Icon College - Unit 8: Innovation and Commercialisation Report - Tesco

This report provides a comprehensive analysis of Tesco's innovation and commercialization strategies within the UK retail market. It begins by defining innovation and invention, highlighting their importance to organizations like Tesco, and differentiating between the two concepts. The report then examines the influence of organizational culture, leadership, vision, and teamwork on Tesco's innovation processes. It delves into the 4 Ps of innovation (Product, Process, Position, and Paradigm) and their application, alongside the use of the innovation funnel. Furthermore, the report evaluates developments in frugal innovation, using examples such as the Apple iPhone SE, and analyzes the importance of the commercial funnel in the context of Tesco's product development. The report concludes with a discussion of the key factors driving Tesco's innovative approach and its implications for the company's success within the retail industry.

Innovation and
Commercialisation

INTRODUCTION
Innovation is the process through which additional value is added to goods and
services that are already present and available in the market in order to increase the
product's performance and efficiency, while also enhancing the overall value these
goods and services provide to the customers within the consumer markets of UK (Duan,
Cao and Edwards, 2020). This report assesses the innovation operations of Tesco,
which is an international business organisation operating in retail sector that specialises
in selling general merchandises and groceries to the public within retail markets of UK.
The business was founded in 1919 with Hertfordshire, England being its headquarters.
Owing to its successful operations within the retail sector for long duration of time has
presented Tesco with various opportunities to grow their operations to international
markets, with Tesco now operating 6,800 distinct establishments in 11 different
countries.
MAIN BODY
P1 Comparing the Concept and Importance of Innovation with Invention in
Organisations
Innovation:
Innovation is the strategic process of translating or converting an invention or an idea
into a consumer service or product in such a way that it provides the customers with
additional value for which they can pay. The process of innovation includes imagination
and creativity to think of new innovative ideas, application of new information or
technology and an inherent initiative towards generating increased value from existing
and available resources, goods and services within the markets. Innovation also
includes the processes through which new innovative ideas and thinking are generated,
created, which results in the conversion of these into valuable useful products for the
consumers (Kahn, 2018). Innovation of new goods and services is of immense
importance for the increased performance, efficiency, operational and financial
performance of Tesco within the UK’s retail sector because not only does innovation of
new products allow Tesco to service a greater number of retail customers with efficiency
towards satisfying their diverse needs and requirements, it also provides Tesco with a
sustainable competitive advantage against their industry competitors allowing for Tesco

to operate successfully within retain markets and increase their total market share and
user base metrics.
Invention:
Contrastingly, invention is the strategic product development and engineering
process through which a new idea, service, product or technology is created or
designed, the likes of which were not present in the markets prior to the invention.
Invention of completely new ideas, goods, technologies or processes can result in
radical breakthroughs within the industries of the world. This is why inventions are also
of immense importance and significance within businesses as these pave way for goods
and products that are novel, unique and never seen before by the consumers in
operational markets. Inventions can be patented by the creator in order to maintain and
protect their intellectual property rights.
Differences Between Innovation and Invention:
 Innovation is the strategic process through which additional value is added to the
goods and services which are already present and available in the marketplace
for consumers to purchase. On the other hand invention is the strategic process
of designing and creating a new idea, technology, good or service the likes of
which were not present in the marketplace for consumers to purchase, prior to
the invention operation.
 Innovation process results in goods or services that possess increased
performance, efficiency or value to their patent goods and only result in additional
value being generated from existing goods and services within the consumer
markets (Koch and Guceri-Ucar, 2017). On the other hand, invention process
results in the creation of completely new goods and services which were not
present at all within consumer markets, allowing for inventions to have the
potential for radical breakthroughs in various industries of the world.
For any business organisation including Tesco, there are present primarily four
main sources through which innovation operations can occur. Within the business
organisation, these sources of innovations relate to unexpected occurrences within the
organisation, incongruities within the business, processing needs and changes within

