Icon College HND Business: Innovation and Commercialisation Report

This report delves into the concepts of innovation and commercialisation within the context of Tesco, a multinational retail giant. It begins by defining innovation and invention, outlining their importance, and then explores organizational vision, leadership, teamwork, and culture as crucial elements in shaping innovation. The report then examines the 4Ps of innovation (product, process, positioning, and paradigm) and the innovation funnel, followed by an analysis of frugal innovation. Furthermore, it assesses the significance of the commercial funnel and new product development (NPD) process, including a business case study for Tesco and potential funding sources. The report concludes by investigating the tools Tesco employs to develop, retain, and protect knowledge and intellectual property. Overall, the report provides a comprehensive overview of how innovation and commercialisation principles are applied in a real-world business setting.

INNOVATION AND
COMMERCIALISATION

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
LO1..................................................................................................................................................4
P1 Innovation and invention......................................................................................................4
P2 Organizational vision, teamwork, leadership and culture for shaping innovation................6
LO2..................................................................................................................................................8
P3 4Ps of innovation and innovation funnel...............................................................................8
P4 Frugal innovation ................................................................................................................10
LO3................................................................................................................................................11
P5. Importance of commercial funnel and application of new product development...............11
P6. Business case for Tesco including ways to access funding................................................13
LO4................................................................................................................................................16
P7. Different tools used by Tesco to develop, retain, protect knowledge and intellectual
property.....................................................................................................................................16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Innovation is primarily the process which helps the organizations to generate the seeds of
ideas and turn them into action for achieving the long-term goals. Commercialisation is
methodology for incorporating the new product and service into organization and sell it on the
large platform.
TESCO is primarily the multinational groceries as well as general merchandise being
established in 1919 by Jack Cohen and headquartered in London, UK. It is the renowned retail
organization which have its presence in more than 10 countries.
This report gives a brief about Innovation and invention, organizational vision,
teamwork, leadership and culture for shaping innovation, 4Ps of innovation and innovation
funnel, frugal innovation, importance of commercial funnel and NPD process, innovation
business case and tools for protecting IP and knowledge.
MAIN BODY
LO1
P1 Innovation and invention
Innovation
Innovation is basically the process through which organizations are able to develop new
ideas as well as creative thoughts which eventually helps them to meet the new requirements of
customers and gain competitive advantage (Dincer, 2017). The main importance of innovation in
the organization are
Invention
Invention is predominately the process of of building something different and new like
new methods, processes, products which have not been in operation before or is different from
the existing ones. The main importance of invention are

Innovation Invention
Increasing productivity
This is one of the most remarkable
importance of innovation which helps TESCO
to sustain the competitive advantage and hence
improve their overall performance in the
marketplace. When the organization innovate
any of its aspects like products, services,
structure then it eventually increases the
productivity of the organization due to the the
fulfilment of all needs and demands of
customers (Do and et.al.,2018). Thus,
innovation helps TESCO to improve its
productivity and gain large market share. For
example- When TESCO launched its own
mobile application and innovated its website
then it raised the visitors to more than 32.1%
and this increased the productivity of the
organization.
Fulfilling the needs and demands
This is one of the astonishing feature
and importance of invention which helps the
organizations to go beyond the expectations of
customers. Invention is mainly done when
organizations notices that the needs and
expectations of customers are changing
frequently and each and every day, people look
for new things which will resolve all their
problems (Mazzarol and Reboud, 2017). Thus,
invention helps to fulfil the needs of the
customers. For example- When TESCO find
out that the process of producing biodegradable
bottles is not feasible enough then company
invented different method which will on one
hand will be feasible and on the other hand will
comply to environmental laws.
Beating competition
This is the another importance of
innovation which assists organizations to gain
the competitive advantage and thus survive in
the cut-throat competition (Johannessen,
2017). When TESCO will put a little amount
of creativity ad well as innovation in its
products and services and will offer a
completely differentiated product then this will
help the company to better position itself in the
market and will help to grow their business.
Increasing business performance
Invention is also important from the
business point of view and assist the firms to
enhance their overall performance. Through
invention, the organization is able to gain
goodwill in market which in turn help them to
increase their productivity. Invention plays an
important role in improving the overall
performance of the organization (Pynnönen,
Hallikas and Immonen, 2019). For example-
When TESCO launched its smartshop for the

