University Report: Innovation Within a Small Business Context Analysis

This report delves into the critical role of innovation within the context of small businesses, examining various facets such as the significance of innovation and invention, the importance of vision, teamwork, and leadership, and the application of the 4Ps of innovation alongside the innovation funnel. It further explores frugal innovation, the commercial funnel, and New Product Development (NPD), supported by a business case study. The report also addresses the need for intellectual property protection. The analysis uses the example of Chilly to demonstrate practical application of these concepts. The report provides a comprehensive overview of innovation strategies and their impact on business growth, providing insights into how small businesses can foster a culture of creativity and achieve a competitive advantage. It covers topics such as growth, talent acquisition, credibility, and skill enhancement. This report is designed to provide a holistic understanding of innovation strategies, tools and their implications for small businesses. It also highlights the various sources of innovation and strategies organizations can adopt to foster a culture of innovation and creativity.

INNOVATION WITHIN A
SMALL BUSINESS
CONTEXT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................3
LO 1.................................................................................................................................................3
P1 Importance of innovation and invention.................................................................................3
P2 Role of vision, teamwork and leadership in innovation.........................................................5
LO 2.................................................................................................................................................6
P3 4Ps of innovation along with use of innovation funnel..........................................................6
P4 Use of Frugal innovation in organizational context...............................................................7
LO 3.................................................................................................................................................8
P5 Importance of commercial funnel and NPD in organization..................................................8
P6 Business case study...............................................................................................................10
LO 4...............................................................................................................................................11
P7 Tools to protect knowledge..................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Innovation is predominately introducing something new in a product, service or anything
that creates value for the customers. Innovation in business is one of the most important tool
through which the companies can improve their overall performance and their their revenue.
Chilly is one of the renowned company which was being established by James Butterfield as
well as Tim Bouscarle in 2010 and aims at providing reusable and sustainable plastic bottles to
their customers.
This report addresses importance of innovation and invention, Role of vision, teamwork
and leadership in innovation, 4Ps of innovation along with use of innovation funnel, Use of
Frugal innovation in organizational context, importance of commercial funnel and NPD in
organization, Business case and tools to protect the intellectual property.
MAIN BODY
LO 1
P1 Importance of innovation and invention
Innovation is basically the procedure in which the idea or the invention is being translated
to a specific product or the service which have same value in the eyes of consumers. Thus,
innovation is the basic way through which the organization place their products in the
marketplace and hence achieve competitive advantage (Prajogo, 2016). On the other hand,
invention is predominately the methodology which involves the engineering and the
development of the new product. Both innovation and invention are somewhat related to each
other and hence are the most vital tools for the organization. Although similar, innovation has
major importance which dominates the invention.
Importance of innovation
Growth contributor
The most significant importance of the innovation to organization in comparison to
invention is that it serve as the most remarkable contributor in the growth and development of
the company. The organizations which are continuously involve in the process of innovation
provide new as well as different services to their customers due to which their market share
increases. Thus, the rapid innovation makes a significant contribution to the growth of every
organization whether small or large companies.

Attracting the great talent
Now a days, each and every individual is technology driven and wants to work for the
organization which is engaged in the continuous innovation and improvement. Thus, they look
for the company that can provide the with the best opportunities to present their ideas. Here
innovation plays a great role where the organizations which have their first priority to innovate
attracts the best talent form all over the world.
Importance of invention
Improves credibility
Invention is one of the most important tool that with the help of science as well as
existing theories increases the credibility of the employees in organization and hence
organization as whole. This increased credibility eventually helps to serve the customers better
and fulfil their needs and demands which in the end increases the profitability of the
organization.
Enhances the skills
Through the rapid and continuous invention, skills of the organization staff increases as
they gather all the possible information that will go in inventing the new product. This gathering
of the new information ultimately shapes their skills and knowledge and make them more
competent to serve the marketplace.
Serve as building block
Invention in every organization whether it is big or small serve as their building blocks
which helps them in capturing the greater market share and increase their overall revenue. It
holds the organization in the right direction and helps them in creating the history.
Sources of innovation
There are mainly two sources of innovation namely
The unexpected
Innovation mainly occurs unexpectedly and thus by chance. Human beings remain
unaware of the innovation and takes place instantly. Similar situation occurs in organization
where the managers and management constantly exploit the market and thus came out with the
need for innovation (Visnjic, Wiengarten and Neely, 2016). This innovation could be in their
structure, composition, product or service. Thus the various market opportunities encourages the
company to have creativity in each and every aspect.