the operational markets or industries within which the business organisation operates in.
New technological paradigms or solutions being made available in the market can also
act as a source of innovation within business organisations such as Tesco.
P2 Influence of Organisational Culture, Leadership, Vision and Teamwork Towards
Innovation and Commercialisation
The organisational leadership, vulture, vision and teamwork that is possessed by
Tesco has immense impact and effectively shapes the innovation and
commercialisation operations of the business in the following ways:
Leadership: The organisational leadership that is present and possessed by Tesco has
significant impact towards shaping the innovation and commercialisation operations
within the business organisation. The leadership style or apprach that is used by
Tesco's leaders is required to encourage and place emphasis on innovations within the
business organisation by providing their employees with operational independence and
creative freedom in order to make them capable to innovate and commercialise the
products of Tesco.
Vision: The organisational vision of Tesco also has significant contributions towards
shaping the innovation and commercialisation operations within the business
organisation. Organisational vision of Tesco consists of long term objectives and goals
that Tesco needs to achieve in order for the sustained successful operations of Tesco
within the retail industries (Martínez‐Ros and Kunapatarawong, 2019). This is why the
vision of Tesco needs to emphasise its innovation and commercialisation operations in
order for Tesco to effectively innovate and commercialise goods and services through
its operations within the retail industries of UK.
Teamwork: Organisational teamwork within Tesco also shapes its innovation and
commercialisation operations. Effective teamwork amongst the employees of Tesco
makes it easier for the business to innovate and commercialise their existing goods and
services as through effective teamwork, various groups of Tesco employees can come
together and work towards the shared goal of innovating and commercialising the goods
and services of Tesco in a much more improved and enhanced manner.

Culture: The organisational culture present within Tesco also contributes towards
shaping its innovation and commercialisation operations. The organisational culture
consists of the operational norms, attitudes and behaviours that are shared by the
employees of Tesco (Sabden, 2017). It is immensely important towards the successful
innovation and commercialisation operations of Tesco for it to possess a healthy, safe,
ethical and productive organisational culture that encourages creativity and autonomy
within the employees of Tesco.
P3 Analysing the 4 P's of Innovation and Use of Innovation Funnel
The 4 P's of innovation consist of a strategic model that is used by business
organisations such as Tesco towards improving their innovation operations and observe
increased operational and financial performance within the consumer markets of UK.
The 4 P's of innovation are as follows:
Product: This P refers to the goods and products that are manufactured by Tesco
within UK’s retail sector for the purposes of selling these products to the retail
customers and satisfying their diverse needs and requirements. In order for Tesco to
operate successfully within the UK’s retail sector over a long period of time, Tesco is
required to place great emphasis and focus on innovating its current manufactured
goods and services in order to provide additional value to their retail customers and
effectively increase their operational and financial performance and market share.
Process: This includes all of the operational processes of Tesco through which their
varying and diverse operations and functions such as manufacturing, finance,
marketing, supply chain etc., all take place (Glauner, 2018). For the sustained
successful operations of Tesco within the retail markets of UK, Tesco also needs to
place focus on innovating its current operational processes in order to increase its
operational and financial performance within the UK.
Position: These relate to the changes in market position of Tesco through the
innovation of goods and products that are manufactured by Tesco within the retail
markets of UK. Effective innovation of Tesco's processes and products can make new
sections, segments of consumers available to the operations of Tesco, in order for it to
increase its operational and financial performance within the retail markets of UK. Tesco

needs to identify the new customer segments that their innovation operations provide
and position themselves effectively in order to reap the benefits of this opportunity that
innovation provides.
Paradigm: These relate to the underlying mental models which regulate and frame all
the activities of a business organisation. It includes broad organisational attributes such
as how what and why the customers use products and goods that are manufactured by
Tesco in addition to the entire operational processes of Tesco. These comprise of
theories, doctrines, values, beliefs and policies within Tesco that encompass all of its
operations.
Innovation Funnel's Use at Tesco:
Tesco, in addition to using the 4 P's strategic model can also make use of the
innovation funnel in order to effectively shape their innovation and commercialisation
operations. Innovation Funnel is a strategical framework that is made up of individual
mechanisms that the employees of Tesco can make use of with the intention to
consistently come up with and create new and unique innovative strategies and ideas
for the innovation operations of Tesco (Aarikka-Stenroos and et.al., 2016). There are 3
stages to the innovation funnel.

