Innovation and Commercialization: NPD and Funding Strategies

This report provides an in-depth analysis of innovation and commercialization within organizations, emphasizing their critical role in achieving market success. It examines the differences between innovation and invention, highlighting the importance of organizational vision, leadership, culture, and teamwork in shaping innovation. The report also delves into the 4Ps of innovation (Product, Process, Position, Paradigm) and the use of the innovation funnel for idea refinement, along with developments in frugal innovation. Furthermore, it emphasizes the commercial funnel and new product development (NPD) processes for commercializing innovation, including building an innovation business case and accessing funding. The report concludes by evaluating tools for developing, retaining, and protecting knowledge and intellectual property within an organization.

Innovation and Commercialization
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Table of Contents
Introduction..............................................................................................................................................3
LO 1.........................................................................................................................................................4
P1: Explain innovation and determine its importance to organization in comparison with invention..4
P 2: Explain how organizational vision, leadership, culture and teamwork can shape innovation and
commercialization................................................................................................................................5
LO 2.........................................................................................................................................................7
P 3: Explain the 4P’s of innovation and explain the use of the innovation funnel to examine and
shape innovative ideas........................................................................................................................7
P 4: Explain developments in frugal innovation and provide examples of how it is used in an
organizational context..........................................................................................................................9
LO 3.......................................................................................................................................................11
P5. Explain the importance of the commercial funnel and the application of new product
development (NPD) processing for commercialisation of innovation................................................11
Figure 6: Value Creation Funnel........................................................................................................11
P6. Build an innovation business case for an organisation, including ways to access funding........13
LO4........................................................................................................................................................14
P7. Evaluate the different tools that Mr Green can use to develop, retain and protect knowledge
and intellectual property.....................................................................................................................14
Conclusion.............................................................................................................................................15
Reference list.........................................................................................................................................16
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Introduction
The assignment focuses on the gaining understanding on the importance of innovation and
commercialisation in all the organisations producing products and services, in order to achieve
success in the market. Innovations as well as commercialisation are the elements needed by every
firm in the market to maintain their product’s demand and keep sales in check at all times till the
product is being produce is an important element needed. An in depth analysis and description will
be looked into while studying the notion of innovation and commercialisation. There importance to the
organisations producing products and services commercially, along with the features and significance
of them in the market will be highlighted and discussed upon. This assignment contains a given case
study which includes questions and situations that need solutions based on the learning outcomes
mentioned. A critical analysis of all the types and functions of innovation as well the importance of
commercialisation will be covered in this assignment.
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LO 1
P1: Explain innovation and determine its importance to organization in comparison with
invention.
Every business is set up on some vision, principle and targets. Each passing day, the market is
becoming more and more competitive. The vital points in which the business should be shaped are
invention and innovation. Without these two, the business in an organization becomes stagnant
(McKinley et al., 2014). Business expansion is another criterion in which organization should focus
upon to increase the profit margin. Organizations nowadays belong to different sectors such as
technology, research, services and goods production and many more. The vital aspects what the
organization needs to focus up on, is the demand of the consumers. All the services and goods
manufactured by a company should meet the requirements of the customers. An organization first
starts with few principles and rules (Lane, 2016). However, as business expands there is a need for
invention and innovation. Innovation is the backbone of every organizational setup. Every passing
day, new business concepts are getting exploited in many organizations around the world. Innovation
and invention are very different concepts. Making new changes in the invention is known as
innovation. Innovations are done to increase sales and adapt to the concept of commercialization. Mr.
Green owns the company named ‘Healthy Drinks’. The company has entered into the 3 rd year and is
witnessing decrease in their sales. Healthy Drinks manufactures drinks which are water based. Mr.
Green’s organization should manufacture smoothies as it is in present demand. The innovation
should include the incorporation of various flavours in the juices.
Innovation Invention
Innovation are changes that are made to
the existing inventions
Inventions are new ideas and concept with
which an organization initiates
Innovations are incorporated in the middle
of business proceedings
Inventions are decided up on at the
beginning
Innovations are tried and tested and have
a realistic value
Inventions are not verified
Figure 1: Differences between Innovation and Invention
(Source: Shubik, 2016)
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When a new concept or idea gets a proper shape and can be used in the reality, it is known as
invention. When a company starts, it starts with some new ideas. However, as day’s passes it
incorporates innovation into it. Innovation helps in garnering more profits. Inventions are just basic
ideas. They are not tried or tested. It is something that does not comes with verifications. An invention
can be a failure. Business models are structured and product designs are created in the invention
phase. When Mr. Green started his company ‘Healthy Drinks’ three years back, he came up with an
innovation to manufacture juices which were water-based. However, now the market demands juices
which are milk-based. Mr. Green’s company is in such a stage where he needs innovation rather than
invention.
