Innovation and Commercialization: A Business Development Report

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INNOVATION AND COMMERCIALISATION

Table of Contents
Introduction................................................................................................................................4
LO1. Explain the context for innovation and determine the difference between invention and
innovation...................................................................................................................................4
P1. Explanation of innovation and discussing importance of that in compared with
invention.................................................................................................................................4
P2. Explanation of organizational vision, culture, leadership, and teamwork which shape
commercialization and innovation..........................................................................................5
M1. Discussion of various sources of innovation and ways by which organizations can
implement innovation.............................................................................................................6
D1. Critical discussion of ways by which innovation is developed inside organization........6
LO2. Explain the different types of innovation..........................................................................7
P3. Explanation of 4Ps of innovation and use of innovation funnel....................................7
M2. Application of innovation funnels in organization.......................................................8
P4. Discussion of developments in case of frugal innovation by providing examples in
which ways it is used in organization.....................................................................................9
M3. Evaluation of role of frugal innovation in organization..............................................10
D1. Critical discussion of ways by which innovation is developed inside organization....10
LO3. Discuss the process required to commercialize innovation............................................10
P5. Importance of commercial funnel and discussion of applying New Product
Development for innovation commercialization..................................................................10
P6. Building innovation business case for organization and developing ways in order to
access funding.......................................................................................................................12
M4. Building innovation business case to measure its effectiveness by using different
techniques.............................................................................................................................13
D2. Evaluating nature of innovation and providing evidence to analyze ways
organizations can overcome issues with appropriate innovation.........................................14
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LO4. Evaluate the range of methods for protecting ideas and understand their advantages
and disadvantages...................................................................................................................15
P7. Discussion of different tools that can be used by organizations to develop and protect
intellectual property..............................................................................................................15
M5. Presentation of evidence of different tools which are used in wider business
environment..........................................................................................................................15
D2. Evaluating nature of innovation and providing evidence to analyze ways
organizations can overcome issues with appropriate innovation.........................................15
Conclusion................................................................................................................................16
References................................................................................................................................16
References................................................................................................................................17
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Introduction
This study focuses on discussion of innovation and its importance for an organization to gain
success in market. There are several ways which can be used in order to implement
innovation inside organization; those are properly discussed here in this study. 4Ps of
innovation are discussed here along with explanation of commercial funnel.
LO1. Explain the context for innovation and determine the difference between
invention and innovation
P1. Explanation of innovation and discussing importance of that in compared with
invention
Innovation is defined as a procedure for interpreting a particular idea or creating values by
bringing inventions into products in order to attract customers. According to Prajogo (2016),
innovation can be implemented by first developing an effective idea which will help in
satisfying needs. In general, there are basically two types of innovation, revolutionary
innovation, and evolutionary innovation. Evolutionary is that kind of innovation which
continuously takes place inside organization and revolutionary is that kind of innovation
which brings immense change inside firm.
As stated by Visnjic et al. (2016), invention is basically defined as development of new
product which will be in market for very first time. On the other hand, innovation is defined
as improvising something which already exists. Elaborate comparisons between these two are
done here:
Innovation Invention
Developing new ideas so that new values
can be added with existing products
Development of new products or services
Real implementation of newly developed
idea
Original idea and it can be applied by using
different theories
It requires technical, marketing as well as
strategic skills
It requires scientific skills
Need for bringing improvement in already New idea comes in mind of anyone and then
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existing services he or she tries to implement that
Table 1: Difference between invention and innovation
(Source: Created by author)
In case of any organization, innovation is better than invention. Invention requires new ideas
of products or services which are not present in market. However, innovation can be brought
within any product by simply improvising it. Invented products will be new in market and
thus it is required to promote them by adopting different promotional tactics. Moreover, after
inventing new ideas it is required to analyze if that will be accepted in market or not. On the
other hand, as stated by Souto (2015), innovation just requires new ways or improvising ideas
which will make any existing product more profitable or fruitful. For example, in given case
study, Essence Drinks, as Akshay does not want to shift focus from lassis, thus new range of
lassi drinks can be introduced. In spite of developing new ideas about drinks and beverages,
improvisation can be made in Lassi. This will help this company to market already favorite
lassi drink in better ways.
P2. Explanation of organizational vision, culture, leadership, and teamwork which
shape commercialization and innovation
For any organization to get success in market, it is important to have a clear vision so that it
can constantly develop ideas and implement that, to meet needs of firm. According to Yang
et al. (2017), this is important to have clear vision about goals, values, and mission for
success of firm.
Leaders are required to be as good as their teams and they must recruit skilled employees in
order to meet needs of organization. Leadership helps employees and staffs to gain sufficient
knowledge about necessary decision making and problem solving skills. Thus, when situation
occurs like profit is decreasing then employees and leaders together can develop ideas to
bring innovation inside organization.
For any company to stay in market for longer time, it is required to adopt different cultures
and promote diversification in working atmosphere. Employees must be recruited from
different cultural background and there must not be any discrimination inside office.
