Innovation and Commercialisation Analysis: O2 Business Report

This report examines innovation and commercialization strategies, focusing on O2 (Telefonica UK Limited) as a case study. It explores the differences between innovation and invention, highlighting the importance of organizational factors like vision, leadership, culture, and teamwork in shaping innovation and commercialization. The report delves into the 4Ps of innovation (product, process, position, and paradigm) and the use of the innovation funnel to refine ideas. It further analyzes developments in frugal innovation, emphasizing its role in creating cost-effective solutions. Additionally, the report discusses the commercial funnel, the new product development process, and provides a business case analysis of O2's innovations, concluding with a look at organizational tools that support innovation and protect intellectual property. The report is a comprehensive overview of innovation management in a business context.

INNOVATION

TABLE OF CONTENTS
INTRODUCTION................................................................................................................................3
TASK 1.................................................................................................................................................3
P1. Innovation and its importance in comparison to invention...................................................3
P2. Organisational factors shaping commercialisation and innovation......................................4
TASK 2.................................................................................................................................................5
P3. 4P's of innovation and use of innovation funnel...................................................................5
P4. Development in Frugal Innovation.......................................................................................6
TASK 3.................................................................................................................................................8
P5. Commercial funnel and application of new product development process..........................8
P6. Innovation business case of O2..........................................................................................10
TASK 4...............................................................................................................................................11
P7. Organisational tools............................................................................................................11
CONCLUSION..................................................................................................................................12
REFERENCES...................................................................................................................................13

INTRODUCTION
Innovation means bringing something new or unique in market. It refers to providing better
solutions to the problems and meeting new requirements in the existing markets. Whereas,
commercialisation is a process of introducing new products or new production method in the
market. Here, more focus is given to mass market rather than niche. The organisation referred here
is O2, also known as Telefonica UK limited. It is headquartered in Slough. O2 is the second largest
mobile telecommunication provider in UK after EE Ltd. (Aarikka-Stenroos and Sandberg, 2012).
O2 successfully launched its 4G connection using LTE in 2009 itself which was very early as
compared to other companies. This report will include the detailed knowledge about innovation and
its comparison with invention, how organisational factors like their vision, leader, culture and
teamwork can help in shaping innovation and commercialisation. It also includes detailed
knowledge about 4P's of innovation and the use of innovation funnel to shape ideas, developments
in frugal innovation, importance of commercial funnel and also different tools that an organisation
can use to develop, retain or protect the intellectual property.
TASK 1
P1. Innovation and its importance in comparison to invention
Innovation can be defined as a process of translating new ideas into product or service that
adds more value to the organisation. It is used by the entrepreneurs as a specific tool for bringing
some change in the organisation (Zhou and Wu, 2010). An entrepreneur see innovation as a
business opportunity which they can use to do something better. Entrepreneurs acts as innovators in
the organisation by preparing new combinations through different factors of production and then
presented in the market for the consumers. Commercialisation can be defined as a procedure of
driving idea into the market. It is the process of converting the idea into money. The process
following here is never straight or simple because it acts a good support system in developing the
new products.
O2 acted as an innovator in its field of marketing by introducing the products early than
their competitors and because of this, they became the 2nd largest telecommunication company in
UK. Similarly, Apple is an innovator in their field and so is Virgin. Apple introduced it’s I phone
series which made crazy about them because they were the 1st one to introduce I pod device in
market. Likewise, Virgin group started virgin mobiles as a start-up company which later on became
a global brand. Therefore, these innovative ideas plays an important role in establishing big
businesses in the market and achieving success (Abou-Ras, Dbogers and West, 2012).
Invention is often compared with innovation but both are very different. Invention means
creating something that has never been made before. It is the action of making something new.

