Innovation and Commercialization Strategies for Essence Drinks Company

This report provides a comprehensive analysis of innovation and commercialization strategies employed by Essence Drinks Company. It begins by defining innovation, differentiating it from invention, and highlighting its importance for the company. The report then examines the organizational vision, leadership style, culture, and teamwork, and their impact on innovation and commercialization. The 4Ps of innovation (Product, Paradigm, Process, and Position) are discussed, along with the application of the innovation funnel. The report further explores frugal innovation, its use, and its significance for Essence Drinks. The importance of the commercialization funnel and the application of new product development processes are also evaluated. Finally, the report touches upon tools for developing, retaining, and protecting knowledge and intellectual property, concluding with key findings and recommendations for Essence Drinks Company.

Innovation And
Commercialization

Table of Contents
INTRODUCTION ..........................................................................................................................1
LO1..................................................................................................................................................1
P1 Innovation, its Importance & its comparison with Invention.................................................1
P2 Shape of innovation and commercialization in Essence Drinks Company............................2
LO2..................................................................................................................................................3
P3 4P's of Innovation and use of innovation funnel....................................................................3
P4 Development in frugal innovation and its use........................................................................5
LO3..................................................................................................................................................6
P5 Importance of commercialization funnel and application of New product development
processing....................................................................................................................................6
P6 Innovation business case and ways of access funding............................................................7
LO4..................................................................................................................................................9
P7 Different tools for develop. Retain and protect knowledge and intellectual property............9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Innovation is the term used for creation of new ideas, thoughts that is being used by
companies. It is often used as applying new concepts and models into business that enhances
growth in future. It takes place in many products, services, technologies etc. Innovation is
different from invention as innovation is creating new product or services while invention means
implementing ideas to product that is already exist in the market. It needs marketing and strategic
skills to implement idea. It includes combination of different products that occurred from many
ideas. It is used in all the departments of organization. Commercialization means implementing
new product and method that is available to everyone in marketplace.
Present study will be based on Essence Drinks company. It is founded by Akshay Kumar.
The company was launched with one drink that is healthy mango lassi into the UK market. Then
after there is rise is in the sales of the company in its first year because of innovative formula and
various strategies used by company to promote its product . After third year its sales decrease as
compared to other competitors in the marketplace.
Report will include about the innovation and its importance to organisations in
comparison with invention. It also includes vision, leadership, culture and teamwork that helps in
shaping innovation and commercialisation. It explains 4Ps of innovation and use of innovation
funnel in shaping new ideas in the company. Further more it will include importance of
commercial funnel and the application of new product development for commercialisation of
innovation.
LO1
P1 Innovation, its Importance & its comparison with Invention
INNOVATION AND ITS IMPORTANCE FOR ESSENCE DRINKS COMPANY
Innovation is the most common term used in today's business world. It refers to the term
which is new and fresh even have never been thought or seen before. Innovation is the new
ideas, thoughts and imaginations which is in the form of methods, processes or devices or tools.
Innovation is basically occurred when businessmen or entrepreneur make improvement in the
existing process, products and services (Pellegrino and Savona, 2017).
Essence drinks company did innovate and make a healthy mango lassi which attract the
UK customers and the company's sales and profits increases rapidly. Thus, innovation plays very
important role in the business. These importances of innovation are as follows -
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Innovation in products or services helps organisations, customers and societies to solve
the problems easily. It increases the organisation and employees' productivity because when
customers love organisation's innovative products and services, this lead to increase in the
production and sales of the products and services. Increasing production make employees' expert
in their work which increase their productivity and overall organisation productivity also
improves. It leads company to create a new and different market where customers and their
demands are increasing. It leads company to create brand image for the organisation and
enhances its goodwill. Innovation helps to maximize the return on the investment which is made
by the investors of the company. Innovation also helps company to gain competitive advantages
over its competitors by beating competition due to offer something new which has never done
before. It helps company to stand out differently.
