step
Guide to Creating and Developing a Successful Business. Kogan Page Publishers.
Graham, J., Olson, R. and Howard, R. eds., 2016. Cyber security essentials. CRC Press.
Ko, N., Jeong, B., Yoon, J. and Son, C., 2020. Patent-trademark linking framework for business
competition analysis.Computers in Industry, 122, p.103242.
Parr, R.L., 2018. Intellectual property: valuation, exploitation, and infringement damages. John
Wiley & Sons.
Sherwood, R.M., 2019. Intellectual property and economic development. Routledge.
Stim, R., 2020. Patent, copyright & trademark. Nolo.
Stokes, S., 2021. Art and copyright. Bloomsbury Publishing.
(Online)
Market share of Asda Stores and Aldi Nord in the retail industry of United Kingdom, 2022.
[online] Available through: https://www.kantar.com/uki/inspiration/fmcg/2022-wp-big-
four-line-up-changes-as-grocery-price-inflation-accelerates-again
13