Inventions can be patented but innovations cannot. The comparison between invention and
innovation is described as below:-
S. no. Invention Innovation
1 Here then idea s evolved about the
product or service for the 1st time.
Here, the idea which is evolved is
implemented to create new products and
services.
2 Scientific skills are required here Skills which are required here are marketing,
technical and management skills also.
3 It happens when a new idea strikes the
scientist (Chun and et. al., 2015).
It happens when a need is created in the
market about the goods or services in the
market
4 This is taken care in research and
development department of the
organisation.
This is conducted in whole organisation and
has access everywhere.
P2. Organisational factors shaping commercialisation and innovation
Whenever an innovation happens in the organisation, it is not confirmed that it will be a
success because in general innovations have a high failure rate. Some of the reasons for failure for
failure are:-
 Poor leadership
 Poor Communication
 Poor knowledge management
 Poor Organisation structure and many more.
It can be assumed from the points discuss above that management of innovation is very
important in an organisation otherwise it ca lead to failure. An organisation plays an important role
in shaping the innovative ideas inside the organisation. They help innovators in implementing the
idea where innovation is required. The organisation's vision helps in providing the way where the
organisation has to reach finally. When the innovator know where the company has to reach, he try
to create the products which will help the company to achieve its goal slowly and slowly. They
gives a direction to the company (Cunningham and Porter, 2011).
The leadership qualities in a person or in an organisation also helps in shaping innovative
ideas in the organisation through implementing the ideas of the innovators which they think are
beneficial for the organisation. They lead the organisation and therefore they know that what is
good for the organ and what is not so they are in a position to provide help to the innovators in
creating the ideas that are good for the company. They provide good guidance to the people who

develop ideas for the company (Rivera, Johnson III and Ward, 2010).
Culture which is running inside the organisation has a strong impact in shaping new and
creative ideas for the company. If the culture of a company is little traditional so they will try to
adopt methods of production or introducing new products in the market in traditional way only.
Ideas can be created as per the culture of the company very easily because it should suit the taste
and preferences of the customers and the workers as well (Zhou and Li, 2012).
If team work is properly done in an organisation then it is very difficult to compete that
company, because it renders diverged creative ideas that are discussed given by different people
which indirectly or directly help in creating new product concept for the company. When a team
works implement an idea successfully, commercialisation can be implemented easily because the
chances of success increases due to support of so many people and guidance of the employer.
TASK 2
P3. 4P's of innovation and use of innovation funnel
4P's of innovation were invented by John Bessant and Joe Tidd for analysing where
innovation is required and the extent to which it is needed. It is based on the innovation that
successful invention depicts positive change n the organisation and which has put forward four
categories where these changes take place. The 4P's are discussed as below:-
 PRODUCT INNOVATION: - This means innovating the products in the way the customer
requires. It deals with improving the value of the product or service in the market. For e.g.:-
Sun silk shampoo is very famous all over world, they continuously try to bring something
new in their products and the latest innovation they did in their was that signed a de4al with
the hair experts and they only creates customized shampoos for the customers as per their
choices and hair demand.
 PROCESS INNOVATION: - It focusses in the area through which the product is
[processed and is delivered to the customers. If the company will convert its normal process
into an innovative process then it can increase the efficiency and effectiveness of the product
which will later on help in development of the organisation.
 POSITION INNOVATION: - It deals with repositioning the existing product in the market
(new or old) or introducing a new product in the market (Herath, Cranfield and Henson,
2010). Position based innovations deals with the issues of making specific changes the
product as per the demands of the customers and making of a new product as per the ideas
of the innovator and then experimenting it in the market.
 PARADIGM INNOVATION: - It is related with the mental models which shape what a
business or the organization is about. It basically helps the organisation in thinking about

how to achieve the innovation which we have thought about and how will the organisation
organise themselves to achieve this innovation (Hoque, Chishty and Halloway, 2011).
Illustration 1: 4P's of Innovation
Source:- 4P's of innovation,2017
Innovative funnel is a funnel which helps in developing the process of a product in the
company. This acts as a refinery tool where lots of ideas are entered and then one which is best for
the organisation is only selected. It has a very important role in shaping innovative ideas in the
organisation. The process of innovative funnel can be discussed as:-
 In the 1st step, all the ideas which company is having is entered into a refinery system
 If the company has more ideas then chances of producing more types of products is good for
the company so, they will try to select as many ideas as possible (Huizingh, 2011).
 But only those products which fits in the structure if the organisation will only be selected
 The final products which are selected are then later on implemented in the organisation.
Illustration 2: Innovation Funnel