Moreover, firms are required to adopt cultures of locations they exist. This will help in better
increment of profit margin within organization.
In accordance with Carayannis et al. (2015), teamwork is important in order to bring
innovation inside organization. Innovation can be implemented in better ways if leaders,
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employees all work together and develop ideas to implement that. In case of given case study,
Akshay is the leaders here and he requires having clear vision about goals of organization.
Moreover, it is also required to innovate new Lassi ideas so that it can be implemented with
help of employees and their cultures. However, this store is in UK and thus to attract
customers at high scale, it is required to know what they like most in soft drinks as per their
culture and then incorporate that within Lassi. For example, avocado and kiwi lassi can be
made and sold to customers.
M1. Discussion of various sources of innovation and ways by which organizations can
implement innovation
There are several sources from where innovative ideas can be gained like employees,
demographics, market needs. In accordance to Christensen et al. (2015), if it is decided that
innovation is important, and then ideas can be got from company owner, employees, different
people surrounding firm and their cultures. Ways to foster innovation inside company are:
Maintaining open communication: This helps employees to directly communicate with
higher management and tell them about innovative ideas that can help organizations to reach
new heights.
Engaging employees in developing important decisions: Employees are from different
backgrounds and their ideas, help in taking important decisions about betterment of
organization. Engaging them will motivate their inner creative skills and they will be more
open about their ideas.
Encourage customers to provide ideas: Different person has different types of likeness and
discussion with them help in identifying that. Organizations must follow this technique in
order to implement products which are needed by consumers to attract them.
D1. Critical discussion of ways by which innovation is developed inside organization
Different ways are there which can be used to implement innovation inside organizations.
However, as stated by Prajogo (2016), employees are primary resources of any company and
they have immense innovative thinking skill. Thus, giving them opportunity to actively take
part in decision making will motivate them to share their ideas openly. On the other hand, as
argued by Visnjic et al. (2016), not only in decision making process but this is important to
always communicate openly with employees so that they share their views about achieving
goals as well. However, Souto (2015) argued, consumers are reasons behind company’s
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existence, and thus integrating their needs is important. As discussed, letting employees and
customers both to take part in innovation process is extremely necessary. Innovation can be
embedded by implementing best innovative ideas and then measured by comparing past and
present profit.
LO2. Explain the different types of innovation
P3. Explanation of 4Ps of innovation and use of innovation funnel
4Ps of Innovation: 4ps model is an innovation mix that provides a business to identify the
requirement of improvement in innovation process to enhance a business. This innovation
mix is consisting with Paradigm, Position, Product and process (PODMETINA et al., 2016).
Therefore, evaluating all this aspects of innovation process it provides guidance about target
of business and area of business that require innovation, this supports the idea of generation
of process and way to executing new idea. This tools can helps this beverage business to
explore possible improvement in each segment.
Figure 1: 4Ps of innovation
(Source: PODMETINA et al., 2016)
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Innovation funnel: Innovation funnel is use to explained steps that acquire place in
improvement of a process or product. The role of all types of innovation is to generate new
products that can meet market demands in manufacturing process or in form of economics. In
initial stages of improvement, some4 concepts are gathered that follow some refinery
procedures.
The main use of innovation funnel is to create as many concepts as possible; a huge segment
that can be refined and also converted into effective improvement plans. This actually creates
a funnel like shape, by lots of concepts to little concepts. Therefore, it proves to best tools to
prioritise any concepts of innovation and ensure that the best one can be entirely developed
and provide advancement to the projects and the beverage products or can also provide ideas
about other innovation that can be launched.
M2. Application of innovation funnels in organization
Development of innovation funnel goes through three major steps (Bengtsson et al., 2016).
Those are:
First Step: Innovation department of Essence Drinks has to increase their knowledge and
information about their entire business aspects. This helps them to gather information about
required area of innovation with concepts. To accomplish this task one need to have clear
perspectives about objectives of this company, so that objectives can be linked with the
gathered concepts. This step is represented by broader mouth of funnel.
Second step: These steps go through screening of information that is gathered in first steps.
Process of screening is matching the concepts with objectives to verify their relevance. After
that assessment should be done to understand returns and risk of each deal. This helps to
decides that for which idea resources should be allocated and the selected idea must be
promising and filled with attractive opportunities. This is represented by narrowing part of
funnel.
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Figure 2: Innovation Funnel
(Source: Bengtsson et al., 2016)
Last Step: In these steps the company must ensure about execution of this idea on their
objectives and this follows with launching new product by this company. This step is
represented by narrow part of funnel.
P4. Discussion of developments in case of frugal innovation by providing examples in
which ways it is used in organization
Frugal Innovation: This is the process of information that can discover new models of
business or can formulate value chains and also can redesign the products of that business to
serve their user that faces excessive affordability constraints. It is received by users in
balanced way and also in sustainable manner. Frugal innovation is either controlling or
tapping different institutional gaps and resources to generate more ordinary market.
Therefore, it can be said that this type of innovation provides solutions to different functions
by providing few resources for the many that have little means (Colledani et al., 2016).