P 2: Explain how organizational vision, leadership, culture and teamwork can shape
innovation and commercialization.
Every business organization before it starts its operation in the market sets some visions, regulations
and rules for itself. The vision of the organization includes reaching the targets set up it. The factors
that shape creativity and innovation in a particular organization are organizational teamwork,
leadership, culture and vision. The employees working in the organization has to follow some rules.
Attaining the daily target is yet another vital vision for any organization.
Figure 2: Organization Setup
(Source : Kierkegaard, 2015)
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A company is set up on visions jotted down from the beginning. The products that are manufactured
by a particular organization, is in line with the visions of the organization (Körner et al., 2015). The
innovations made in an organization are also done according to the vision. When Mr. Green started
his organization ‘Healthy Drinks’ he had the vision to manufacture juices which are water-based.
However, due to the changing market scenario the demand of the market is to manufacture milk-
based juices. Companies do not want to shift from the visions with which they started with. Here, Mr.
Green can innovate his business by manufacturing milk-based juices keeping in mind the vision with
which he started.
A successful team work shapes innovations. Innovation can be achieved easily, if all the employees
in a particular organization give full individual effort. All the employees working in different teams
should provide their individual thinking, so that many ideas get gathered and the best one get chosen.
New ideas are very important for innovation to happen (Northouse, 2017). Employees can also give
in idea to maximise promotion for the newly manufactured products. ‘Healthy Drinks’ should include
the employees to innovate the business. There are some cultures followed in every organization. The
cultural values are set in the initial phase of the organization. Changing market scenario and
competition might bring some changes in the company, but the core cultural values remains the
same. Mr. Green’s organization ‘Healthy Drink’s has also got some cultural values. Though ‘Healthy
Drinks’ need innovation to remain in business, but it does not want to shift from its cultural values.
When innovation and invention is considered, leadership is of vital importance. The innovation and
inventions should be guided properly so it proves advantageous to the organization ( Jordan et al.,
2015). The leadership is usually done by the managers and the management of the organization.
‘Healthy Drinks’ is thinking of innovation. It wants to manufacture juices which would be milk-based.
All these innovative ideas should be guided by the leaders present in the organization.
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LO 2
P 3: Explain the 4P’s of innovation and explain the use of the innovation funnel to examine
and shape innovative ideas.
The process where further developments are made in the initial invention, it is known as innovation.
Innovation is very important when an organization plans for expansion. There are various fours ways
in which innovation can be achieved. The four ways in which innovation can be attained are as
follows:
Figure 3: 4 P’s of Innovation
(Source: Duran et al., 2016)
 Product innovation: Product innovation is the most common method that is followed, when
innovation is considered (Adams et al., 2016). Changing some features in a product or service
is known as product innovation. In this assignment, Mr. Green needs to innovate his business
plans and manufacture milk-based juices rather that water-based juices.
 Process innovation: Innovation can also be attained in the process by which products are
manufactured. Innovating the process in which products are manufactured might decrease the
cost of production and also might increase the quality of the product. Mr. Green should make
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innovations in the process in which he manufactures his juices so that the quality gets better
and there is more acceptances from the consumers.
 Position innovation: Identifying new markets for the existing or new products is known as
position innovation (Planing, 2015). Before launching of the product, the organizations should
identify new markets, so that a new customer base can be formed. Mr. Green in order to
expand his business should identify new markets where he can position his products.
 Paradigm innovation: Particular organizations or sectors are set up on some governing
paradigm. All the activities carried out by that organization follows the paradigm that has been
set beforehand (Leonardi, 2014). The innovations attained in an organization relates to the
paradigms. Mr. Green’s paradigm was manufacturing juices. However, as the demand of the
market has changed, he needs to manufacture smoothies.
The steps that are engaged in the development of a product or service are known as an innovation
funnel. Innovations are made to meet the demands of the consumers in the market place. All the
ideas that are that are created in the initial part of the business go through a refining process. After
the refining process gets completed, some ideas are accepted and some gets discarded. All the new
ideas which gets accepted, gets incorporated with the existing business.
Figure 4: Innovation Funnel
(Source: Zandova et al., 2014)
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There are three stages in the innovation funnel; the first stage is the mouth of the funnel. In this
stage, ideas get gathered, the market is researched. The narrow section of the funnel is the second
stage (Kowalski et al., 2016). In this part, the ideas which are considered are screened. The third
stage is the narrow part of the funnel. In this stage, the ideas are put to use in the company so that it
shapes the innovation taken up by the company.
