Innovation and Commercialization in Business: Strategies and Funding

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INNOVATION AND
COMMERCIALIZATION
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Table of Contents
INTRODUCTION............................................................................................................................. 3
LO1.................................................................................................................................................4
P1 EXPLANATION OF INNOVATION AND ITS IMPORTANCE TO ORGANISATION WITH
COMPARISION TO INVENTION...................................................................................................4
P2 EXPLANATION OF HOW ORGANISATIONAL VISION, LEADERSHIP, CULTURE AND
TEAMWORK CAN SHAPE INNOVATION AND COMMERCIALISATION.........................................6
LO2.................................................................................................................................................7
P3 EXPLANATION OF 4 PS OF INNOVATION AND EXPLANATION OF USE OF INNOVATION
FUNNEL TO EXAMINE AND SHAPE INNOVATIVE IDEAS..............................................................7
P4 EXPLAIN THE DEVELOPMENTS IN FRUGAL INNOVATION AND EXAMPLES OF HOW IT IS
USED IN ORGANISATIONAL CONTEXT......................................................................................10
LO3............................................................................................................................................... 11
P5 EXPLANATION OF IMPOERTANTANCE OF COMMERCIAL FUNNEL AND THE APPLICATION
OF NEW PRODUCT DEVELOPMENT (NPD) PROCESSING FOR COMMERCIALISATION OF
INNOVATION............................................................................................................................11
P6 DEVELOPMENT OF AN INNOVATION FOR AN ORGANISATION INCLUDING WAYS TO
ACCESS FUNDING.....................................................................................................................12
LO4............................................................................................................................................... 14
P7 EVALUATION OF DIFFERENT TOOLS THAT AN ORGANISATION CAN DEVELOP, RETAIN AND
PROTECT KNOWLEDGE AND INTELLECTUAL PROPERTY...........................................................14
CONCLUSION............................................................................................................................... 16
REFERENCES.................................................................................................................................17
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INTRODUCTION
Innovation is generating new processes, new product or new ideas for business. This
assignment is aimed at innovation in organisations operations and products and
commercialising the idea. Innovation, its significance and its comparison with the invention are
to be discussed here. Innovation is of different types and like marketing, mix innovation has 4
Ps of innovation. To examine and formulate new ideas about how innovation funnel can be
used is to be analysed in this assignment. Process for commercialising the innovative ideas is
the most important step as innovative ideas are useless if they cannot yield profit. New product
development with the application of funnel innovation for the process of commercialisation is
being explained here. Sources of fund for the innovative project of an organisation can be done
through building a business case which is also to be built in this assignment. Intellectual
property is important to be preserved and protected for this the different tools are to be
evaluated in this assignment.
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LO1
P1 EXPLANATION OF INNOVATION AND ITS IMPORTANCE TO ORGANISATION
WITH COMPARISION TO INVENTION
Innovation – Innovation refers to improving the existing products, developing new products,
changing the existing process of manufacturing products and for service providers the change
can be in improving the existing services, creating new ideas and using them to bring growth in
business. Innovation adds value to the product and it should be added to every activity of
business so that it becomes part of the business and becomes an inbuilt criterion for
performing every activity with innovation and creativity (Teece, 2012).
Importance of innovation to the organisation
 Competitive advantage- Innovation helps in gaining competitive advantage as the new,
unique business ideas, innovative business strategies create differentiation for the
company from its competitors in the eyes of its customers.
 Brand image - Through innovation, there is an addition to company's brand image or if
there is no brand image than it helps in creating a brand image, coming up with new
ideas is always more preferable than the qualitative but old product.
 Customer retention and customer attraction – Innovating the existing range of
products is key to retain loyal customers, regular up gradation and innovation satisfies
the needs of existing customers and give them reason to stick to this same brand and
don’t shift to the competitors, mouth publicity is the most effective way of promotion so
retaining existing customers can also help in attracting new and prospect customers.
 Increase in revenues and recognition- In the industry where innovation and creativity
are appreciated more than the company's profit, innovation spreads worldwide and is
recognised which increases goodwill and revenues as all the companies cannot innovate
so they buy the same from innovators and hence innovation can increase revenues. Like
Google has its Android software that is bought by Samsung, Nokia and other phone
companies.
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Innovation v/s Invention
Innovation is many times misunderstood by the invention, the invention is developing a product
or idea for the first time but innovation means improving the existing products or changing the
existing business model. Innovation is strategizing new ways of improvement according to the
change in environment. Innovative ideas are made to solve the problems in business operations
and create a new business model that can increase revenues for the company and help to fight
with the environmental changes. The invention is the discovery of the product for the first time
and innovation is not discovering a new product but it is renovating the existing product
(Herzog and Leker, 2010).
