Innovation and Commercialisation: A Business Report

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Innovation and commercialisation

TABLE OF CONTENTS
Introduction......................................................................................................................................1
LO1..................................................................................................................................................2
P1 Explain innovation and determine its importance to organisations in comparison with
invention......................................................................................................................................2
P2 Explain how organisational vision, leadership, culture and teamwork can shape innovation
and commercialisation.................................................................................................................4
LO2..................................................................................................................................................6
P3 explain the 4Ps of innovation and explain the use of the innovation funnel to examine and
shape innovative ideas.................................................................................................................6
P4 Explain developments in frugal innovation and provide examples of how it is used in an
organizational context..................................................................................................................7
LO3..................................................................................................................................................9
P5 Explain the importance of the commercial funnel and the application of new product
development (NPD) processing for commercialisation of innovation........................................9
P6 Build an innovation business case for an organisation, including ways to access funding..11
LO 4...............................................................................................................................................14
P7 Evaluate the different tools that organisations can use to develop, retain and protect
knowledge and intellectual property..........................................................................................14
Conclusion.....................................................................................................................................15
References......................................................................................................................................16

LIST OF FIGURES
Figure 1: Innovation and invention..................................................................................................7
Figure 2: 4 Ps of Innovation..........................................................................................................10
Figure 3: Frugal innovation and its relevant aspects.....................................................................12
Figure 4: Phases under commercial funnel....................................................................................13

Introduction
When the organisation brings new ideas and imaginations into reality, then it will be termed as
innovation. The prime objective of innovation is to continuously grow in the industrial market
and beat the competition highly. The current report has provided the major different between
innovation and invention in the context of Essence Drink, and the effective strategy through
which it can substantially grow in the long term with the innovation process. Essence Drink is
the organisation that has existence in the UK market with the product of mango lassi. Initially,
the product was much preferred by the UK people, however, with other substitutes available in
the market, people has opted to other brands. This results in decline of sales and market share.
Now, the organisation wants to maintain its market capitalisation, and improve its sales with an
innovative intiative in its lassi.
A business case is developed in the report focusing on innovative approach towards the
improvement in the taste of lassi. In addition, significance of commercial funnel is highlighted
along with the new development process to support the innovative product development for
Essence Drink.
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LO1
P1 Explain innovation and determine its importance to organisations in comparison with
invention
Overview of the organisation
The founder of Essence drinks is Akshay Kumar who initiated to start an innovative business in
the UK market by supplying a healthy drink in the form of mango lassi. The organisation has
gained high growth and sales in the initial year, however, with the increased competition, it is
identified that the sales of Essence drinks is getting low, that ultimately impacts the market share
and capitalisation of the organisation. Therefore, the organisation is intending to bring some
creative value addition in the existing product to improve the brand value and customer base of
Essence drinks.
Innovation
It refers to a process in which new imaginations and ideas are transformed into goods and
services to create value for the customers. Innovation is an important element of success in the
dynamic organisational environment, which can be in any form, like, technological
advancement, improvement in the existing products, etc (Lee et al., 2014). On the other hand,
invention is the concept that support organisation in bringing new product and services in the
market to enhance competitive advantage. In the present case, the Essence drinks in intending to
innovate its current mango lassi, and therefore, it can bring new flavoured drink of “Guava
lassi”. It will improve the profitability of Essence drinks and assure high cash flows (Garima
Mittal, 2019). However, if the organisation moves towards any other new type of drinking
products, then it will be termed as invention.
Importance of innovation in comparison to invention in Essence Drinks
The prime goal of Essence drinks is to deliver healthy drinks to the people in the UK market, and
hence, it comes up with the mango lassi. However, the intense competition in the UK market has
lead the organisation left behind in the race of success and growth. Therefore, being innovative is
essential for Essence drinks to effectively respond to the competition and changing market
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trends. Hence, the innovation of Guava lassi will ensure creative development of Essence drinks
that will opens up wide growth opportunities. Also, innovation helps the leaders of the
organisation to be more creative and innovative in their work that support reinforcement of
brand. In comparison to invention, innovation requires people having diverse knowledge, skills,
and talent that facilitate the organisation in making the most out of what it has already available.