Development through frugal innovation: The most significant things in frugal innovation
are that it is applicable in various dimensions not only for cost, bout the key feature is
simplification in entire aspects of innovation process up to result. Frugal innovation is
majorly applicable to emerging market, such as Essence Drinks. This is because its output of
procedures can relatively flirt with specific needs of emerging markets , with their rare
requirements, such us products and services became affordable through it, so that all types of
customers can purchase the products.
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M3. Evaluation of role of frugal innovation in organization
Frugal innovation is capable to identify value and supply chain, that can apply for ingenuity
band also in thinking process of design to reconstruct a existing products, such as Lassi. This
innovation process with it’s a new business models can be applied to create measurable
operations and sustainable practices in businesses. Innovation process and its practices can be
identified to be frugal if, the business can achieve reduction cost in sustainable manner. This
also follows to concentrate on major activities related innovation within business and
contribution of these activities to achieve a standard performance level.
Therefore, as opined by Pisano (2015), if a business is filled with this condition, they and it
can be said that frugal innovation is best fit in this business and the business could become
benefices by this innovation process. Thus frugal innovation refers to improvisation of
arrangements or task around required by lack of resources. This term represents the way and
practice of identifying low cost with innovative solutions towards problems. This innovation
process proved to be has potentiality to demonstrate, that this is unique type of innovation
process that provide leverages to business and their resource constraints. In Addition to this it
debunks huge claims for R&D investment and has ability to achieve profitability form low
income consumers.
D1. Critical discussion of ways by which innovation is developed inside organization
Innovations musty to either launching a new products or developing an existing products as
innovation department of any company is responsible for this. Hoe\server, it is important top
goes through 4Ps of innovation before processing any innovation in business. Innovation
funnel is best technique that can be applied to implement any business as this take care about
gathering information and ideas up to launching of any product. Therefore, innovation is not
a single step process it must go through various approach and theory. Frugal innovation can
be proved as best suited for any innovation as it has the ability to make a product cost
effective to breach low income consumers.
LO3. Discuss the process required to commercialize innovation
P5. Importance of commercial funnel and discussion of applying New Product
Development for innovation commercialization
Importance of commercial funnel:
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1. This funnel is important to develop new marketing strategy. Based on case study,
after developing and implementing innovative products, Essense Drinks can develop
new marketing strategy to attract more customers. In this part, commercial funnel will
help in spreading awareness about new product and develop their interest.
2. This funnel helps to relate with customers. Innovation can only be brought in
organization when it will understand customers are demanding something new. Either
their interest or their buying action is decreasing, which can be identified by
commercial funnel.
3. Commercial funnel helps in generating more sales. New marketing strategy will
attract customers or not can be understood due to this funnel. If customers like new
product then they will grow interested and make decision to buy that product.
According to Yang et al. (2017), when customers buy new products in high scale then
this can be understood that they like that.
Application of New Product Development (NPD):
Process of NPD begins with identifying market opportunity and ends in production, and
delivery of newly developed products. According to Carayannis et al. (2015), product
development is first most crucial step for product innovation. Processes and steps of NPD
are:
Figure 1: Elements of NPD
(Source: Visnjic et al. 2016)
Generating: Using appropriate SWOT analysis and market trends, any firm can develop
ideas to stay ahead of competition in market.
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Screening Idea: In this step, different ideas are screened in order to gain one perfectly
suitable innovative idea which may help organization to reach new heights.
Concept Testing: This is basically way by which idea will be implemented and it is required
to be well developed. For that reason, concept is being tested to analyze it will help firm to
gain profit or not.
Business Analytics: In this New Product Development stage, it is important to develop a
system that will measure progress. Progress can be measured by using calculating average
time in each stage and by observing output. This is stage where idea starts transforming into
product.
Marketability Tests: After developing product it is required to test if those products will be
acceptable in market. This can be done by distributing free samples and taking feedback from
customers.
Technicalities: In 21st century, it is extremely necessary to use different technologies in
order to develop products in market. New advertisements can be developed by appropriate
video editing and these help organizations to reach to more people.
Commercialize: In this stage, consumers start using product and firms must be able to
continuously provide that.
Introduction and Review: Customers provide feedback after using product and based on
that proper improvement and pricing are required to be set.
As based on case study, Essence Drinks is no longer being able to earn high profit due to
extreme competition in market. Thus, generating innovative ideas will help this company to
continue gaining profit at high scale. After that, screening of one perfect idea and one suitable
way of achieving success is required to be accomplished. New lassi drinks can be developed
like Kiwi lassi and avocado lassi and those are required to be tested in market. New
advertisements will help in attracting new customers and then they will start buying from
Essence drinks. Based on review or feedback, Akshay can set price in proper manner.
P6. Building innovation business case for organization and developing ways in order to
access funding
Several different ways are there which can be used in order to fund growth of business via
innovation. According to Christensen et al. (2015), either people can spend or use their own
fund or they can use external financial resources to grow business. Borrowing money from
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