Retail Innovation: A Business Case Analysis of Walmart & Iceland Foods

This report delves into the innovation and commercialisation strategies employed by Walmart and Iceland Foods Ltd, two prominent grocery retailers. It examines how these organisations source and foster innovation, drawing upon Peter Drucker's seven sources of innovation, including unexpected events, incongruities, process needs, industry and market structure changes, demographics, changes in perception, and new knowledge. The report differentiates between various types of innovation—product, position, paradigm, and process—and evaluates their implementation within each organisation. It also presents a detailed business case for innovation, considering risks, benefits, and funding arrangements, and assesses the tools used to develop, retain, and protect intellectual property rights. The analysis highlights the successes and failures of innovative practices, ultimately providing insights into how these strategies contribute to each company's competitive advantage and market position.

Innovation and
Commercialisation

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
PART 1. EXPLORE EXISTING CASES OF INNOVATION.......................................................1
TASK 1............................................................................................................................................1
P1. Ways in which different organisations source and foster innovation have been discussed
with the help of examples............................................................................................................1
M1. Analysing the ways in which innovation is sourced and supported within different
organizational environment and cultures.....................................................................................3
TASK 2............................................................................................................................................4
P2. Differentiation between various types of innovation and how they are processed within an
organisations:...............................................................................................................................4
M2: Evaluating how innovations are processed within differential organisational setting.........6
PART 2- INNOVATION BUSINESS CASE.................................................................................6
TASK 3............................................................................................................................................6
P3 Producing a detailed business case for innovation in respect to organisation, including
risks, benefits and was for arranging funds.................................................................................6
M3. Producing an analysis of a business case for innovation which emphasizes value of
business for potential investment.................................................................................................9
TASK 4............................................................................................................................................9
P4: Evaluation of varied tools that an organisation can use to develop, retain and protect their
intellectual rights.........................................................................................................................9
D2 Producing a commercial business case for innovation with an action plan which aids in
developing the methods for its protection in a wider business environment.............................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Innovation and commercialisation are both important factor for any organisation to
prevail in the market. Constant and updated change is required in these two fields to survive in
this competitive market. Innovation refers to the application of different theories or ideas that
would result in either introduction of new products or services or improvement in the old
produce. Likewise, commercialisation can be understood as the process of introduction of new
products or services in the market for trade or commerce related activities (Mohammadi, Rezaei
Asiabar and Babaei, 2021). For the report, selected grocery retailers are Walmart and Iceland
Foods Ltd. Walmart is a multinational retail corporation which performs business operations
with purpose of increasing its global influences and significance of its community. On the other
hand, Iceland Foods Ltd. is a supermarket chain in retail industry that works to adapt and
overcome the challenges that occurs due to changes in the market environment.
This report contains the information on the way in which innovation is sourced and
supported within different types of organisations. This tells the process of innovation prevailing
in different firms. Application of processes that are required to commercialise innovation within
an organisation. The range of methods evaluated to protect the several aspects of innovation
within the firm.
PART 1. EXPLORE EXISTING CASES OF INNOVATION
TASK 1
P1. Ways in which different organisations source and foster innovation have been discussed with
the help of examples
Sources of innovation can be understood as the impulse leading to undertake innovative
activities to achieve greater success in the market. In companies, such as Walmart and Iceland
Foods Ltd, innovation is required to come up with new ideas and technologies so as to increase
productivity. This concept can be well explained with the help of Peter Drucker's seven sources
of innovation. These sources of innovation prove to be beneficial for several firms like Iceland
Foods Ltd and Walmart Inc. in many ways, they are as follows:
 The Unexpected: Innovation can be drive through several unexpected ways such as good
side effects or failures of an event or experiment in terms of goods or services that turn
into company's favour. In Iceland Foods Ltd, innovation is sourced from various
1