For example- When TESCO first came up with
biodegradable plastic bottles then which was
not offered by any of its competitors like
Sainsbury, Asda etc. then it enabled TESCO to
become a pioneer in safeguarding the
environment and helped to achieve competitive
advantage.
supermarket where customers can purchase
their grocery item, then this eventually
increased the sale of the company and hence
increased its performance.
Solving issues and problems
Innovation is not only made to enhance
the business performance or to gain
competitive advantage but it also helps the
organizations to solve complex issues which
are unable to be solved by traditional methods
(Amponsah and Adams, 2017). When
organization encounters the problems the it
leads to the generation of new ideas which will
prove to be effective for solving these issues.
Improving company culture
Invention is one of the most important
source which fosters the organization's culture
and hence builds the culture of creativity.
When the organization is continuously engaged
in invention any aspect of its business like
products, services, organizational culture then
this creates a sense of co-operation among
employees (Monotti, 2017). This in turn leads
to the development of passionate and
enthusiastic organizational culture. For
example- TESCO after inventing the new and
efficient wage system for its workers was able
to build a confidence among workers which
eventually helped them to establish a good
position in market.
P2 Organizational vision, teamwork, leadership and culture for shaping innovation
Commercialisation is basically the process and methodology through which the
organizations brings new and different products and services within market to achieve the
organizational goals.
Organizational vision
Vision is predominately the statement which articulates and highlights the path which the
organization have to take for achieving its long-run goals. The organizational vision plays an

important role in shaping innovation and commercialisation by having a profound effect upon
the business. Like the vision of TESCO is to become renowned and highly valued organization
through better serving the customers and working towards interest of stakeholders (Daellenbach,
Davenport and Ruckstuhl, 2017). In order to achieve this vision, innovation & commercialisation
will contribute to a great extent. For example- By innovating its products and services like
simplifying the purchasing process through advanced technology, the customer base of the
organization will enlarge and thus their long term vision will take an another turns towards
success.
Leadership
Leadership is basically the art and way of motivating the group of people in order to
make them competent enough for achieving organizational goals. The role of leadership in
innovation and commercialization is highly imperative and thus helps to transform the business
in a great way. The success of the organization and innovation depends on the style which
leaders of the organization adopts and is dependent on their temperament (Wonglimpiyarat and
Chandrachai, 2016). For example- when the leaders of TESCO changes their leadership style as
per the situation like participative style during innovating the product and solicit the suggestions
of all the employees for making this innovation successful then this will lead innovation in
positive direction. On the other hand, when leaders are constantly engaged in controlling the
employees and dominating them then employees will not contribute towards innovation and
commercialization and the innovation will not be worth.
Organizational culture
Organizational culture is the values, beliefs and behaviours which helps to create and
environment of psychological well-being. Organizational culture is considered as one of the
most important factors which can lead innovation and commercialisation in positive as well as
negative direction. For example- When TESCO will have the cooperative organizational culture
where all the employees work inn teams and makes an equal contribution towards innovation
then this will help the organization to make the particular innovation worth and valuable. On the
other hand, when TESCO have organizational culture where the top management always
dominates and exercises their power in negative way then this will lead innovation in negative
direction (Yazdimoghaddam, Owlia and Bandarian, 2019).

Teamwork
Teamwork is primarily the cooperative efforts which a group of people exerts for
accomplishing a particular task and woks towards a similar goal. Teamwork helps to shape
innovation and commercialisation in a great way and thus helps TESCO to transform its
business. For example- when the employees of TESCO works in a team for a particular task of
innovating the product and have a good understanding of each other's perspective along with
effectively communicating with each other then that task will be accomplished more effectively.
On contrary to this, when employees of TESCO will work in team where no team member
respects the perspective of another and is engaged in unhealthy competition then the goal of
innovating the product will not be achieved (Hamada, 2017).
M1
There are various sources of innovation that helps the organizations to achieve
competitive advantage.
The unexpected
It addressees that innovation is basically the seeds of unexpectations and occurs
unexpectedly without any preparation. According to this, organizations does not prepares for
innovation initially and earlier.
Incongruity
this is another source of innovation which shows that what is the requirement of
innovation and how the innovation should look. This basically stresses that when the need is in-
congruent along with supply then it gives rise to innovation.
Besides this, the organisational culture, leadership, teamwork plays an important role in
shaping innovation. Each and every aspect contribute on its part for making innovation
successful.
LO2
P3 4Ps of innovation and innovation funnel
Innovation is is basically the model which enables the organizations to understand what are the
aspects of innovation and how an innovation occurs.
Product