DIFFERENT BETWEEN INNOVATION AND INVENTION
Invention refers to the creation and introduction of the processes or products or services
for the very first time to the customers, employees, societies or another businesses (Cowen and
Shenton, 2017).
Difference between Innovation & Invention
BASIS INNOVATION INVENTION
Meaning It is the introduction of a new
version for the better usage of
products and services.
It is the new products,
services, process, device or
concept.
Core Concept Adding new values to the
existing products and services.
Completely new creation of
products and services.
Required Skills and knowledge It requires technical
knowledge, competencies,
knowledge about the market
trends and usage of the
products.
It requires scientific
knowledge, competencies and
financial aids.
Activities It is done by any department of
the organization.
It is only done by Research
and Development department
of the organization.
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Relationship with
commercialization
Innovation need to be
commercialized.
Invention may not need to
commercialized.
Example Essence Drinks Company will
launch new flavors of the
Lassi.
Essence Drinks Company
produced healthy mango lassi.
P2 Shape of innovation and commercialization in Essence Drinks Company
Organizational Vision
Essence Drinks Company's vision statement is to provide healthy lassi to the customers
with different flavours. For that, company need to think something new so that they can add
values in their drinks products and increase their sales and profits. This lead company to beat the
competition too. For achieving the vision, company need to commercialised its innovative
products so that they can enter into new market and expand its business. Like this, vision of the
Essence Drinks Company has the great impact on the innovation and commercialization.
Leadership Style of Organisation
Essence Drinks Company has adopted Innovation leadership style in which leaders of the
company combines various kinds of leadership styles in order to motivate the employees to think
out of box for the purpose of produce more and more healthy drinks flavours. Leadership also
impact the organisational innovation and commercialization because leaders motivate the
employees according to the organisational goals and objectives which lead them to do innovate
and commercialized the products. So that company can increase its customer base and products'
sales.
Organizational Culture
Organisational culture is the combination of values, perceptions, attitudes and norms of
the employees. It impacts the employees' behaviour and thinking process. If organisational
culture are good, employees will be happy and satisfied which can lead them to think out of box
and do something innovative in the organisation. On the flip side, if culture is not good, conflicts
and tensions often occurs, it leads employees to be in tension and in bad mood. This cause to less
innovation in the organisation because employees are not happy with the organisation and its
culture.
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Thus, Essence Drinks Company's organisation culture also impact the innovation and
commercialization of the products and services which is in the form of innovative ideas of the
employees of the company.
Teamwork
Teams differ from each other according to the various aspects such as members and their
perceptions, their communication skills, their rapport with another members of the team, their
contribution towards objectives, their mutual understanding and team cohesion. These various
aspects decide that team is good or not.
For the innovation, individual is not enough, they need a team so that they all can work
together and able to achieve what they want. If team members are understanding and co-
operative with each other, there would be higher chance for innovation. But if there are conflicts
occurring between members in the team, there is lower chance for the innovation (Lusch and
Nambisan, 2015).
LO2
P3 4P's of Innovation and use of innovation funnel
4P's OF INNOVATION
4P's of innovation is known as Innovation Space. It refers to the term in which is the core
qualities for the fundamental for the success of the innovation done by business. 4P's of
innovation is likely to 4P's of marketing which is done to make marketing of the product
successfully.
Here 4P's of innovation are as follows -
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Product
It is the main item in which innovation process will applicable. It is valuavble for the
organisation as well as for the customers too. Different flavours of the drinks are the main item
for the Essence Drinks Company. It helps company to gain competitive advantages over its
competitors who entered into the market in the initial 2 years (Zahedi, Mirghfoori and Morovati
Sharif Abadi, 2018).
Paradigm
It is the process in which organisation plan that how to prepare employees so that they
can face changes due to innovation. In this process, company also analysis about the challenges
which will come along with the innovation.