unexpected situations that are shooting the animated video of an animal, that created a
huge fuss for the company. Then they used that video for advertisement purpose in which
innovation was found about advertisement of the product. While in Walmart, failure in
the introduction of new segment of clothing helped this company to maintain its niche in
the retail industyry.
 Incongruities: Incongruities emerge through the feeling of disruption that is a fight
between what is right and what ain't right. Innovation can be sourced out through these
feelings, which can further remove the difference between expectations and reality. This
helps the firms like Walmart to turn their expectation of achieving firm's goals into
reality. For Iceland Foods, at the beginning of their growing stage they faced fall in their
margins. Their innovations in reducing other costs helped the company to pass out of the
situation.
 Process needs: Weak link in any critical process can anytime turn into a substantial
improvement, which thereby leads to innovation in the process (Min, Kim and Sawng,
2020). Companies such as Iceland Foods uses several opportunistic approach in this
regard to develop a competitive edge in the market. Firms such as Walmart, has used this
source to process its operations online while they lack in any physical existence. Its
business is wholly operated on online channels and deals with the customers online, there
is no need of any physical appearance of this business.
 Industry and market structure: Industry and market structures involves continuous
change in the market in terms of innovation and commercialisation. In Walmart there is
continuous dealing with the changes that prevail in the market. Their latest innovations
are directly related with the upcoming trends. Whereas, Iceland Foods constantly look for
the opportunities to expand its market share by introducing new segments in its store to
serve more diverse economy.
 Demographics: Changing demographics in terms of age, education, disposable income
can contribute towards innovation of new ideas regarding products and services or their
processes. In Iceland Foods, there are separate counters to cater the needs of different
segments of society. On the other hand, Walmart focuses on the traditional methods for
introducing their culture and beliefs to the newer generations with advanced outlook.
2

 Changes in perception: Changes in perception, mood, tastes and preferences of people
may arise the need to constantly create new trends in the market. Many firms like
Walmart detects the several shifts in the market and leverage them according to people's
choice. In contrast, Iceland Foods incorporates health beneficiaries in one section and
also has separate protein rich elements in another.
 New knowledge: Knowledge about new technologies, discoveries and inventions may
lead a firm to stand out in a market from its competitors (Gong, Sullivan and Tang,
2021). In Iceland Foods, they stock and place prior orders to get the first mover
advantage in the ever-competing market. By the use of updated latest technology they
store the buffer of those products and seasonally sell them to their customers at lower
prices in comparison to others. For Walmart, uses latest digital techniques such as net
banking, visa cards, etc for the collection of payment.
From the above sources, we have gained a knowledge about the most beneficial sources
of innovation that would help the firm to achieve its goals and objectives. For Iceland Foods,
sources like unexpected ways or changes, process needs, demographics and new knowledge have
proven to be beneficial. In Walmart, incongruities, industry and market structures and changes in
perception are the sources of innovation used to gain a competitive edge in the market.
M1. Analysing the ways in which innovation is sourced and supported within different
organizational environment and cultures
There are different ways and means to source innovation such as unexpected,
incongruity, process need, industry and market structure change, demographic, changes in
perception and new knowledge. The managers of Walmart and Iceland foods set time to discuss
unexpected success or failures. The second source for the organisations is incongruity between
reality as it is, what is the assumption and what ought to be (Ho and Chuah, 2018). The third
source involves Innovation process based on process need which is task focused rather than
situation. The fourth source involves changes in market structure which is uncertain and grows
faster. Another source for innovation is demographics that includes changes in population, age
structures, educational structures that promote inventions. The change in perception also gets
changed regarding the product and services upon innovation.
3