Product is primarily the tangible thing which the organizations decide to innovate for
fulfilling the customer needs and for resolving the problem (Rus and et.al.,2019). For example-
When TESCO find out that plastic is non-biodegradable and this causes environmental problems
as well as affect the human heath, then the company decided to innovate a product which will be
a solution to this problem which is biodegradable water bottles. As water is the most important
source of survival on earth thus it is the essential to keep it fresh and healthy thus analysing this
problem, TESCO decided to launch these biodegradable water bottles.
Process
Process is generally how the organizations create as well as deliver the innovative
offering. This is one of the most important part of the innovation mix which helps the
organizations to have a consistent process. For example- For making the innovation of
biodegradable water bottles a success, TESCO will make the production process more consistent
and will implement implement the approaches of operation management for reducing waste.
Besides this, the company will improve the services of the production department (Azarmi,
2016).
Positioning
Positioning is basically the place which the brand have in the market and addresses the
way organization targets its offerings to the wide customers. This is the another important mix of
the innovation which helps organizations to gain competitive advantage. For example- For
promoting its biodegradable water bottles, TESCO shifted its focus to another segment and thus
targeted all class groups and generally youth and adults who are highly health freak and thus are
willing to spend money for healthy products (O’Gorman and Donnelly, 2016).
Paradigm
Paradigm basically shows the how the organizations frame as what they are doing. In
short, paradigm is change in way something is done within the organization. For example- In
promoting these biodegradable water bottles, TESCO shifted its focus from online application to
offline marketing where they made use of word-of-mouth. Thus through this, these water bottles
were being advertised. Besides this, there has been a paradigm shift of TESCO from grocery
retail store to healthy drinking products (Mohalajeng and Kroon, 2016).
Innovation funnel

Innovation funnel is predominately the mechanism which helps the organisation to have a
consistent stream of the ideas which are later ion screened in terms of their viability. This funnel
plays an important role in establishing the position of organization in market and thus helps to
achieve competitive advantage. There are wide use of innovation which has helped TESCO
Gathering ideas
The first step of the innovation funnel which is its mouth mainly helps the organization to
gather as much ideas and suggestions as possible. This mouth of funnel has helped TESCO to
generate a wide range of ideas for their biodegradable water bottles. For example- TESCO
gathered information from market, competitors, and other source (Liu, 2017).
Matching ideas with organizational objectives
Once the ideas have been collected, this funnel helps the organizations to screen them
and thus filter the most effective ideas which are in congruence with the goals or objectives. For
example- after analysing the cost and risk factors, TESCO find out that customers are constantly
looking for healthy products and even competitors are endeavouring to build sustainable
products thus the company selected the idea of producing biodegradable water bottles. This
matches with its goals which is to attain competitive advantage (Schot and Steinmueller, 2016).
Achieving organizational objectives
The third stage of the innovation funnel helps the organisation to ensure that ideas are in
tune with business objectives. For example- TESCO find out that launching biodegradable water
bottles will help to achieve their most important objective which is enlarging customer base.
M2
Innovation funnel plays an important role in the organization and thus helps to generate
new ideas for innovation. This funnel has been used in TESCO where organization gathered the
various ideas from the market on what aspect to innovate and after analysing these ideas and its
goals find out that producing biodegradable water bottles will help them to achieve their strategic
objectives. Thus, this funnel helped them to produce innovative product which is biodegradable
water bottles to achieve their long-term goals.
P4 Frugal innovation
Frugal innovation is basically the process of decreasing complexity as well as cost of the
products along with its production. In short, frugal innovation mainly concerns with removing
the non-essential features and characteristics from the goods and then sell it to the different