Market structure
This is the another source of innovation which compels the organization to make changes
in their system. The current market structure generally stimulates innovation. Bringing
something new in the existing structure of market is the actual innovation. Thus, organizations
constant strive to study the market inconsistencies and structure which helps them to generate
new seeds of innovation.
Organization tactic to foster culture
Organization can adopt various strategies and ways in order to inculcate a culture of
innovation and creativity.
Collaboration
Same minds usually do not results in phenomenal changes. Companies can thus create
the demanding work and build the effective collaboration among their team members to promote
innovation at each and every level. By introducing the different collaboration tools, organization
can bring their people together and thus can build the workplace for various experimentation and
innovation.
Rewarding innovation
Bringing the people together for participating in innovation is not enough rewarding their
ideas is equally important. Organization can incorporate their effort to reward their employees
for offering innovative suggestions and thus can provide them benefits which will eventually
motivate them to promote innovation.
P2 Role of vision, teamwork and leadership in innovation
The Vision of Chilly is to provide clean and contamination free water to each and every
person on the earth ans thus serve the world with reusable products and safer water. By having
the clear visions, management of the company remains aware of the various strategies to be used
along with the types of people top hire for achieving this vision. Thus through proper vision,
Chilly are able to hire the correct technical skills that will adapt to the working environment and
hence will inspire innovation and commercialization in company (Souto, 2015). Besides this, the
leadership style used by the organization also foster innovation and commercialization in Chilly.
Having the right type of leadership style, leader would be able to make new plans and strategies
and thus would communicate with their followers more effectively. This helps the employees to
make their participation in the innovation and present their ideas and suggestions. Along with

this, culture also plays an important role in boosting innovation as well as commercialization in
Chilly. When the organization have the culture of continuous growth and new opportunities,
each and every employee likes to take new challenges and thus contribute towards product
innovation. Besides this, Teamwork is the main element in Chilly which helps in continuous
innovation and commercialization. Chilly has the most growing environment where each and
every team is focused towards serving their customers and thus works together in each and every
aspect. Therefore, this strong teamwork ultimately motivates the employees for innovation.
LO 2
P3 4Ps of innovation along with use of innovation funnel
Just like the 4ps of marketing mix, there are 4ps of innovation
Product
This mainly includes introducing a new product in the market place or bringing some
innovation in the existing ones. Innovation in product is basically means improving its
packaging, deliver services, features, characteristics etc and making it more stylish and
convenient.
Process
Process innovation is basically the various activities which Chilly can use to improve
their processes ranging form production process to delivery process. Making the process more
efficient, cheaper and quicker is considered as innovation over the existing process.
Position
This addresses positioning itself in the market place and in the eyes of consumers. It deals
with how the organizations is position among consumers and competitors thus innovation in
position means having a unique USP that will differentiate them form competitors and thus will
attract the customers (Piperopoulos, 2016). Chilly through its unique innovation can position
themselves differently among the consumers and in the marketplace.
Paradigm
It basically shows the degree and the way of changes which the organization has adopted.
Bringing changes in the organization through innovation is what comes under this. Like Chilly
shifted its focus to reusable bottles and thus changes its paradigm through bringing innovation in
their operations.

Innovation funnel
Innovation funnel is basically the mechanism which enables the continuous stream of
great ides and suggestions and which are later on screened for the viability. This is one of the
most well known approach which is being used by the organizations in order to develop the
innovative plan. The core feature of this funnel is to build as many ideas as possible. Later on the
large proportion of this funnel is refined and the converted into the development plans. The first
stage of this organization funnel emphasise on the funnel's wide mouth in which organization
generally enhances the knowledge and skills. The main aim here is to generate many ideas. The
more ideas company encounters, more number of products a company can develop. In this stage,
Chilly can gather wide range of information from their competitors, suppliers, customers which
will help them to bring innovation in their product.
Next stage involves narrow portion of the funnel in which the ideas generated in the first
stage goes through well defined screening. Here the ideas are matched with the goals which the
company has created (Jajja and et.al.,2017). In this stage, Chilly generally carries out the
assessment of the ideas in order to analyse the amount of risk in each and every idea. Based on
this, the company decides which idea yo select.
Last stage comprises of ensuring that the ideas which are being selected fulfils the
objectives of the company and their goals. In this stage, the new product is ready to release in the
market. Chilly after assessing the ideas takes the product through the final test and ensure that it
is meeting all the requirements of company's vision. Company then releases the product.
P4 Use of Frugal innovation in organizational context
Frugal innovation is basically the innovation type whereby the various technological
products ans services are customized at very low prices as well as high volumes for the emerging
market. In short, it is the method to reduce complexity as well as the cost of various goods.
Frugal innovation is highly essential for the organization for their sustainable growth and
development. The frugal products basically cuts down the cost of organization and thus provide
customers with a creative product.
For example Samsung took the advantage of frugal innovation and thus released low cost
mobile phones in the market. In 2016, Samsung released its J7 through the use of frugal
innovation which was considered as the cheapest phone equipped with various features like
premium design . This low cost mobile produce through frugal innovation created a buzz in the