The invention is the cause and source of innovation if there is no invention there cannot be an
innovation. Innovation is the second step for the product that is already developed at the time
of invention.
INNOVATION INVENTION
Existing product New product
Research is already done about the acceptance
of the product by consumers. Research and
development are required occasionally.
The survey of the market is not done earlier.
Research and development is done before the
invention
Moderate or high investment but lower than
the invention
A higher capital requirement, as well as the
human capital requirement, is more than
innovation.
Comparatively less time consuming than the
invention
Research and development of a whole new
product require a long time.
Trademark and copyright are needed
sometimes when the idea is new or the
business model is new or technology is new
not when the product is improved or changed
in its flavours.
Mandatory copyright is required as the new
product is invented and through this, it can
earn huge capital by selling the same.
Innovation is always linked to
commercialization.
The invention may be or may not be always
used for commercialisation.
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P2 EXPLANATION OF HOW ORGANISATIONAL VISION, LEADERSHIP, CULTURE
AND TEAMWORK CAN SHAPE INNOVATION AND COMMERCIALISATION
Every organisation has a vision and a mission with its own working culture, the vision is always
long term and is a part of every activity of the organisation and its strategy. For a company’s
success and growth, the CEO needs to have a clear vision, mission and cultural values of the
company. These factors of leadership, vision, mission and teamwork add to the
commercialisation of innovation and help in guiding the company towards the achievement of
organisational goal. For example Vision of becoming UK’s best pharmaceutical company which
provides best treatments to the people in the UK, so for this, the company will strategies and
act according to customer satisfaction, by innovating according to the desires and wants of the
common people who can be the customers of the company.
Diversity – Diversity within the organisation in employees, their culture and values brings
innovation and creativeness in the work. Diversity leads to a different viewpoint and enables to
broaden the area of thinking capabilities, so the organisation's culture brings innovation at the
workplace.
Feel free to give ideas –To allow and promote the employees for providing innovative and
creative ideas to their supervisor or manager so that they feel free to give ideas that are cost
effective and new. The employees who are creative should be recognised and awarded for their
new ideas. So having this type of culture promotes innovation and commercialization.
Motivation – Through motivation and teamwork innovation can be shaped. The leader and
manager is the one that can solve the problems through innovative and creative manner
motivating them to work together as a team giving each other’s advice suggestions and try to
solve problems of your team members, this act as an influencer to the team members, they will
also be motivated to solve problems by new, unique and creative manner. To promote
leadership, a perfect leader is not only needed but the team should also be as good as a leader,
the team members, the team should have technical skills, ability to adapt to the environmental
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changes, be able to think in a broader perspective. The leader has to motivate them, guide
them and prepare them to face the challenges by innovating or reacting creatively.
LO2
P3 EXPLANATION OF 4 PS OF INNOVATION AND EXPLANATION OF USE OF
INNOVATION FUNNEL TO EXAMINE AND SHAPE INNOVATIVE IDEAS
4P's model was developed by John Besant and Joe Tidd. This is a tool that measures the
intensity of innovation in improving your business’s capabilities and revenues. This model of
gives the business direction and departments or areas where innovation can to be done, not all
parts or processes are to be changed the process or the models which require change is to be
innovated or where the problems need to be solved creatively than innovation is required.
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Figure- Four P’s of Innovation
Source- P’s of innovation, 2019
Four P’s of innovation are-
Paradigm – paradigm means to change and improve the way in which the company do its
business. The improvement or changes in the way of doing business may result in positive and
negative impacts, the risk of profit reduction can affect the decision making for innovation,
whether it is to be done or not. Changing business models like adopting total quality
management, changing the core strategy of doing business is called innovation in paradigm
(Aithal, 2016).
Product- This means improvement or innovation in the existing products offered by the
company, how the existing product can be made more attractive for the customers than the
other products in the market, analysing the wants and desires of customers not focusing on
what customer buys. The customer is king and to innovate product according to customer
needs can yield a lot of attention and customers will be directly influenced by the
improvements (Aithal, 2016).
Process – the process of creating the product can also be modified or innovated. This includes
all the steps of business starting from hiring the people and ranging to supply management,
training them etc. what should be done to enhance these elements so as to achieve more
efficiency and effectiveness in company’s performance. The process includes the small
reductions in the wasteful steps that can reduce wastage costs, through proper training the
wastage can be reduced and the efficiency of the product can also be increased. Through
implementing new technology like inventory management software the workload of the
employees can be reduced and time will be saved (Aithal, 2016).