TASK 2
P2. Differentiation between various types of innovation and how they are processed within an
organisations:
Innovation is a driving force that benefits the organisation in smooth functioning of its
business as well as drive through its technological aspects in order to gain competitive edge in
the market. There are 4Ps that are considered by several firms in order to stand out in a market
and gain a competitive edge in the market. There are various types of innovations and their
processes within different organisations, such as Iceland Foods and Walmart are discussed
below:
 Product Innovation: Product innovation can be referred to as subsequent change in the
existing product or introduction of a new product (McPhee, Giones and Dutta, 2019). For
this purpose, Iceland Foods has brought down a whole new section of vegetarian
supplies. This would bring the fresh supplies along with the frozen one, now customers
can get both tastes at one destination. On the other hand, Walmart is introducing a garden
centre to warehouse the necessaries for the cattle and pets. Concept of innovation helps
Walmart in staying ahead in this competitive market.
 Position Innovation: Position innovation refers to the positioning of a firm and its
products in a competitive market. It can be done through changing the perception of the
customers in context to the brand image. For achieving this objective, the firm focuses on
its promotional activities in the manner to increase its customer base. They compensate
this factor by directly engaging with their customers on social media to understand their
needs better. On contrary, Walmart have a corner that cooks taste bits for the customers
that provide them with the better taste and understanding of their produce. This will also
teach them the best way to prepare these special kind of meats and fishes. The facility
they are providing their customers would increase their customer base and overall
position of their business in the market.
 Paradigm Innovation: Paradigm innovation can be understood as a shift in the mental
process or thinking abilities or perception of the minds that prevail in the market. These
can be based on the beliefs, assumptions or values that make up the way through people's
perspectives. People nowadays are more concerned about time and accessibility, so the
companies like Iceland Foods have introduced a keen system of delivery. They delivers
4

the fresh as well as their frozen produce at the doorstep of their customers which
facilitates them with time efficiency. In contrast, Walmart uses online channels to
connect with its customers which provides them with accessibility but is time consuming.
 Process Innovation: Process innovation is the implementation of a new or significantly
improve existing production or delivery method. It can be introduced inside a firm in the
form of automation in manufacturing process. Application of process innovation into
Iceland Foods can be done by opening feedback channels. Feedback channels would
gather the information from the customers and channelize it towards improving the
quality of its operations. Managers in Walmart are making innovations in their processes
by adopting artificial intelligence techniques and have made commendable presence in
online grocery market.
Critical evaluation of success or failure of innovative practices of each retailer:
In context to Iceland Foods Ltd, paradigm and position innovation proves to be the most
beneficial one. It helps the firm to achieve success in the short as well as long run by focusing on
its objectives of promotional activities in the manner to increase its customer base (Eckhardt,
Ciuchta and Carpenter, 2018). By directly engaging with their customers on social media they
get to understand the needs of its customers in a better way. People nowadays are more
concerned about time and accessibility, they delivers fresh as well as frozen produce at the
doorstep of their customers which facilitates them with time efficiency. They have served more
than £13.5 million till now, and targeting more customer sections. Companies like Iceland
Foods, applies innovation in several different forms to adapt and overcome the challenges of
change.
In context to Walmart, product and process innovation proves to be beneficial for
achieving its organisational success. With the help of product innovation, Walmart has
introduced a garden centre to warehouse the necessaries for the cattle and the pets. Concept of
innovation helps this company in staying ahead in this competitive market. The concept of
innovation proves to be beneficial for Walmart to increase its global influences and significance
of its community. This would help this company to generate more revenue, increase its
efficiency and reduce production costs. The company generated about US$ 572.8 billion, and net
income of about US$13.67 billion.
5

M2: Evaluating how innovations are processed within differential organisational setting
There are different types of innovations which are successfully processed within different
organisations (Fujiwara and Collins, 2019) . The managers of Iceland foods introduced new
section of vegetarian supply as product innovation, they brought keen system of delivery of
products and services as paradigm innovation, the process innovation for the organisation
includes opening feedback channels for customers. The managers of Walmart are introducing
garden centre as product innovation to warehouse the needs of cattle and pets which will help
them to stay forward in the competitive environment. Walmart have a corner as position
innovation which cooks taste bite that help the managers to provide better taste to their
customers. The paradigm innovation of Walmart involves online channels to connect with
customers to provide them better services and assistance. The managers of Walmart are using
process like artificial intelligence which has made commendable presence in online grocery
market.
PART 2- INNOVATION BUSINESS CASE
TASK 3
P3 Producing a detailed business case for innovation in respect to organisation, including risks,
benefits and was for arranging funds
Business case is an oral or written document that for obtaining justification for handling
and controlling different actions like project tackling and portfolio management (Pekovic,
Grolleau and Mzoughi, 2020). It helps the decision makers to take actions for evaluation the best
option that influence the rationale choices in business organisation. Walmart Inc. is an American
corporation that operates in the market of United States. It is headquartered in Bentonville,
Arkansas. The business case in context to Walmart Inc. that helps to develop their online
database are given below:
Company name: Walmart Inc.
Executive summary: This business case is prepared for Walmart Inc. for evaluating their
organisational risk, benefits and ways helps in assessment of funds. It also includes vision and
mission statements given by the company to enhance their growth and profitability in the retail
industry.
6