Wide Mouth Funnel: Innovative ideas created by Tesco employees using the
innovation funnel can be used to innovate upon existing goods, service or
organisational processes of Tesco in order to improve upon its existing operational and
financial performance within the retail markets of UK. Innovation Funnel can help the
employees of Tesco to brainstorm collectively for new, unique and innovative ideas and
strengthen the innovation and commercialisation operations within Narrowing the
Funnel: Tesco. In addition to this, innovation funnel can also be used by Tesco
employees to filter out any kinds of operational hazards that might occur within Tesco
due to the innovations of their manufactured goods, services or organisational
processes.
Narrowed Funnel: Tesco makes sure checked innovative ideas become as objectives
and goals of the organisation.
P4 Evaluating the Developments in Frugal Innovation and its Use Within Organisations
Frugal innovation is the process through which a business organisation reduces
the underlying cost and complexity of their production operations of their goods and
services in an effort to increase their productivity and profitability in the consumer
markets and also to expand operations by selling goods in new or global markets for
achieving optimum productivity and profitability (Zott and Amit, 2017). Such frugal
innovation operations usually involve businesses removing the non-essential features
from their manufactured goods and services in an effort to reduce costs, increase their
profitability and reduce operational complexity of manufacturing the product.
Example: The principles of frugal innovation have been applied by Apple in their new
electronic smartphone 'IPhone SE' which was released in 2020. Selling this new product
at reduced price required for Apple to simplify its entire manufacturing process and
eliminate all the non-essential features that are included in their flagship smartphones
such as high quality state of the art displays, big batteries of manufacturing a traditional
smartphone that significantly increase its price in the consumer markets.
P5 Commercial funnel’s importance
There is commercial funnel too important for the Tesco. Basically, commercial
funnel also called as funnel of sales, in which this play an excellent role for a business

in its NDP. Currently the upper management of Tesco has decided to develop and
innovate new product called “Tesco Saffron”. The management of this retail company
has high expectation from the commercial funnel for effectively developing own new
product. There is commercial funnel’s importance has been discussed below;
Helpful in selecting appropriate strategy of marketing
Commercial funnel helps in selecting most proper and favourable strategies of
marketing for productively promoting newly innovated and developed product called
‘Tesco Saffron’ in different market segments (Li and et.al., 2020). Commercial funnel’s
this role can contribute in company for informing and aware large number of customers
and people at the very large scale in the market place about own new product.
According to different business specialists and experts, every business should have an
effective and appropriate strategy of marketing for boosting sales of own newly
developed and innovated products and services. So that attribute of commercial funnel
will positively influence the Tesco’s new and fresh product.
Helps in fulfilling customers’ demands
Currently most businesses or ventures within market place are investing great
fund for effectively fulfilling demands and needs of customers within many of segments.
In this case, commercial funnel is very supportive to Tesco for properly fulfilling different
demands of customers in the UK’s retail industry. Before, developing saffron product,
marketing team of company has completed market research, and then it is understood
that, currently many people within the United Kingdom like to buy saffron for different
purposes. It means, Tesco has succeeded in properly understanding actual demand of
customers with the support of commercial funnel, so now it can easily fulfil the
customers’ demand, it is really a productive commercial funnel’s importance which
Tesco’s upper management should be considered while developing and innovating own
new product.
Improves ratio of sales
The commercial funnel supports in enhancing Tesco’s ratio of sales. Basically,
improved ratio of sales is the main path to s company for generating huge revenue in a
financial year (Hossain and Kauranen, 2016). Currently here is very high competition
with the UK’s retail sector, in which it is very necessary for the Tesco for booting its ratio