Position- how the company position itself in the consumer market is dependent on the
company, the audience it wants to target according to the demographics like age, gender
income group etc. Like apple came up with pink colour phones for female users, this is a
demographical innovation strategy (Aithal, 2016).
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Innovation funnel
Figure- Innovation Funnel
Source- Green book blog, 2019
Innovation funnel is focused on converting an idea into reality, this is done by converting a
concept that can become a product, satisfy the need of customers also market need. It should
be able to contribute economically and can be manufactured or feasible for production. There
are three parts of an innovation funnel first is wider part of funnel where a lot of ideas go
through investigation about their feasibility, customer acceptance, payback finance etc., if the
idea is feasible than it is shifted to narrower part of the funnel that is developed where the
chosen idea is developed and then shifted to the third stage of final distribution of
manufactured product into market (Zandoval Bonazzi and Ari Zilber, 2014).
Use of innovation funnel to shape innovative ideas-
Innovation funnel provides a graphical representation of various options and ideas out of which
only one can turn into a product concept that will be representing the company's product. This
helps in choosing the feasible product that can yield in monetary terms and will be accepted by
the consumer and will satisfy their needs.
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P4 EXPLAIN THE DEVELOPMENTS IN FRUGAL INNOVATION AND EXAMPLES OF
HOW IT IS USED IN ORGANISATIONAL CONTEXT
Frugal innovations include responsiveness to the limitations of the innovative idea or model.
The limitations include financial limitation, limitation in other resources material or institutional
limitation etc. Frugal limitation enables lowering the cost of products and services that are
offered by the company. The successful innovations are not only achieved by cost innovations
but to outperform the different alternatives can lead to successful frugal innovations. This
innovation is also inclined to the social welfare and innovating lives of people through
innovation in products mostly and also through redefining the processor business model
through frugal innovation (Zeschky et al., 2011).
Frugal ways to innovate and promote lassi in the UK market-
Promotion In fairs and events- The country events of summer where the fairs are set up or in
the community fairs where a stall can be set up and can provide for lassi at the very reasonable
and cheap rate this way penetration in consumer market becomes easy.
Promotion through social media – Social media is the cheapest and covers the widest area of
customer reach. The social media pages that induce customer attraction and this social media is
very economical and effective.
Through creating a strategy that creates value for the consumer product and cost-effective the
company can easily do frugal innovation for this company.
The company can choose its target audience and people whom it wants to target mainly should
be analysed and strategies related to the same will be formulated to produce innovation in
Lassi. Especially in summers Lassi can boost up the energy level of sports person and can
maintain the hydration level of people during summers and plus it is tasty.
Introducing a range of new flavours in the same lassi other than mango lassi can be a frugal
innovation technique that can attract customers.
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LO3
P5 EXPLANATION OF IMPOERTANTANCE OF COMMERCIAL FUNNEL AND THE
APPLICATION OF NEW PRODUCT DEVELOPMENT (NPD) PROCESSING FOR
COMMERCIALISATION OF INNOVATION
Commercial funnel- the commercial funnel is also known as purchase funnel of innovation and
this is focused on consumer behaviour and preferences, there are 4 steps of innovation i.e.
creating awareness, opinion creation, consideration, preference setting and last step is to make
the customer purchase the product. The commercial funnel of innovation describes the process
consumer goes through on buying a product or services (Tukker and Tischner, 2017).
Importance of commercial funnel/ purchase funnel-
Commercial funnel can be used to attract customers and net revenues for the company. As the
company has a very innovative product of mango lassi and in the first two years it was earning
profits but now it is incurring losses so to lift up the company again it needs to commercialise its
innovation by making people realise the benefits of lassi and introducing some more flavours of
lassi like rose flavour lassi etc. by commercialising the company can earn back its customers and
sales both at the same time.
New product development- New product development is a type of innovation where a new
product is made that is based on consumer preferences and customer desires and wants.
Application of new product development for commercialisation of Innovation-
The product developed through innovation should be feasible and should be able to yield good
revenues and profits, for this the calculation for future profits is to be done before the product
enters the market. The product demand and price of the product will give you revenues and the
revenues will be subtracted by the expenditures used in developing a product. These expenses
will include promotion expenses, raw material costs, manufacturing and labour costs etc. , if the
result is positive and profitable than it should be allowed to enter the market.
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