Source:- Innovation Funnel,2013
P4. Development in Frugal Innovation
It refers to reducing the compilations and the cost of goods and services and its production.
It generally deals with reducing the non-essential features in product to make the products sell in the
developing countries (Jagoda and et. al., 2011). These are types of innovations that helps the society
in various ways like reducing the cost of making, low electricity and low prices but provide good
services to its customers. Some of the examples of Frugal products are:-
 Godrej Chotukool fridge: - Godrej invented this product for rural areas of India. This
fridge operates without electricity and provides cooling same as normal fridge. It is one of
the best inventions of India.
 Nokia 1100:- This is considered as a revolutionary phone in mobile industry as it was
available at a very cheap price in the market and was durable and easy to use. Company
sold 200 million units of mobile in just 4 years of its introduction in the market.
There are many other innovations like TATA NANO which was considered as the world's
cheapest car. Developments in frugal innovations have been immense in the present times. The
organisations are trying to prepare the products in less resources which is beneficial for both i.e.
society and company and off course customers who will eventually get then product in low prices in
the market. These types of innovations required a creative mind and a desire to do something for the
society (Cui and Wu, 2016 ).
There are so many frugal products that have been launched in the market but its not that
frugal innovations can only be done in products but it can also be done in services and business
models as well. Vodafone is giving the M-paisa facility its customers through which they can
transfer money to others through an SMS. The products made from frugal innovation is'nt much
advertised using media and all, it is just publicized using mouth publicity and local newspapers.
These innovations acts as a game changer for the organisations because when a company launches
such type of products it is believed that the company is having much amount of expertise and
efficiency in their work (. Omachonu and Einspruch, 2010). Therefore, developments of frugal
products in the organisation acts as a best innovation in the company because it give benefits to the
company in every manner.
O2 being an telecom company has introduced an Air system called as O2 Hurricane Can-
less Air system which is a cheaper alternative to other Can-less Air products. Apple is considered as
the best in commodity innovation but it has still not entered in the frugal innovation segment as
none of the products of Apple are cheap whereas Virgin group focusses on diversification of
services and therefore, they are always innovating new good in new market.

TASK 3
P5. Commercial funnel and application of new product development process
Commercial funnel includes sales and marketing funnel inside it. A sales funnel includes the
way through which the product reaches its customers. After the product is ready there are so many
ways through which the products created in the market but there are only few people who are able
to generate leads for the company and out of those leads only few become clients of the company.
The whole process is referred as sales funnel (Drucker, 2014). Sales funnel is very much essential
for the organisation because through this only the company comes to know that whether they are
using a good, well organised approach to make relationships with the customers or not.
Marketing funnel can be defined as a cone which visualizes the buyer’s journey from
introduction of product till the conversion for purchasing commodity. It shows how a customer is
made aware about the product and how much stages it went through in order to make the customer
their potential buyers so that they can refer it their friends (Kutvonen, 2011). The diagrammatic
representation of marketing funnel is given as below:-
The application of New Product Development process in commercialization of innovation
implies that in order to commercialize the products in the market, it is said that company has to use
the stages ODF new product development (Lundvall, ed., 2010). Through this, company is able to
sell more products in the market. The stages of new product development process are:-
 Idea generation
 Idea screening
 Concept development and testing
 Marketing strategy developments
 Business Analysis
 Product developments
 Market testing
 Commercialisation
In order to commercialise the innovation, ideas are applied in these stages and then product
is developed till the final stage and is ready to sell in market (Snow and et. al., 2011). O2 also uses
same process of developing new products in the market. They have so many products in the market
and so many innovative ideas with them which will help company to grow in market. If we compare
the product development process of O2 and Apple, it is sure that Apple will win because even
though O2 uses this marketing process, it is still not able to beat Apple because Apple's product
development process is very fast and they are introducing new products with latest technology in