market and thus eventually raised their sale in the same year. Similarly, Apple released the
cheapest airpods in 2018 which was the result of frugal innovation. This airpod was basically
produced at low cost and was target to a wide range of people even the middle class people. Due
to its low cost, the sale of airpods raised from 4% to 9% as it was affordable and has distinct
features which their other products doesn't have like fast connect times (Ortiz-Villajos and
Sotoca, 2018).
In the same way, Chilly can use this frugal innovation to provide the customers with creative
product along with low cost. This will eventually help them to reducing their administrative
expenses and hence can utilize this to attract large markets.
Role of frugal innovation
Frugal innovation plays a vital role in helping the organization to achieve their goals and
objective and attract large number of customers at much low cost. This is the basic tool which
the organizations uses for their sustainable development. The major role which this frugal
innovation plays in organization are
Cost effective
Frugal innovation plays the role of cost leader and hence enable Chilly to produce
innovative product at much lower cost. Chilly incurs a huge amount of money while producing
the product like production cost and other overhead cost (Kerr, 2016). Thus their major challenge
remains using the innovation for driving down the cost to a level which is economically
advantageous. Here, frugal innovation plays the great role where Chilly can use various models
that boosts the frugal innovation and thus will cut down their cost.
Competitive advantage
Frugal innovation is mainly focused towards making the company a market leader and
hence plays the role of providing competitive advantage to the. Frugal innovation act as the
driver for the company and hence stimulates their growth (Phaal, Farrukh and Probert, 2015).
Through this type of innovation, Chilly can produce a distinct product which will be affordable
enough to attract the customers as well as provide them with unique features and characteristics.
LO 3
P5 Importance of commercial funnel and NPD in organization
Commercial funnel commonly known as sales funnel is basically the buying process
which the companies uses for their customers while they are purchasing the product. In short, it

is primarily the procedure through which the organizations searches for the potential customers
and sell the products to the. The importance of this sales funnel are
Marketing strategy
Commercial funnel helps the organization to understand the marketing tools and hence
pick the most advantageous marketing strategy. By analysing the different market and different
buying process of the customers, organizations are able to evaluate their marketing strategy and
thus alter their strategy according to the changing needs and demands of the consumer. Like
many marketers prefer to to emphasize on the consumers who are within the decision department
of this sales funnel which makes it convenient for them to drive the customers and hence adopt
the required marketing strategy.
Enhance sales
Commercial funnel helps the organization to increase their sales by modifying the
searching process. In this types of funnel, marketers generally focuses on inters searching and
attracting the prospective customers due to which they have the pool of required consumers
(Martinez and et.al.,2017). This extensive searching helps to bring the right type of customers
and when correct customers will be present then eventually the company would be able to
market their products more effectively. This in turn will increases the sales of the company and
will boost up their revenue and profitability ratio. The principle of commercial funnel stresses
upon pulling the desired customers in the funnel and making the sales to go higher.
Relating to the customers
The ways in which the company describe their products, services, and produces content
have a deep impact on the consumers as well as on the clients and thus affect the sales.
Commercial funnel helps to better relate their products with the type of customers. Once the
company is able to locate the section of funnel of potent customers, they can change the content
and tone of their way in which they deliver their products (Saebi and Foss, 2015). Besides this,
as the commercial funnel involve searching for the potent candidates, marketers will be able to
come to know that which type of customers relate to which type of products and thus would be
able to target their marketing efforts on that particular segment.
Provides competitive advantage
This commercial funnel give the companies an edge over their competitors and helps
them in achieving competitive advantage. Through the better understanding of the market,

organizations are able to design their products and bring innovation in them which eventually
leads to their greater sales. This in turn differentiate them for the other competitors and thus help
them to survive in this cut throat competition. The commercial funnel provides the organization
with a large pool of prospective customers from which they are able to segment their target
customers. This effective targeting eventually fulfils the need of customers and thus assist the
company to stay ahead of their competitors.
Application of New product development
There are various applications of the development of new product which are:
Enhances value for the customers
Development of the new products create a different value for the consumers and hence
provide them with the new product which is beneficial for them in each and every aspect. This
increasing value enhances the company's performance ans hence helps them in their growth.
Improved society
The new products produced by the company are the modification over the existing
product and hence improves the society by going beyond their expectations (Laužikas and
Dailydaitė, 2015). The new feature contained within the product eventually increases the value
for the society and overcome their problems.
P6 Business case study
Executive summary
Chilly is highly focussed towards providing the people with reusable plastic bottles and
contamination free water (Mont, Whalen and Nussholz, 2019). They emphasize on designing the
stylish products which is the combination of high performance as well as the eco friendly
technology. The result of their innovative strategy is the Chilly' s bottle.
Background of company
Chilly was basically founded by James Butterfield as well as Tim Bouscarle in 2010 and
is one ODF the renowned company which provides reusable plastic bottles to the customers.
Mission
To accelerate and promote the adoption as well as utilization of the reusable products and
creating the innovative products for urban lifestyle.

