The Significance of Innovation: A Report on Farmfoods' Success

This report provides a comprehensive analysis of Farmfoods, a British frozen food supermarket chain, and its approach to innovation within the competitive food industry. It explores Farmfoods' history, from its founding in 1955 to its expansion across the UK, highlighting its adoption of new technologies like online distribution and customer support. The report delves into Farmfoods' existing innovation performance and capabilities, including its VRIO analysis, which assesses the value, rarity, imitability, and organization of its resources. Furthermore, the report examines the industry landscape in 2016, applying Porter's Five Forces model to understand the competitive environment and identify strategies for profitability. The conclusion emphasizes the crucial role of innovation in maintaining a competitive advantage, recommending that businesses evaluate consumer backgrounds, market demands, and competitor strategies to effectively implement innovative practices.

Managing innovation in
business

EXECUTIVE SUMMARY
Business innovation means that making changes that added value in terms of either
revenue growth or enhancement in operational efficiency in organisational development and
enhancement. Respective value can be added by introducing the new products and services or by
using new business model. Respective report is based on the significance of innovation for
organisation and required attributes to imply innovation in organisation.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY ..................................................................................................................................4
The Industry in 2016....................................................................................................................5
The organisations existing innovation performance and capabilities..........................................6
REFERENCES .............................................................................................................................10

INTRODUCTION
Innovation is the important tool or activity of business organisation which helps to
introduce new product and services in market for the purpose of expanding business and getting
higher profits. Without innovation it become difficult for organisation to sustain in competitive
market and get profits. Innovation is taken by management by using this skills and knowledge
which helps to increase the productivity. The main purpose of preparing report is to understand
about innovation and importance in business increases production level. Therefore, Farmfood
has been selected to know about this which has introduced innovation in their business and
making profits. The structure of this report categorised in parts such as about organisation and its
innovation history, existing innovation performance and capabilities. Moreover, this cover
information about industry in 2016 which help to increase the profitability.
MAIN BODY
The Organisation & Industry Overview
About business organisation and its history
Farmfoods is a private British frozen food supper market in Cumbernauld, Scotland. This
organisation was founded in 1955 in order to providing frozen food products and services. This
organisation has expanded their business by bringing innovation throughout the United Kingdom
and it has over three hundred stores (Alexander and Joe, 2019). This basis of this organisation
on Aberdeen which is meat manufacturing business. In beginning of 1970s, experimental freezer
was set up in Aberdeen, that helped to become a successful business. The entire business of
Farmfoods has changed its manufacturing and distributing process where it brought innovation to
distribute products via online across the border. In 1988, such company had expended to thirty
one stores and become competitor of others. This organisation provides better quality of foods
which attracts customers and encourage them to buy them. The main aim of Farmfoods is to
producing foods and other crops which is basic facility in food production. This organisation
gained entry into England in around 1990, by acquisition of eighteen stores from Wallis Frozen
Foods. It has been evaluated that it has over 300 specialist freezer centres across the UK. The
organisation is continuing to focus on providing frozen food in upcoming period where it
developed range of goods by including dried goods, cleaning products, caned goods, fresh fruit,
veg and drink, chilled items, confectionery which attracts people and buy the products (Brand

and Blok, 2019). This organisation is listed on stock exchange which helps to capture the market
image and share. It has created innovation until 2019 which helps to growth the business
effectively. This believes in constant innovation which helps to introduce product and services in
effectively manner. This make customers delighted and satisfied by completing task and
providing better quality of products and services. The innovation is making good food and get
ready chefs always working on creating delicious recipes for enjoy, innovation in meal size such
as Hearty meal, Main Meal and Mini Meals which helps to compete with others. Innovation in
this organisation helps to increase the production and profitability. Moreover, new technology
such as fast delivery, online distribution, customer support service, online feedback, payment etc.
are used by organisation.
The organisations existing innovation performance and capabilities.
Farmfoods Limited is a British frozen food supermarket chain in the market of Scotland,
UK. Respective organisation is one of frozen food specialist that expanded throughout the whole
UK to 320 stores for selling the frozen, chilled and ambient products (Lenssen and Smith,
2019). By using the three distribution centres in Cumberland, Warrington and Birmingham they
can be able to serve the each third of their stores. The major capabilities and value addition
applied by them that they engaged the specialist consultants of the supply chain consulting group
to review the operations and capacity constraints to distribute the products and services in proper
manner. It deals in the retail industry that deals in the frozen food and grocery by operating in the
330 and more than locations in the whole world. The major strength of respective organisation
that they focus on adding value in their products by acquire the other firms. While they enter into
England in around 1990 they acquire the 18 stores from the Wallis Frozen foods. By using the
specialised kind of freezer centres across the UK marketplace. Their stores typically located in
city and town centres that facilitate people to reach at large no. of consumer base in positive
manner (Loon and Chik, 2019). The another areas that shows their strength which is expansion
in their current product line as they developed the range of grocery items that includes the
cleaning products, dried goods, canned goods, confectionery, chilled items, fresh fruits and
drinks. The major valued added attribute that is they use mix of branded and own brand goods so
that all kinds of consumers can access towards the organisational products and services.
For an organisation to access their own capabilities it is very much important to use the model. In
context of Farmfoods their VRIO analysis are as follows:

