Report on Innovation Strategies for Essence Drink Company

This report provides a comprehensive analysis of Essence Drink's innovation strategies. It begins with an introduction outlining the company's goals and the importance of innovation in the beverage industry. The main body delves into the current situation of Essence Drink, including its key activities and challenges, such as declining sales due to market competition. It then explores the organizational vision, leadership, culture, and teamwork essential for shaping innovation within the company. The report also examines the 4Ps of innovation (Paradigm, Product, Process, and Position) in the context of Essence Drink, followed by a discussion on frugal innovation and the importance of a commercial funnel. Furthermore, the report presents a detailed innovation business case for Essence Drink and highlights tools the organization can use to develop, retain, and protect knowledge and intellectual property. The report concludes with recommendations for Essence Drink to enhance its innovation and achieve its business objectives.

INNOVATION

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
P1 Current situation and key activities of organisation...............................................................1
P2 Organisational vision, leadership, culture and teamwork in order to shape innovation.........3
P3. 4Ps of innovation...................................................................................................................4
P4 Frugal innovation....................................................................................................................6
P5 Importance of commercial funnel..........................................................................................7
P6 Detailed Innovation Business Case for business....................................................................9
P7 Different tools that organisation can use to develop, retain and protect knowledge and
intellectual property...................................................................................................................11
CONCLUSION..............................................................................................................................11
RECOMMENDATION.................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Every organisation aims to enhance profit and expand operations across the world. In order
to meet with their objective, they have to deal with different demands of consumers and have to
offer them satisfactory goods and services so that companies can fulfil their requirements.
Innovation assists in making necessary changes in existing process or products that can help in
gaining attention of buyers (Hameed, von Staden and Kwon, 2018). Innovation is considered as
process in which management has to bring new ideas and have to add new values in existing
products for raising operational efficiency. Present study will be based on Essence Drink that
provides soft, hard drinks to customers. Current assignment will explain current situation of the
company and will describe its key activities. Furthermore, it will illustrate 4P’s of innovation
with reference to Essence Drink. Report will describe frugal innovation and importance of
commercial funnel. In addition, different tools will be illustrated that can be used by organisation
to develop and protect its intellectual properties.
MAIN BODY
P1 Current situation and key activities of organisation
Innovation can b defined as bringing new idea in order to add value in product and services
that can help in gaining success to the business. On other hand, intervention is far differed from
innovation. Intervention is related with implementing the new ideas. Companies always think to
implement changes in business so that it can meet with actual demands of buyers.
Essence Drink is the small size beverage firm in UK (Rubera, Chandrasekaran and
Ordanini, 2016). That serves various kinds of hard, soft drinks to the customers. The main
agenda of firm is to attract more buyers and meet with the needs of mass audience. Thus, entity
is planning to make innovation in its products and provide new healthy drink products to its
guest. Essence Drink has initially started selling mango, hard- soft drinks to local consumers at
small level. Later on it has increased its distribution capacity and has implemented innovation
formulas. Recently sales of the firm is continuously declining because of high competition. Now
it has become difficult for the firm to sustain in market for longer duration. Now there is need to
make necessary changes in its existing products and services so that it can retain its buyers and
can sustain in market for longer duration (Elliott and et.al., 2017).
Key activities of Essence Drink include controlling over production, creating branding
strategy for its new innovative product, managing distribution. Company is required to make
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changes in its production process and have to implement new ideas through which it can produce
healthy drinks that can satisfy needs of mass audience.
Innovation and its importance
Innovation can be defined as ideas to make changes in existing process for raising brand
value. It is the act of thinking for adding value to the existing products. This application is
helpful in meeting with the market demands and accomplishing objective of business.
Intervention is far differed from innovation, intervention works to create new product rather than
making changes in existing process (Nicoletti, 2015).
Importance of innovation for employees
 Innovation is very important for growth of business. That helps in bringing new value
and raising brand image of the organisation. It is significant for employees as well,
workers always prefer to work in such firm where they can get career opportunities. By
bringing new ideas entity can attract more consumers that would help in raising profit of
organisation. This will help staff of Essence Drink in order to gain more development
opportunities in the firm (Pellikka and Ali-Vehmas, 2016).
 It is beneficial in improving culture of workplace and raising employee engagement as
well. There is close interrelationship between innovations and employee engagement.
This makes people loyal towards the firm and increas their commitment towards brand.
 Innovation is helpful in breaking monotony lines. People those who work on single
projects, complains for their restrictive monotony but through process innovation entity
can encourage them and this gives them opportunity to show their skills. This helps them
in getting more rewards and recognition (Colombo, Dell'Era and Frattini, 2015).