the market in less time span only.
P6. Innovation business case of O2
O2 is innovative in all products they produce or sell in the market and all their products are
patented also so that no one is able to design the same product. One of the inventions of O2 is O2
PA. This product is a medical invention specially designed for patients who are suffering from
breathing problem. It is a device which provide hands free ventilation to the patients. According to a
survey in UK, large number of people are suffering from respiratory diseases and it will increase
speedily in the coming five years (Aarikka-Stenroos and Sandberg, 2012). Therefore, O2 came up
within this smart idea and made this device which is very much useful as it is providing more
efficient emergency health care services to its patients.
Various Sources of finance that can be described as follows:-
 Crown Funding – It is considered as a process in which the fund is collected from large no.
of people for a particular venture. It makes use of network in a great manner as through this
they can reach to various people and try to bring small investment from them as well. It is
generally done for new ventures and if the business is failed then lots of investors can loose
their money. So, risk element is little high here.
 Venture Capitalist – These are considered as the fund managers who invest in business of
other people in return for equity in business. It is the most commonly used finance system
which is considered as high risk project (Walsh, 2012). Here, it is considered that the
investee is not required to pay back the amount if the business does not achieve success in
market. Sometimes these types of finances are also called as seed capital.
 Retained Earnings – It is a considered as a part of retained earning that is not paid out of
dividend but is retained by the company so as to reinvest it in their business. In various
cases, companies have retained earnings so that they can invest this money into those areas
where they have growth opportunities. It is also considered as most important form of equity
financing.
TASK 4
P7. Organisational tools
Whenever a new idea is introduced in market, there is always some kind of fear in minds of
organisation that someone can steal or copy their ideas. So, in order to protect them, there are
various tools that are used by organisation to keep their ideas safe and sound. Whenever an
innovative product is introduced in the market and it is successful then there are chances that
company can grow in this product market which means company has to various intellectual

property tools to protect its company and products manufactured. Intellectual property plays an
important role in protecting and gaining the competitive advantage in that innovative product (Song
and et. al). The tools which are used by companies are:-
 Patents: - This is the exclusive right which is given to the companies for an invention of
product is a process which includes a new way of doing something or some new technique
of problem solving. It helps in protecting the owners’ rights over the invention and this is
done for a particular period of time i.e. 20years. It basically implies that the invention which
is patented cannot be used, reproduced and sold in the market without the permission of
owner.
 Trademarks: - This means a distinctive signs that are assigned to as particular product and
then the product is identified by these signs only. It can be in the form of combination of
words, signs, symbols, characters, diagrams etc. It is helpful for customers to identify the
product or services (Thore, 2012). If the product is registered under trademark act then it is
the prime facial evidence of its ownership. The initial term of its ownership is 10 years and
it can be renewed after that.
 Copyrights: - It defined the right given to the person for their literary or artistic work. It can
be given for ant poem, film, song, music composition, acts and paintings as well as
drawings, photographs etc. Any ideas, recipes, facts and work that do not have originality is
not covered in these categories.
 Trade secret: - As all commercially viable ideas cannot be patented, it is suggested that
some ideas should be treated as trade secrets which will be patented at later stage.
All the products which are produced by O2 are patented and no one can make similar
products like them in the market. They have more than 121 products that are patented. Apple is also
having all of their products patented and trademarked and therefore no one in the market is able to
beat Apple which is leading in technological market.
CONCLUSION
This report concludes the details about what innovation is all about and why is it important
in an organisation. It discuss that organisation require to innovate and creative ideas, services,
products within a period of time. The factors related to organisation behaviour, culture, leadership
styles influence the methods of innovation and commercialisation within an enterprise. For that firm
can go through the process of 4 P's which can help in developing then products and other aspect
which need to be modified. To save the cots of production and commercialization, frugal innovation
can be used which helps in creating more revenues. To develop anew commodity and make an
impact in market commercial funnel assists largely by facilitating new innovative ideas for the

launch and feature. An organization need to keep alternate their services within a period of time
according to the market trends and change. Also they can utilize to protect their new invention by
the help of intellectual property rights and structure.

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