Resources Valuable Rare Inimitable Organized
Employees YES
Food quality YES YES
Market expansion YES YES YES
Work culture YES YES YES YES
 Value: Valuable is one of the most important attribute for Farmfood that helps to
organisation in gaining competitive advantage. The major factors that valuable for them
are as follows:
◦ Employees: Employees are very much important for respective organisation as they
contribute in their working that are rare in nature. Their product meaty crisps is very
much popular within the people (Ottosson, 2019). So to retain employees in
organisation provide the various kinds of benefits comprehensive training in
leadership and management, six weeks annual leave and many more.
◦ Work culture: They build positive work culture by distributing the roles and
responsibilities in which every one can give their positive contribution.
◦ Market expansion: They focus on expansion of market and products as they started
their business from the butcher shop and now they operating more than 330 stores so
they have strong market expansion strategy.
◦ Food quality: By setting standards in order to maintain the quality of products, as they
have specialised team of people that can choose from site the meat would like to
purchase and then they sell the same product to ultimate consumer.
 Rare: Respective are the resources that are rare in nature that is give competitive
advantage to the organisation that are:
◦ Food quality: Food quality is very much rare as they provide the option to consumer
that they can select food and its ingredients.
◦ Market expansion: They enlarge business opportunities in the whole world as they
operated in more than the 330 markets (Radziwon and Bogers, 2019).

◦ Work culture: They take care of each and every kind of necessities of their workforce
such as provide fair remuneration, free life insurance and various activities in which
people can work collaborative.
 Inimitable: Respective sources that are very important for organisation that not easily
copied by organisation such as market expansion and work culture.
◦ Market expansion: Their market expansion strategies and tactics that helps to
organisation to remain competitive in marketplace.
◦ Work culture: Work culture is factor that helps to keep employee's always motivated
and productive in order to gain potential outcomes.
 Organised: In respective factor organisational products and services are organised in
proper manner so that desirable goals and objectives should be attained. In context of
Farmfood work culture is important factor that needed to be organised to gain desirable
outcomes (Skvortsova, Latyshev and Truntsevsky, 2019).
So from the above discussion it has been summarised that respective organisation is very much
competitive in marketplace as they have rare products that are mostly liked by consumers.
The Industry in 2016
With passing of each year, food industry is drastically reshaping itself in context with
food production and consumption along with food retailing. It tends to bring more changes in
upcoming future years (Erdogan, Rondi and De Massis, 2019). Growth in food industry is
increasing because of technology and innovation and individuals are also bringing change in
their food habits which is also a major reason for introducing change in the industry. In future
days,technology will bring drastic shift in traditional methods of food industry in their
production and manufacturing. Porters five forces can be implement to Farmfoods for
understanding competitiveness of business environment and for finding out strategy for potential
profitability in order to meet with target goals and objectives. It is a sort of tool for identifying
effectiveness of organisation and its profitability. Porters five forces are discussed here.
 Competition in the industry: It is first of the five force which refers to ability as well as
number of competitors in the market. Large number of competitors along with the
products and services they provide will eventually lessens the power of an orgnaisation.
However, less competitors will bring more power to the company and they can set their
prices higher.