Different sources of innovation
Various sources of innovation help business in making changes in workplace. These are
such as: necessity, incongruity, market structure, changing perception of consumers etc. If
the needs are incongruent with supply then organisation has to think for innovation. By
this way Essence Drink can resolve issues and can attract more people towards brand.
Market structure is another source of innovation, if there are frequent changes in market
condition then it becomes essential for Essence Drink that to make changes in existing
practices in order to run business according to market situation. As there is high competition
in beverage industry thus, it has become essential for Essence Drink that to bring product
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innovation in company so that it can gain competitive advantage (An and Ahn, 2016).
Changes in test and preference of consumers are another major sources of innovation.
Recently people are more aware towards health, they like to have healthy drinks and food.
Thus, preferences for hard, soft drinks have been decreased thus, company is required to
make changes in its products and provides healthy drinks to them that can attract them
towards brand.
P2 Organisational vision, leadership, culture and teamwork in order to shape innovation
Crating new ideas is considered as main agenda of innovation. Intervention supports in
implementing these ideas into real action. Commercialisation is the process through which entity
can launch its new products and can aware consumers with the services of company. Various
factors help firm in shaping innovation and commercialisation (Kirkegaard Sløk-Madsen, Ritter
and Sornn-Friese, 2017).
Culture: Organisational culture can be defined as values and belief of company.
Organisational culture plays significant role in this respect, it includes values, believes
of the firm. The main agenda of Essence Drink is to satisfy its consumers and raise profitability
of the organisation. For accomplishing this objective entity is required to make changes in its
existing products and have to provide services to buyers according to their requirements. If
entity follows healthy culture then it will help in enhancing satisfaction level of employees. By
this way workers will contribute well in meeting with needs of consumers significantly. Essence
Drink has aggressive culture and it works to meet with its goal thus, it always concentrates on
creating such environment to consumers that they requires so that they become frequent buyers
and support business in gaining competitive advantage (Xiao and et.al., 2016). Essence drink
adopts task culture where all people are given role on the bases of their abilities. This helps in
making them comfortable .By this way they perform their duties well.
Vision: It can be defined as goal or aspiration that entity wants to achieve.
Company’s vision: Essence Drink aims to commercialise its products and services by
implementing innovative products.
Vision is another essential factor that shape innovation, Essence Drink aims to raise its
revenues thus, it has to provide healthy drinks to its guests so that they come in the place
frequently. This would help in increasing sales of firm to great extent.
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Leadership can be defined as is the skill of person to lead team members and contribute
well in achieving organisational goal. Autocratic, democratic, participative are various leadership
styles that impact on employee engagement. If Essence Drink implements democratic leadership
style then it would help business in making effective communication with its workers. By this
way people will be able to share their innovative ideas with management freely, this will help the
firm in implementing necessary changes and shaping innovation for growth of company
significantly. This leadership style would be helpful in managing changes in enterprise (Slater,
Mohr and Sengupta, 2014).
Team working can be defined as active working of all group members in order to
achieve organisational goal. All employees work together that forms an effective team. It is
another essential element that can help Essence Drink to shape innovation and
commercialisation. Team working aids in resolving problems and completing the task within
specified period of time. Leaders of Essence Drink enhance coordination among all team
members and make them aware with organisational goal. Entity gives those rewards and
recognition in order to motivate them. Thus, team of Essence Drink is able to bring innovation
in business and commercialise its new healthy drink product. All team members work in a team
and always try to meet with consumer’s needs (Isasi, Rahimzadeh and Charlebois, 2016).
Essence drink emphases on team working and all team members perform their duties well so that
organisational goal cna be achieved. They all support each other and if any person finds
difficulty then other person help them to complete their allotted work.
All team members are highly engaged with business unit, they share their innovative
ideas. Entity considers their views and makes changes in existing practices. This is helpful in
brining innovation in firm. Thus, teamwork helps Essence drink in encouraging innovation.
P3. 4Ps of innovation
Innovation can be defined as translating the ideas into end products that can create value
for business. It is the process of encouraging new ideas and implementing it in actual workpalce
atmosphere. Innovation is the most essential element that helps business in creating unique
image and implementing necessary changes that can help in improving brand image of the firm.
4P’s of innovation in Essence Drink are described as below:
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Figure 1: Innovation elements
(Source: Innovation management (4) - '4 P's of Innovation' – Emagazin, 2018)
 Paradigm: Essence Drink plans to make changes according to market requirements, now
people like to have healthy food and drinks thus, entity has planned to provide then healthy
drinks so that their needs can be met.