Figure 1: Innovation and invention
(Source: https://enggandtech.wordpress.com)
Further, continuous research and practical knowledge is essential to develop innovative projects
and implement it (Lisa Caprelli, 2015). Hence, the outcome of the innovation of Guava lassi will
be more reliable for Essence drinks in comparison to any other invention. Innovation improves
the ability of employees of being innovative in their performance and output. Hence, it widens
up the employment base of Essence drinks as it ensures an innovative working environment
where people can learn and share their knowledge that also support their career growth.
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P2 Explain how organisational vision, leadership, culture and teamwork can shape innovation
and commercialisation
Implementation of innovation projects requires the support of leaders, organisational culture, and
team members of Essence drinks to ensure substantial growth and success. Also, effective
allocation of resources and utilisation of technological advancement support the organisation in
brining quality changes in the mango lassi drinks.
Organisational vision: The vision of Essence drinks is to offer healthy drinking products to the
customers with continuous innovation and improvement (Kasemsap, 2014). Hence, the vision of
the organisation forces the employees to move towards the innovative practices and facilitate the
organization in attaining high market share and success with the introduction of new lassi drink
flavoured with Guava in the UK market.
Organisational culture: The innovative project of Essence drinks can get successful and desired
outcome with a positive and friendly working culture. The leaders and managers of Essence
drinks ensures that appropriate working environment and culture is provided to the employees to
enables them to showcase their potential of innovation and creativity. In addition, employees are
motivated to involve in the innovative and other similar projects so that they can put their inputs
in a more satisfactory and effective manner for the success of the project.
Teamwork: collaboration and cooperation is essential to efficiently execute any project, hence,
teamwork and team dynamics play an important part in the innovation project of the
organisation, Essence drinks (Laforet, 2013). The outcome of the innovative project will be
improved with high level of understanding among team members and respect for each other’s
opinion. Therefore, leaders at Essence drinks ensure that there must be positive team dynamics
that influence staff members towards the direction of successful launch of Guava lassi.
Leadership: Leaders play an important role in influencing and driving the efforts of staff at
Essence drinks towards innovative outcome of the existing products. Since, employees follow
their leaders it is essential to adopt different leadership styles for different circumstances to
ensure positive impact on the employees’ performance (Hao and Yazdanifard, 2015).
Essence drinks can foster working culture and environment with different innovative sources that
also support the mitigation of various business risks. The unexpected innovation source focuses
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on the analysis of market situations and opportunities for the Essence drinks with an extensive
research. Out of the different alternatives, the best opportunity can be identified with the help of
the incongruity source of innovating (Baglieri et al., 2014). The organisation is required to
identify the areas where there is lack of performance outcome, and eliminate such issues with the
help of Process need source. Lastly, Essence drinks is needed to identify the target customers
and consider different other relevant factors with the help of demographic source to gain success
in the innovative project, like, market trends, level of income of customers, etc. In addition, a
strict disciplinary environment is essential within Essence drinks to develop an innovative
environment where employees put their hard work and avoid idle time. It also requires
appropriate training, and mentoring the staff to guide them in their individual tasks of innovation.
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LO2
P3 explain the 4Ps of innovation and explain the use of the innovation funnel to examine and
shape innovative ideas
The 4Ps of innovation help the Essence drinks to identify where it is and how it can identify new
ways of innovation to improve its existing product and gain strategic advantage.
Product: The prime focus of Essence drinks is on the taste of lassi product that offer healthier
benefits to the people. Hence, the new taste in drinks lead the success of the organisation,
however, continuous improvement is essential to maintain the brand image and success of the
organisation in the UK. The new innovation is the present lassi can be made with the Guava
flavour in it (Anderson, 2013).