 Threat of new entry: New markets generally attracts new organisations, which in turn
results in low profitability. Strong barriers of industry such as economics of sale, patents,
government policies or many more can be helpful for existing company as it will reduce
the chances of new entrances to enter in new market.
 Power of suppliers: It is one of a important force of Porters model as it address how
supplier splay a major role in increasing costs. Fewer suppliers of the industry will made
the company to be dependent on suppliers to provide them goods. Suppliers will have
more power and they can demand with company as per their wish and requirement,
However, large number of suppliers will lead to profit for the organisation as they can
keep their input costs lower.
 Power of customers: It refers to the ability of service users to drive cost lower or higher
as per their demands (Kupeshova, Lazanyuk and Kareke, 2019). It is majorly influence
by how many service users are linked with a company and how significant are the
customers. A smaller customer base means that each and every customer has a right to
lower the prices and to make deals accordingly. Customers can negotiate with the
company and it will somehow leads to reduce profitability.
 Threat of Substitutes: This force of porters five force model focus on substitutes. Goods
and services that could be a substitute for the products of the organisation could be a
threat. Thus, organisations that produce unique products that are no close to the
substitutes poses more power to increase their prices. Availability of close substitutes will
create an option for the customers to overlook the company product and it can lead to
weakened the power of company.
Thus, Porters five forces model will enable Farmfoods to develop a business strategy for
better utilization of their resources in order to bring innovation and creativity in their products. It
will bring profitability in their organisation and help them to meet with target gaols and
objectives.
CONCLUSION
From the above report it has been concluded that innovation is very much important for
an organisation as it helps to remain competitive and sustainable within the business
environment in positive manner. Innovation in the products and services helps to offer high
quality as well as competitive edge for the potential consumers to remain competitive in

marketplace. To bring innovation it is very much essential to evaluate the background of the
consumers, market demand and competitors strategy in order to apply innovative work and
activities within the organisation. By using the VRIO model an organisation can be able to gain
the competitive strength that build distinctive effect in comparison to their competitors in
effective manner. With the help of Porter's five force model organisation can evaluate the
competitors strategies to bring innovation in organisation.

REFERENCES
Books and journals:
Alexander, B. and Joe, T. eds., 2019. Managing innovation: understanding and motivating
crowds (Vol. 32). World Scientific.
Brand, T. and Blok, V., 2019. Responsible innovation in business: A critical reflection on
deliberative engagement as a central governance mechanism. Journal of Responsible
Innovation. 6(1). pp.4-24.
Erdogan, I., Rondi, E. and De Massis, A., 2019. Managing the tradition and innovation paradox
in family firms: A family imprinting perspective. Entrepreneurship Theory and
Practice, p.1042258719839712.
Kupeshova, S.T., Lazanyuk, I.V. and Kareke, G.T., 2019. Risk Management in the Innovation
Project. Central Asian Journal of Social Sciences and Humanities. 1(1). pp.9-12.
Lenssen, G.G. and Smith, N.C., 2019. Managing Sustainable Business. Springer.
Loon, M. and Chik, R., 2019. Efficiency-centered, innovation-enabling business models of high
tech SMEs: Evidence from Hong Kong. Asia Pacific Journal of Management. 36(1).
pp.87-111.
Ottosson, S., 2019. Developing and Managing Innovation in a Fast Changing and Complex
World. Springer Books.
Radziwon, A. and Bogers, M., 2019. Open innovation in SMEs: Exploring inter-organizational
relationships in an ecosystem. Technological Forecasting and Social Change. 146.
pp.573-587.
Skvortsova, I., Latyshev, R. and Truntsevsky, Y., 2019. Innovation through improvement in the
energy efficiency of business processes. In E3S Web of Conferences (Vol. 110, p.
02167). EDP Sciences.
Szutowski, D., Szulczewska-Remi, A. and Ratajczak, P., 2019. Managing innovation processes
in industrial sector. Qualitative study. Economic research-Ekonomska istraživanja.
32(1). pp.282-300.
Teplov, R., Albats, E. and Podmetina, D., 2019. What does open innovation mean? Business
versus academic perceptions. International Journal of Innovation Management. 23(01).
p.1950002.
Online:
Former armed forces management development, 2020. [Online] Available through.
<https://www.farmfoods.co.uk/former-armed-forces_mdp.php>.
Farms case study, 2020. [Online]. Available through.
<https://www.sccgltd.com/case-studies/case-study-farmfoods-network/>.

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