Vision statement: The vision of Walmart Inc. says that busy families can have to feel
easier for shopping. They frame their business strategies to make things easier for the people
who does not have enough time to spend.
Mission statement: The mission of Walmart Inc. is to help people across the globe to
save money and obtaining better lifestyle. They have expanded retails stores which make easy
availability of their products and services.
Innovative Products and process: Innovation is a key element for every business
organisation to compete in the market. The innovative products help company to gain
competitive advantage over the other businesses. Walmart Inc. also introduced their innovative
service as Walmart Go-local. It helps them to enhance their delivery service in the market. The
process of innovation includes research and development strategies. Management have to do
proper research for bringing innovative ideas into action.
Risks: It is the futuristic concept which states about arising of uncertainty in the business
organisation. Risk is the only element which is very common to be present in every business.
The kind of risk presents in Walmart Inc. is described under as:
 Strategic risk: Walmart Inc. have expertise management in their organisation which
makes efficient strategies for their growth and expansion. Their strategies have very less
chances to be faulty so there is low strategic risk.
 Operational risk: The day to day activities of Walmart Inc. can be affected through
internal or external actors so, there is moderate level of operational risk in the business
organisation.
 Compliance risk: The Walmart Inc. obeys all the rules and regulations framed by
authorised bodies that helps them to create reputed brand image in the market.
Considering legal factors in business may also leads in government support.
Benefits: There are so many benefits occur to Walmart Inc. by using their innovative
service as Walmart Go-local. It helps them to deliver goods faster which attracts the customers
and influence profitability in business.
Funding: Every business needs funds to operate in day to day activities in their
organisation, for this they need funding (Fidel, Schlesinger and Emilo, 2018) . Walmart Inc. opt
some ways for accessing funds that are given below as:
7

 Retained earnings: Walmart Inc. use the funds available after earning profit and
deducting expenses. They invest these funds to minimise strategical risk and opening
different stores in the market.
 Debt capital: Walmart Inc. also borrows funds from the public through shares, corporate
bonds and debentures. These funds are invested by them in various activities like
improving infrastructure, new projects and many others.
Evaluation and monitoring: There are two methods opt by Walmart for evaluating and
monitoring the business decisions which are given below as: KPI: Walmart Inc. use key performance indicators to demonstrate that how effectively
their business is obtaining the organisational goals in the competitive market. KPI
includes SMART objectives also. Benchmarking: Walmart Inc. also uses benchmarking process that helps them to analyse
performance of their products and services against the other competitive businesses.
Benchmarking helps them to identify internal merits that can improve the business.
Recommended innovative products/processes for a new online grocery retailer, supported by
innovation risk and benefit analysis
Innovation can help the businesses to compete aggressively in the market. It enhances
growth and sustainability in the organisation (Götz, Hohler and Benz, 2018). Walmart Inc. have
very big competitors in the different economies as they are operating with their business
internationally. The innovative strategy of Walmart Go-local can helps to minimise their
operational risk. Having proper delivery channels and modes can make supply of their products
easier. Apart from reducing risk, it can also have different benefits in the business. Due to
influencing delivery services through innovative strategy, Walmart Inc. can also enjoy benefits
of customer attraction and high profitability in the retail industry of US.
Suggestion of funding channels for the recommended innovation, supported by analysis of
business value for potential investment.
Every innovation always needs funds of capital to be invested into it. As Walmart Go-
local also requires funding to implement the innovative idea for business development. They
have to do proper expenditure for making their warehouses and delivery channels at different
areas. Expenditure on improvement of delivery can meet through business loans taken by public
sector or private sector bank. Walmart Inc. can arrange funds for developing delivery services by
8