of sales. Reason is, when this company can be succeeded for improving its ratio of
sales in the market place with the support of commercial funnel, and then it can simply
gain excellent competitive advantage under market place. By improving sales ratio, the
company will be able to maintain its high reputation also within the retail industry of the
United Kingdom.
According to all factors, the management at Tesco is required to consider
commercial funnel within its business environment. By the support of this funnel, Tesco
will be enabled to generate excellent profit by offering its innovated saffron product.
P6 Innovation case of business and methods to access funding
Innovation aspect is too necessary for the Tesco, because innovation is the only
way or method to a company or business for gaining huge profit in this modern world.
Regularly competition within UK’s retail sector is increasing, in which existing
management of Tesco is highly required to be innovated new items and services for
gaining excellent competitive advantage in market place. Basically, innovation has
helped to company to be developed an excellent or different range of services and
goods. According to the market research, many of people within the United Kingdom
like for buying exclusive and different range of goods and services. In this situation, this
retail company can be easily produced such range of goods and services by the support
of innovation. Currently Tesco is one of the most reputed retail brands within the UK, in
which there are innovation is the most appropriate tool to the company for forever
maintaining its high reputation in the market. The company is always required to use
different ways to access funding. Basically, without appropriate source of funding no
company can be innovated new services and products (Sepahi, Salimi and Sohrabpour,
2018). There are some most appropriate ways to access funding has been discussed
below which can support to Tesco for innovating new products and services.
Savings: Nowadays the savings is the very appropriate method or way to Tesco for
fulfilling needs of funding to innovate new item or product. This company is the biggest
retailer within the United Kingdom, that’s why it has strong base of saving as well. In this
situation, top-level management of Tesco should use the fund from own savings for
processes boosting if innovating new services and products.

Investors: There are investors also an appropriate way to access funding. Basically,
there are lots of investors exists in the market, in which upper management at Tesco
should convince these investors for investing in its innovating new services or products
project. Of course, many investors will be ready for investing in this business, because
Tesco is one of the very reputed brands in the United Kingdom.
P7 Tools for developing, retaining, protecting knowledge & intellectual property
Nowadays here is lots of appropriate tools exists in market place that Tesco
should use for developing, protecting & retaining its knowledge, intellectual property
(Hermosilla and Wu, 2018). Basically, retain, develop, protect the intellectual property
and knowledge is too important task to this company. Reason is, through covering this
task, Tesco will be enabled to create the safe and secure zone for its exclusive and
different services and products. In this situation, there are few productive tools has been
added below that Tesco should be used.
Patent
Patent is very useful tool for many of companies or businesses that contributes in
developing, retaining and protecting intellectual property & knowledge of the company.
Basically, when upper management at company want for protecting it’s a specific
product or service for never to be copied by many other businesses or companies, then
it is highly required for taking patent from UK’s legal authority of patent. After adopting
patent, no any other business can produce product or service as Tesco. Currently
businesses in whole the world are taking lots of advantages by this patent tool.
Copyrights
Copyright is basically the next patent version. This tool supports in developing,
retaining & protecting a productive knowledge & intellectual property. In this situation,
for adopting copyright in a specific product or company, Tesco need for visiting in that
government office of the United Kingdom which responsible to register copyrights within
this country. Copyright basically is the legal term which provides opportunity to a
company, person or organisation for protecting own exclusive or different range of
services and products from those businesses and people who are always copying
services and products of original brands. So that this tool is also too effective to the
Tesco.

Trademarks
Trademarks is the third very important tool for many of companies and
businesses to develop, retain, protect their knowledge or intellectual property
(Ghahramani, 2016). Basically, every company mostly has a specific trademark which
mainly helps for presenting its very unique identity. So that, upper management at
Tesco need to consider existing tool as well for creating the secure and safe zone for its
business in market place. Currently many of people or customers within market knows
Tesco by its exclusive trademark, in which by the support this tool this retail company
can be easily secured and protected its knowledge & intellectual property in market
place.
CONCLUSION
The report concludes that innovation of new goods and products is of immense
importance towards the sustained successful operations of business organisations
within the consumer markets of UK. This report analyses the concept and importance of
innovation in Tesco and compares it to the concept of invention. The report also
evaluates the impact of Tesco's organisational vision, leadership, culture and teamwork
on its innovation and commercialisation function. Then the report assesses the 4 P's of
innovation and examines the concept of innovation funnel towards shaping innovation
ideas within Tesco. Further the report analyses the developments in frugal innovation
with the use of examples. The report also evaluates the importance of commercial
funnel and application of NPD processing towards the commercialisation of Tesco
innovation. Further the report designs an innovation business case for Tesco which also
includes ways to access funding. Finally, the report assesses the various tools that
Tesco can make use of in order to develop, protect and retain their intellectual
properties and organisational knowledge.