Essence Drinks Company has to plan about the challenges and process of face the
changes that employees have to face. The challenges company can face are such as taste,
preferences of the different customers and another company can copy the concepts etc.
Process
Process is the way to distributing the products to the customers. It is the most important P
for any company. Because without customers, company is nothing.
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Illustration 1: 4P's of Innovation
Source: 4PS- EXPLORING THE
INNOVATION SPACE, 2015.

Essence Drinks Company has to focus on the delivery of the drinks on the time to the
customers. Also, if there is more demand for the customers, it means no. of customers will be
increase in the shop of company, thus, every customers get, what they want. Company has to
make this sure too.
Position
Position refers to the term which means that where company wants to see itself in the
future. For that, company need to do focus on the promotional activities.
Essence Drinks Company wants to increase its sales, thus it will focus on the e-marketing
strategies, advertising strategies and personal selling strategies (Chun and et.al., 2015).
INNOVATION FUNNEL AND ITS USE
Innovation funnel is the process of developing new products by describing those steps
which can be better for the customers by providing best services. It is crucial for the Essence
Drinks Company to grow its business and successfully commercialisation its healthy and sugar
free different flavours of lassi. It also helpful in the increment of overall value of the
organisation. It also helps in creating more innovative products, cost reduction, more customer
attraction and goodwill enhancement for the organization.
P4 Development in frugal innovation and its use
It is also known as Frugal engineering. It refers to the process of reducing the complexity
and costs of products by minimizing the use of resources and removing the non essential features
in the manufacturing or delivering or leveraging. This lead to cost of products to goes down.
The process of reducing the cost and complexity of the product is the main aim of frugal
innovation. The goal of primarily frugal innovation is to remove unnecessary characteristics
from the product so that wastage material and costs can be reduces and resources can be
optimally utilised (Kolychev and Prokhorov, 2015).
Essence Drinks Company can apply this process with
 design thinking at the product level
 system thinking
 new ways of product developments and
 Innovative product and business model.
It is important for Essence Drinks Company because it increases the chances for the
growth of the company. It also helps company to protect the environment by reducing the
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wastage and optimum usage of resources provided by environment. It also helps company to
gain customers and societies trust.
LO3
P5 Importance of commercialization funnel and application of New product development
processing
COMMERCIAL FUNNEL
Commercial funnel is a system which helps companies and its members to able to directs
the innovative ideas which can be easily attainable and screened. It is useful tool for the
company who is doing innovation in the products and services. It is the process in which some
steps are involved. These steps are such as Investigation, Development and Shipping products.
This process is known as Funnel Management Process which is a popular approach use by
businessmen and entrepreneurs for the innovation (Datta, Mukherjee and Jessup, 2015).
This process can be used by Essence Drinks Company. According to this process,
Company will first identify that what, how and why sales of the drinks goes down. After
investigate the reason, company found out that increased competition is the reason behind the
decreasing of the sale of the product. Now for the reduction of impact of investigation result,
company will development innovative products i.e. produce different flavours of natural, healthy
and sugar free lassi. After development of new products, company will launch the [products
which is ready for shipping of the products towards customers. In the context of Commercial
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Illustration 2: Steps in Funnel Innovation
Source: Innovation Funnel, 2016.

Funnel, the company has to ensure that customers know about the different flavours being
produced and offered by company so that they can consider the drinks. After that customers will
show interest in the products and give it tries. Thus, customers will purchase those products
(Lim, Darley and Marion, 2017).
IMPORTANCE OF COMMERCIAL FUNNEL
Commercial funnel plays an important role in the success of innovation of the Essence
Drinks Company because it helps company to choose the marketing strategies correctly and
accordingly.
In the initial 2 years, company had enhanced its brand image which can help company to
attract its customers towards new products by using e-marketing strategies, advertising strategies
or personal selling strategies. It helps business to sales more drinks as it helps company to know
that how to attract the customers towards business and its innovative products.