Process: this factor covers the supply chain process and the entre internal management process
to finally make available Guava lassi to the customers. For example, the improvement of present
sales of Essence drinks can be made through the packaging of lassi with the tetra pack and
availability of products at online platform. In addition, the new innovation requires recruitment
more skilled employees to execute the project efficiently.
Figure 2: 4 Ps of Innovation
(Source: Innovation Space 4Ps, 2017)
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Position: The positioning strategy of Essence drinks must be effective that ultimately support the
customer attraction and satisfaction (Anderson, 2014). For example, the organisation can take
innovative steps for marketing the products or digital media to reach millions of customers to
make them aware about the new taste and healthy drink with Guava flavour.
Paradigm: This factor refers to the change in the existing business process to influence the
customer behaviour and mindset. For example, the innovation project will ensure value addition
in the existing product and hence, it can raise high prices for it. However, it is essential to make
people aware about the new innovative tastes and quality so that people can willingly purchase it
at high prices.
Innovation funnel importance
It refers to a tool that can help Essence drinks in taking better innovation decisions. Innovation
funnel focuses on the generation of ideas as many as possible, out of which few of the ideas are
selected, refined and transformed into concrete and effective development plans. The innovation
funnel is important for Essence drinks, in which the Research and development department
analyses the market opportunities and develop various ideas in relation to the product innovation
in consideration of target customers and market trend (Hakkarainen and Talonen, 2014). After
the ideation stage, top ideas are picked up and evaluated against the benchmark and customer
feedback. The successful testing of the innovation can help the Essence drinks to launch its
product of Guava lassi in a successful and effective manner.
P4 Explain developments in frugal innovation and provide examples of how it is used in an
organizational context
The business environment consists of diverse range of risks associated with the resources
allocation, and hence, it ultimately impact the decision making process of Essence drinks. The
limitations pertaining to different resources, like, material, financial, etc can be effectively
responded with the frugal innovation in which range of methods are utilised to transform the
limitations into competitive advantage (Bhatti t al., 2013).
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Figure 3: Frugal innovation and its relevant aspects
(Source: Frugal innovation, 2019)
Stages involved in frugal innovation:
Key issue: The major problem that Essence drinks faces in his innovation process is to change
the taste of lassi from Mango to Guava. In the beginning new tastes and products are generally
not preferred by customers and hence, it may impact the initial sales of Essence drinks.
Customers are switching to other brands to get their drinking products that lead to reduction in
the sales of lassi. Hence, frugal innovation is essential for the organisation to identify the major
reason behind the sales reduction with the help of appropriate market research and customer
preference analysis.
Solution: The solution to the issue of sales reduction can be identified with the development of
appropriate marketing strategy. Customers can best help the organisation in identifying the
solution of sales reduction (Brem and Ivens, 2013). Essence drinks can organise campaigns and
events to make customer aware about the new flavour of lassi introduced by the organisation.
The customers can be involved in the marketing campaigns and the organisation can get their
feedback to improve their strategic decisions.
Application of frugal innovation: The frugal innovation can help the organisation in achieving
the innovation outcome efficiently. The organisation can use mobile phones, social media and
other internet devices to improve the customer purchasing intention with cost efficient approach.
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LO3
P5 Explain the importance of the commercial funnel and the application of new product
development (NPD) processing for commercialisation of innovation
Commercial funnel and its importance
It is a strategic process that helps Essence drinks to identify thousands of people through
marketing and promotional activities, and identify the target customers that will ultimately buy
the products. There are four phases of commercial funnel that leads to ultimate buying decisions
of customers. Attract phase focuses on marketing activities that attract the customers on the
website of Essence drinks (Sale funnel, 2019). Convert phase focuses on different promotional
schemes and marketing tactics to influence the visitors in sharing their personal contact
information. Close phase focuses on efforts to make the visitors, paying customers of Essence
drinks. The last delight phase emphasis on the quality services to make customers long term
associated with the organisation and inspire referrals.
Figure 4: Phases under commercial funnel
(Source: Pronto Marketing, 2019)
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