developing countries (Bandarian, 2018). The most recent development which has taken place in
this frugal innovation is the development of technology platform. This frugal innovation has
created a platform for the organizations to reduce cost of producing goods and products and have
presented wide opportunities to innovate a number of aspects. Besides this, the another
development which has taken place in this frugal innovation is fast growing markets. Due to the
frugal innovation, organizations are able to design the products at huge volume and reduced cost.
This innovation has helped the wide range of organisations to increase their performance by
inculcating a great level of creativity in products and satisfying the needs and demands of
customers. These wide range of developments in frugal innovation have prove to be effective for
companies and has allowed them to maximise their quality at much less cost.
This frugal innovation is widely used in the organizations and helps them to enhance their
overall productivity along with cutting down their entire cost. This innovation has been utilized
by TESCO while producing its new innovative product which was biodegradable water bottles.
TESCO took its advantage and thus released it at very low cost in market. When TECO decided
to launch its first biodegradable water bottles then it targeted each and every market segment and
thus kept its price low. Through the use of frugal innovation, TESCO removed a large range of
non-essential features from the bottles which cost high and were common between them and
competitors. For example- the production department removed the copolyster coating which
mainly provides rigidity to the bottles and replaced it with the stainless steel which is highly cost
effective and perform the same function as that of copolyester (Çengel, 2017). Therefore, in this
way company reduces its production cost and build the bottles which are highly durable as well
as cost effective. This frugal innovation helped TESCO to produce this innovative product at
much low cost and the management cut down its cost in order to target all the market segment
ranging from lower income class to higher income class. Besides this, low cost of production
enabled TESCO to produce thee bottles in bulk volume to sell in the developing countries.
M3
The role of frugal innovation is highly imperative in TESCO and has helped the
organisation to produce their products and services at much lower cost. The major role which
frugal innovation plays in TESCO is the cost cutter where it helps the organization to remove the
waste characteristics from products and reduce the cost of producing it. Besides this, another role
which this innovation plays in TESCO is increasing competitive advantage. When TESCO

provides the products at low cost without compromising the quality then it eventually enlarges its
customer base and this helps them to attain competitive advantage.
LO3
P5. Importance of commercial funnel and application of new product development
Commercial funnel: It can be defined as that funnel that is being managed and controlled
by the marketing department. In this the marketing department has the responsibility to transform
the targeted consumers into leads. This funnel is basically used by various organizations to
increase the sales of product. Using this type of funnel is of utmost importance as it can support
Tesco in increasing the growth of their business. This process basically includes selling the
goods and services to ultimate buyers (Schot and Steinmueller, 2018).
Importance of commercial funnel
Commercial funnel can support Tesco in selecting a marketing strategy. It makes them better
understand that which marketing strategy is beneficial to business, Thus, it makes prompt
for Tesco to engage customers towards their products goods and services.
Commercial funnel also helps Tesco in getting engaged with consumers. In this company can
make use of various marketing actions like for example automated emails, videos and
articles so that they can get directly connected with consumers. This will also assist Tesco in
better analysing needs and demands of customers. Tesco when using commercial funnel can
also increase sales of their new and innovative product and service (Dincer, 2017).
Application of new product development for commercialization and innovation
New product development can be defined as that process in which company is been engaged
in bringing up the total new idea or product into market place. There are various stages that is
being included in NPD process. These are as follows:
Idea Generation: In this stage innovators of Tesco will be involved in defining the goals
and objectives of business. They will be engaged in bringing out the new and creative idea in
order to mark their presence in market. In this process innovators can also ask for advices from
consumers (Do and et.al.,2018).
Idea Screening; Once the idea is being generated then screening of idea will take place. In
this stage innovators of Tesco will be involved in identifying if the existing plant and machinery
will be able to produce the new product or not or do they need to invest in new machines. If
answers to these are positive, then idea is being carried forward.

Concept Testing: In this stage innovators of Tesco will be being involved in making sure
that do the consumers need is being satisfied by this product or not. They will also analyse do
consumers are able to understand the product service. For this Tesco can also involve in doing a
small survey.
Business analysis; It is one of the most important step in process. In this Tesco will be
involved in analysing if the product which is produced by them is profitable in future or not.
They will also analyse that if competitors of this good exist in market or not (Mazzarol and
Reboud, 2017).
Product development: In this stage, Tesco will be involved in introducing the
biodegradable water bottle in market. In this marketing department will be responsible to make
consumers aware about the new idea.
Test marketing: In this stage biodegradable water bottle by Tesco will be introduced only
to small market, if results are positive in small market then it will be moved in large market. Test
marketing can support firm in reducing risk which is being involved in large scale marketing
(Johannessen, 2017).
Commercialization: In this stage Tesco will be engaged in commercialising new
innovation with the help of social media channels like Facebook, Instagram. They will also
promote through advertisement in Television, newspaper etc.
Review of market performance: Success can be review by Tesco by analysing the
profitability made by them. They will also analyse demand of biodegradable water bottle in this
stage.
P6. Business case for Tesco including ways to access funding
Innovative Business case for the new product development in Tesco. It includes the
following steps:
Product/Service: Tesco is being involved in bringing out new product that is
biodegradable water bottle. In this company is making sure that use of plastic in country is being
reduced. These water bottles will be available at really affordable prices of all stores of Tesco.
They will also ask other wholesalers and retailers to engage in distributing these renewable
bottles. Company will make sure that they reach out large range of consumers (Pynnönen,
Hallikas and Immonen, 2019).