 Product: It is considered as most essential part of business, by offering high quality goods
and services companies attract consumers and make them satisfy towards brand. Consumers
are the assets of business and they add value to organisation. Essence Drink is planning to
make changes in its products and plan to launch new healthy drink product. It has to
considered needs of buyers and have to provide them immediate services. this will be
beneficial for Essence Drink in order to raise its profit and gaining competitive advantage as
well. This is the main item that can help in commercialisation of product (Chesbrough,
Vanhaverbeke and West, 2014).
 Process: Another essential innovation element can be defined as procedure of serving to
consumers. If delivery process is not good then consumers may become negative towards
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the brand. Essence Drink will reduce waiting time and will offer quick services to its
potential consumers.
 Position: Essence Drink wants to be in the leading position and want to provide high class
services to its buyers.
Innovations funnel of Essence Drink
Company has to ensure and implement the best way through which it can provide best
services to the potential customers (What is Intellectual Property, 2018). There are various
kinds of funnel that can help the Essence Drink in driving this innovation and maximising
profitability of the organisation. First Essence Drink will have to gather necessary information
about needs and demands of buyers so that it can implement changes accordingly. In the next
stage it has to do screening of ideas that can be best suitable in order to fulfil needs of
consumers. In the third stage, company will have to implement the innovative idea in such
manner so that actual objective can be obtained. Entity has to emphases on consequences and
opportunities that can be caused by implementing this innovative ideas and it has to be prepare to
minimise the issues and strength the changes (Innovation management (4) - '4 P's of Innovation'
– Emagazin, 2018). This will help in implementing ideas and actualisation of ideas.
P4 Frugal innovation
Frugal innovation is considering the process for reducing complexity and minimising cost
of production. In this process management always ensure to remove nonessential elements so
that net profit can be increased. It s main purpose is to enhance revenues by utilising existing
resources significantly. Frugal innovation is highly depends upon various factors such as social
condition, environment, political elements etc. All these factors contribute well in shaping
innovation. The main agenda of Essence Drink is to increase its sales by providing satisfactory
products to the consumes (Isasi, Rahimzadeh and Charlebois, 2016). For that it is planning to
introduce new health drink , for producing this new product it will have to spend money. Bt
frugal innovation practices helps the business in minimising unnecessary cost and making
modification ideologically.
Company wants to serve to mass audience thus, it has planned to keep prices of this new
healthy drinks low. Thus, in order to offer lower price products firm will have to reduce cost and
have to minimise all complexity related to production. This process wills help the firm in
reaching to potential buyers. If there is involvement of complex procedure then sophisticated
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buyers will not take interest in these innovative products (Chesbrough, Vanhaverbeke and West,
2014).
In order to implement frugal innovation process Essence Drink will have to consider all
these social, environmental factors carefully. Customers of UK are very health conscious and
they prefer high quality goods and services. Thus, entity has to gather all necessary information
and have to design new product accordingly so that it can meet with expectation of consumers in
UK. Frugal innovation practice will be beneficial for Essence Drink in order to minimise
complex functions and running operations significantly in country (Slater, Mohr and Sengupta,
2014).
P5 Importance of commercial funnel
Commercial funnel is also known as purchase funnel. It is helpful in demonstrating
consumer’s journey towards purchase of particular product. This is beneficial for business in
order to increase awareness of consumers and making them positive towards brand. This is
helpful in promoting products and turning potential buyers into actual consumers. This aids
business in retaining customers in business for longer duration.
When entity makes changes in its products or implement any new idea then it might
increase risk for the business (Isasi, Rahimzadeh and Charlebois, 2016). First risk is increase
cost, commercial funnels allows Essence drink to make people aware with its new product and
attracting them towards this new health drink. Entity analysis the value and market this new
items accordingly so that sales can be increased.
Application of new product development
New product development can be defined as process of making changes in existing
products and developing values of existing products.
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Figure 2: NPD process
(Source: Stages process steps of new product development, 2012)
Various stages need to be followed by Essence drink for developing its new health drink.
 Idea generation: It is first phase in which company has to generate idea.
 Idea screening: All ideas are being screened
 Business analyses: After that entire business is being analysed through internal and
external analyses methods.
 Product development: It is the first phase in which enterprise will have to develop the
concept which kind of product it wants to serve to buyers. It has to consider needs of
potential consumers and accordingly has to design its product.
 testing: It is the next phase in which Essence drink has to test this concept whether people
will by it or not (Slater, Mohr and Sengupta, 2014). By launching item for certain period
and by reviewing sales of that product within certain time duration entity would be able
to measure the success rate. Furthermore, it can conduct survey to identify needs of
people so that according to their preference it can design its goods and services.