Vision
To provide clean and contamination free water to each and every person on the earth ans
thus serve the world with reusable products and safer water.
Need of the innovation
People now a days want sustainable products along with contamination free water thus
this innovation will provide the customers with reusable and sustainable plastic bottles along
with clean water.
Opportunity
The growing awareness of the consumers for the products that does not releases harmful
contaminant within the content as well as reducing the pollution is the main opportunity for this
product.
How the product will meet the need
This reusable and sustainable plastic bottles are made up of the materiel that does not
releases any harmful pollutant in the content inside it and thus keeps the content fresh. Besides
this, it can be easily degraded and will not produce contagious gases.
Competitive edge of product
This product is a perfect mix high advanced technology and eco friendly materials which
reflects the active lifestyle of the urban areas and thus is pocket friendly. Besides this, the
flexibility of its material makes it different from others as can be used in different forms.
Market opportunity
The product will cover the entire market area of UK and thus around 1650000 units of the
products would be sold in the market. The product will mainly target the market of laggards and
would be an attractive approach as they are the one who tries the innovative product.
Target consumers
The major target consumers would be youngsters and the middle age group people.
Within these, sub segment which would be targeted will be the laggards (Yang and et.al.,2017).
They will be approached through the use of social media platform like through E mails, websites
etc.

Strategy
The company will use social media strategy for marketing the product and hence will
advertise it on the online platform. Through the use of optimized website and E mail marketing,
the company will reach the target customers and hence will promote the product.
Financial plan
The fund for the development of new product will come form various financial
institutions and government. Besides this, The company will borrow the fund from bank by
taking loan. The initial start and running cost would be around 2000£.
LO 4
P7 Tools to protect knowledge
It becomes important for each and every organization to develop a credible source of
information and at the end protect that information. Besides the information, security of the
intellectual property also becomes essential for the organization. Intellectual property is basically
the development of symbols, inventions and images that have the commercial value. Basically
intellectual property are used for the protection of some formula or procedure but on the other
hand it also secures the credible data and information of the organization. Thus there are various
tools which have been developed for the protection of information and intellectual property.
Patent
Patent predominately grants the organization with the right to protect their invention or
the methodology. The application of patent generally restricts the other organization to sell or
develop any kind of the substitute product or service. Thus, It reserves the right to the
organization and hence protect their property and knowledge. This patent can be used by Chilly
to protect their innovation and thus their competitors or any other person cannot sell the similar
product. For example Chilly can have the patent of their methodology which they have used for
producing reusable plastics bottles so that their competitors cannot use the similar machine or
methodology for producing the similar product.
Trademark
Trademark is generally a sign or a symbol which represents a business. This is the way
through which the company distinguishes itself from others (Linder and Williander, 2017). This
generally restricts an individual or the business organization to use the similar logo, mark or sign
on their products or as a representation of their company. This plays great role in the business

and hence protects their intellectual property. Being an intangible asset, it is worthwhile for the
organization to select the unique trademark which differentiate the and their products. Chilly can
have the trademark of their company as well as their products. Like they are producing the
reusable water bottles that will incorporate their company logo and thus would be accessible to
everyone. Therefore having the trademark would eventually help them in securing their property
and no one can copy their logo.
Copyright
Copyright is basically the intellectual property which provide the legal right to the owner
to reproduce their work but only for a given period of time. Copyright generally secures the
original material creator from any unauthorized use as well as duplication and thus forms the
most intangible asset of the organization which cannot be priced (Santos and et.al.,2018). Chilly
can use copyright to protect their products from duplication and thus will protect it from
unauthorized selling. Chilly can incorporate the copyright sign which is C on their products to
protect their unauthorized use.
CONCLUSION
It has been summarized that innovation as well as invention are crucial mode for the
organization which helps them to achieve competitive advantage and thus create great customer
base. Organization vision, leadership and teamwork helps the organization to achieve the
innovation in most effective manager and thus leads to effective commercialization. Apart from
this, there are 4 Ps of innovation namely product, process paradigm and position which in their
own way assist the organisation in proceeding through the innovation. Among many types of
innovation, frugal innovation aims at developing the innovative product at much lower cost and
thus offering the services at reasonable price to attract customers. Apart from this, there are
various tools which helps the organization to protect their intellectual property and knowledge
like trademark, copyright. They at the end secures the rights of the company.

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