P 4: Explain developments in frugal innovation and provide examples of how it is used in an
organizational context.
Frugal development can defined as getting more results from less resource. In the rising market,
innovators and entrepreneurs are adopting strategies which are inexpensive to get desired results.
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Figure 5: Developments in Frugal Innovation
(Source: Winterhalter et al., 2017 )
The organizations are developing plans in which they can manufacture their product in the lowest
cost possible (Zeschky et al., 2014). This would ensure maximization of profit ratio. Frugal innovation
also helps in the sustainability of the natural resources. Resource limitation is the area where frugal
innovation comes into play. There are four stages in which frugal innovation can be achieved. The
first stage is the identification of frugal innovation. In this stage, a research is conducted for the
existing methods involved in frugal innovation. The identified frugal innovations are examined. After
this step, documentation is done for the existing frugal innovation. ‘Healthy Drinks’, the company
owned by Mr. Green should identify the frugal innovations so that, the organization can plan its further
steps of expansion. All the steps discussed give an overall view of the frugal innovation which is
existing in the present. The second stage involves the deduction of problems. In this stage, the
market is closely monitored. The business models that are being followed are determined keeping in
mind the changing market scenario. The problems that are underlying are identified which are related
to frugal innovation.
At the end, categorization and documentation of the identified problems are done. The result of this
step is problem catalogue. Mr. Green should incorporate the frugal innovation in his business plan so
that the problems can be identified easily and solutions can be derived. The third stage development
done in frugal innovation is deduction of patterns (Neumann et al., 2017). In this stage, the
description of the applied solutions is considered. In a particular pattern catalogue, the identified
patterns are documented. The abstract solutions are transferred to the patterns which are
transferrable in nature. The result of this step is pattern catalogue. The organization named ‘Healthy
Drinks’ should identify the changes that are happening in the market so that effective patterns can be
derived. The last stage that is involved in the frugal innovation is deduction of the pattern systems. In
this stage, relations are derived in between frugal innovation, problems and patterns. The results are
documented in a matrix which is multi-domain in nature. Mr. Green should relate all the innovations,
patterns that his organization has come across so that a successful pattern system can be derived.
Any organization which is adopting innovation in its business strategies should consider frugal
innovation as an important concept.
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.
LO 3
P5. Explain the importance of the commercial funnel and the application of new product
development (NPD) processing for commercialisation of innovation.
The commercial funnel can be described as the process of buying which the customers follow to
purchase a product, lead by the organisations or companies producing the product.
Figure 6: Value Creation Funnel
(Source: Thinking strategies, 2010)
It is a period of an ideal travelling which the potential customers experience leading to becoming the
actual consumers (Duncan and Elkan, 2015). When the marketing of a service or a product is done it
targeted to thousands of people in the market but only a small number or percentage of people
provide their details of contact and willingly becomes lead for the process of marketing. Out of this
percentage of becoming leads only a few become actual customers and depicts a process of
funnelling of the people to whom the information in regards to the product was aimed at (Lingqvist et
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al., 2015). This commercial funnel, needed to be incorporated by Mr. Green at his firm, has four
stages, which are:
 Attract
At this stage the ‘Healthy Juice’ needs to develop an attractive marketing and advertising
strategies for the introduction of the product in the market.
 Convert
In this stage lucrative offers are presented to the potential customers and visitors and created
as leads.
 Close
This stage includes the efforts and performances by the sales people of the company to
convert the leads into customers of the company.
 Delight
At the final stage good quality of post sales follow up and post sales services are to be
executed to maintain existing customers and extract customer references as well.
The New Product Development (NPD) is an important procedure every company needs to follow
before introducing a new product in the market. It is the process of creation of a tangible product and
its introduction in the targeted market starting from the stage where the idea of the product and
customer’s need were seeded (Morgan, 2015). The NPD process needed to be followed by Mr.
Green and his company ‘Healthy Juice’ includes these stages:
 The seeding of the idea to meet the requirements and needs of the customers.
 Screening of the idea acquired relating to the development and production of the product.
 Development and tests of the idea and concepts related to the product to be followed.
 Analysis and development of the business strategies to be followed in the process of
producing the marketing of the product
 The development of the final product once the business and marketing strategies are finalised.
 This stage includes the testing of the prototype of the product in the market and associated
feedbacks received from the market.
 Implications of the marketing mix and strategies formed.
 The final introduction of the product developed to meet the needs of the consumers in the
market.
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