APPLICATION OF NEW PRODUCT DEVELOPMENT (NPD)
In the funnel management process, the 2nd step namely, Development is basically refers to
the New Product Development (NPD). After investigating and knowing about the decreasing
sales of the drinks, Company decided to produce new products which should be innovative,
natural, healthy and sugar free so that customers again can attract towards the company and
company can gain its sales volume.
Essence Drinks Company generates more ideas by various sources in order to come with
some new ideas and company comes with one new idea that is “offer new flavours of natural,
healthy and sugar free lassi”. After generating idea, company screens about the ideas by various
searching and finds that customers will like to try new flavours of lassi because it is healthy and
sugar free. After that company produces new flavours and testing it by checking the new
flavours. After that, company starts preparing the marketing and promotional strategies in which
they mainly focus on the price because of heavy competition in the market. After that they invite
their group of loyal customers and ask them to taste and check the innovative drinks. After that
company know about their feedback on the products. After got positive and some another
modification response from those particular group of customers, company modifies their
products and launches its new drinks through different promotional and marketing strategies
(Henttonen and Lehtimäki, 2017).
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P6 Innovation business case and ways of access funding
INNOVATION BUSINESS CASE
For the development of Innovation Business Case, the company have to prepare the
budget which are as follows -
Innovation Business Case
Expenses Costs
Marketing and Promotion £200.00
Manufacturing £120.00
Raw Material £300.00
Management and employees £500.00
Equipment's £150.00
Total £1,270.00
WAYS OF FUNDING
Essence Drinks Company wants funding because of various reasons such as its sales,
profits and revenues are decreasing, for the launch of new drinks and maintain the sustainability
of the business, starting producing new products and for that need to purchase more raw
materials, equipments and machines etc., the growth of the business by entering into new market
and bearing daily expenses, company needs working capital and funds. Thus, company needs
funding (Xiao, Li and Liu, 2016).
There are various sources through which Essence Drinks Company can access the funds.
These various funding sources are as follows -
Business Loans
It is a form of bank loan where a bank gives loans to businesses. This loans can be short
term or mid term loan. It can be given to small – medium – large enterprises depending upon the
requirements. Business loan are given with the particular interest rates which has to be repay
with the principal amount at the time of repayment of loan.
Essence Drinks Company can use this source of finance for the raising of funds for the
business.
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Angel Investors
Angel investors are those individuals who are generally wealthy or retired executives.
They likely to invest their money in those small and medium company who is working in the
same industry to which investors are belonged. They not only provide them funds, but also
provide networks, knowledge and experiences which can be beneficial for the company.
Essence Drinks Company can use this sources by contacting with them or their associate
in order to attract them towards company's innovative projects.
Venture Capital
Venture capital is also known as private equity. It is a way of financing in which venture
capitalist provide their money to the start-ups and small businesses as a capital. If they believed
that the company, in which they are investing has the potential for growing in the future, they
will invest in them. It is not necessary that they will invest in every businesses. They provide
their money in one condition and that condition is that company have to sale their shares to
venture capitalists (Hossain and Kauranen, 2016).
Essence Drinks Company can opt for this source of funding if company has 2 things -
 Potential Growth Shares
Government Grants and Subsidiaries
Government, its authorities and agencies provide small companies various kinds of grants
and subsidiaries in case if company is eligible for taking grants and subsidiaries. It is the most
tough source of funding / finance. There are various criteria which need to be fulfil by company
in order to take grants or subsidiaries. These criteria are as follows -
 A detail description of the project
 A detail business plan with estimated budget
 Completion of all the formalities and application forms.
Essence Drinks Company can take grants and subsidiaries if company is eligible and
fulfil the criteria mentioned by the grants and subsidiaries providers.
LO4
P7 Different tools for develop. Retain and protect knowledge and intellectual property
INTELLECTUAL PROPERTY (IP)
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