 Design and engineering: higher authority designs the products and set the prices that can
be afford by people.
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 Product development: At last, product is being development that meets with the needs of
consumers (Xiao and et.al., 2016).
 Review: At last entire developed product is being reviews.
P6 Detailed Innovation Business Case for business
Essence drink company started its business in 1986. Essence drink provides variety of
authentic soft drinks and beverages to its customers by using the highest quality of fruits and
botanicals. The products offered by Essence Drink Company are soft drinks, ice-creams, bakery
products, beverages, stabilizers, etc. In addition, it further aims at bringing innovation in its
operations and developing a tasty healthy drink which can benefit company to gain competitive
advantage (Elliott and et.al., 2017).
Essence Drink Company can bring innovation in its business process, introduce new
product, and increase its market share. Essence Drink Company should make strategies and build
innovative ideas to develop and introduce a healthy drink in market. Therefore,, company should
focus on developing a healthy drink with different flavours that diversifies the taste of customers.
Company should also focus on choosing innovative techniques for marketing of its new
products, it can make it reach to the customer's doors or use digital technology for transactions
and fast supply of products. Because digital technology allows a customer to order online and
can get delivery at home which attracts them (Hameed, von Staden and Kwon, 2018).
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Essence Drink Company may also select variety of advertisement to promotes its product
in market. Advertisement is the best tool for promotions from which consumers get aware about
product and gets attracted towards it. Therefore, Essence drink can select direct marketing, or
print media, or even internet for promoting its product.
For developing and introducing a new product in market, company should first make the
estimate budget plan for entire business.
Estimated expenses for new product:
Type of expenses Cost (amount in Euros-€)
Raw material expense 500
Production expense 600
Labour expenses 480
Technological advancement expenses 510
Marketing expense 250
Total 2340
Estimated revenue through new product:
Name of products
(amount in Euros-€)
Price of product Quantity of product Revenue generated
from sale of product
Soft drinks &
beverages
5 320 1600
Bakery products 3 150 450
Ice-Creams 4 200 800
Total 2850
Estimated revenue – estimated expense= estimated profits
i.e. 2850-2340= 510
Therefore, estimated total profit of company is able to manage the technological advancement
and innovative business process for developing and introducing new products.
Funding
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there are various options available for company to access funds: internal and external
Internal sources are such options in which entity use already available funds. Personal
saving of owner, retained earnings are two major sources that can be used by business. Owner
can use own capital for developing this new product and to market it.
External sources are such options in which organisation gets funds from outside sources
such as bank loan, Investors etc. Essence drink can access funds from Banks ,it can take loan for
developing this new health drink and to market it properly.
P7 Different tools that organisation can use to develop, retain and protect knowledge and
intellectual property
Essence Drink is required to protect its intellectual property by using various tools and
techniques.
 Patent: It is generally right of inventor to use particular product. It is useful invention in
order to protect the patent individual is required to apply for patent protection so that no
third person can use this intellectual property (What is Intellectual Property, 2018). If
someone use it then person will be liable for the punishment.
 Trademark: It is another kind of intellectual property that makes the firm different from
other companies. It includes logo, brand image of the firm. In order to protect the trade
mark Essence Drink will have to attain for tagline.
 Copy right: It is generally taken for some creative works or artistic designs.
Essence Drink needs to protect these intellectual properties by taking support of data
protection policy. It has to ensure that these properties are being used under legal guidance and
fairly. Furthermore, firm has to ensure that it design appropriate preservation period for its
essential data. Staff should get training to protect these properties and have to follow clear
guidance so that these things can be protected (Chesbrough, Vanhaverbeke and West, 2014).
CONCLUSION
From the above study it can be concluded that innovation and commercialisation are
essential part of business, that helps firms in expanding their operations and generating high
returns over their investments. Introducing new product is difficult task because companies are
required to gather necessary information about needs and preference of customers so that it can
bring product innovation carefully that can meet with their requirements. It has to apply product
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development procedure properly this may help in creating positive brand image an gaining
attention of mass audience.
RECOMMENDATION
 Essence drink should implement test marketing before launching the new product in
market. It has to first launch the product for certain [period so that actual sales ration can
be identified, this will help in minimising chances of failure.
 Entity should monitor the product development process closely and have to market its
properly. This will help in increasing awareness and making people positive towards
brand.
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