the loans. These loans can provide low interest rates to the business organisation. Besides the
business loan they can also use debt funding and retain earning for meeting expenses of delivery
enhancement.
M3. Producing an analysis of a business case for innovation which emphasizes value of business
for potential investment
Business case is an efficient document that helps organisation to influence proper and
systematic evaluation business projects and investment that provides value to their potential. Use
of business case helps Walmart Inc. in choosing proper funding and strategies to minimise their
risks. The management also this document to influence innovations into their organisation for
maintaining sustainability in the competitive market. Business can introduce new product and
service by using business case with choosing funding channels and other benefits to Walmart
Inc.
TASK 4
P4: Evaluation of varied tools that an organisation can use to develop, retain and protect their
intellectual rights
Intellectual property rights can be referred to as a legal rights provided to the creator to
protect it from any sort of duplication. They are specific type of rights that are provided to
individuals or organisations for a unique creation or idea. These rights are an aid for the
organisations to protect their idea for the rationale of branding, marketing, etc. They also
safeguard this from the piracy and for maintaining competitive advantage in the market. Varied
tools that can be used by Walmart in order to develop and retain their intellectual property are
mentioned below:
 Patent: Patents are exclusive rights that are granted for an invention or a creation in
terms of a product or a process, offering a new technical solution to a problem (Parast,
Sabahi and Kamalahmadi, 2019). Walmart has issued patents on their exclusive market
plan to easily commercialise their products and services. They seem to be really difficult
to acquire and are for limited time only, this proves to be a big hassle for Walmart.
 Copyrights: Copyrights can be termed as an intellectual property that protects the
originality of an organisational work as soon as they fix their work in a tangible form.
Their primary objective lives with rewarding the authors to protect their work from being
9

stolen. It helps the Walmart to modify, remake or distribute their content on their
websites and company blogs. But, there is always some level of ambiguity in knowing
exactly what factors bring copyright infringement.
 Trademark: Trademarks are signs or symbols that a company uses for differentiating its
goods or services from the other businesses. It protects the status or legacy and restricts
other businesses from trespassing on the intellectual properties of a business entity. It is
an effective mitigation tool for the companies like Walmart to collect passive revenue
from its brand publicity. This can often result into the comparatively lesser quality, it
proves to be a compromise in quality while aiming at larger sales on ground.
M4. Critical evaluation of differential tools that are used by businesses for developing and
protecting their intellectual rights in relation to wider business environment
This can be critically evaluated in terms of Walmart, the different tools that can be used
in a business organisation for the development and protection of their intellectual rights. Walmart
uses different tools such as patents, copyrights and trademarks for protection of its intellectual
property rights. Trademarks are the one that proves to be extremely beneficial for the firm in
order to collect passive revenue (Ho and Chuah, 2018). They too come with the disadvantage of
providing lesser quality to their customers. Despite this, patents are the exclusive market plan for
Walmart to easily commercialise their products and services. But, they seem to be really difficult
to acquire and are for limited time only. The other one includes copyrights that protects the status
or legacy of a business and protects their intellectual properties from being stolen. This can call
for the problem of copyright infringement.
D2 Producing a commercial business case for innovation with an action plan which aids in
developing the methods for its protection in a wider business environment
The management of every business organisation have their direct focus on strategies that
enhance innovation for growth and development in competitive market. Innovative ideas help
business to gain competitive advantages in the business. Business case is the element that
delivers the action plans and innovative strategies for development of organisation. As in
Walmart Inc., the company made business case to bring their innovative strategic plan into
action. Their innovative plan is named as Walmart Go-local which helps them to improve their
delivery system. The management can also register their innovation through patent. It makes
10