Innovative Strategies for Enhancing Brand Loyalty at House of Fraser

The case study delves into the innovative idea of launching a bank under the House of Fraser brand. By offering financial products such as credit cards, personal loans, travel money, and reward points, the company aims to attract both existing and new customers while enhancing their loyalty through an integrated service model. This strategic move seeks to provide competitive advantages by leveraging its premium customer base, which could potentially allow it to surpass competitors like Marks & Spencer and Sainsbury’s in terms of market share. Despite promising benefits, significant challenges such as the need for substantial investment from stakeholders and ensuring robust security measures must be addressed to mitigate risks associated with offering financial services.

Running head: INNOVATION OF BUSINESS
INNOVATION OF BUSINESS
Name of the Student
Name of the University
Author Note

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Executive Summary
This report is based on the analysis of business innovation and generation of new ideas. The
discussion is further related to the ways by which new ideas can help the business to gain
competitive advantage in the market.
The analysis is done based on the various theories suggested by different authors and the
relation of these theories with the business innovation ideas and gaining competitive
advantage in the process. The companies that are taken into consideration for this analysis are
Sainsbury’s, Netflix, lastminute.com, House of Frasers and Expedia.
The problem found in the research was related to the House of Frasers group, which does not
have banking facilities. The action plan that was implemented states the importance of
introducing banking facilities by the House of Frasers group and the impacts of the action.

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Table of Contents
Introduction....................................................................................................................3
Literature review............................................................................................................3
Methodology..................................................................................................................4
Application to the generation of idea and development.................................................6
Outcomes and evaluation...............................................................................................6
Conclusion and the action plan......................................................................................7
Bibliography...................................................................................................................8

3INNOVATION OF BUSINESS
Introduction
Business innovation is the process by which an organization aims to formulate new
ideas, methodologies and workflows or even new products or services. The process of
business innovation is mainly used to improve the existing services or products of the
company so that the company can attract new customers. Business innovation is important for
any organization, so that they can increase the value of the organization and create new
opportunities to increase revenue. The process of business innovation helps the company in
gaining competitive advantage (Boons et al. 2013). This process helps the organization to
fulfil its strategic objectives. The main purpose of this report is to apply the process of
business innovation and further generate ideas for a new business or a product to increase the
value of the organization. The process of the idea generation and the research methodology
followed for generating the idea is also discussed in detail (Lacity and Willcocks 2013). The
application of the newly generated idea in the business is discussed in the report analysis.
Literature review
The research about the role of idea generation in the innovation of a business has been
discussed by many authors around the world. As discussed by Schneider and Spieth (2013),
business processes are mainly based on the power of the ideas that are generated. The
opportunities that are created with the help of new ideas further help in increasing the
profitability and the customer base of the organization. The process of idea generation
includes three steps, which are, innovation, development and actualization. The business
processes involve both creativity and innovation as argued by El Bassiti and Ajhoun (2013),
and they are closely linked with each other. According to them, there are various techniques
of generating ideas which include, brainstorming, scamper, that is, Substitute Combine Adapt
Modify Put to another use Eliminate Reverse, mind-mapping, synectics, role playing,
storyboarding, attribute listing, morphological analysis, visual prompts and visualization,

4INNOVATION OF BUSINESS
daydreaming, forced relationships, questioning assumptions, reverse thinking, brainwriting,
accidental genius, collaboration, socializing and wishing. These are the various techniques as
discussed by the authors which can be used for idea generation. According to Urbancova
(2013), business organizations need to gain competitive advantage over their rivals so that
they can prove to be more profitable. The edge that is developed by the organizations over
the others in the market helps them in surviving in this competitive environment. The most
important according to the author, for this gaining this advantage is innovation. The
innovative thinking related to the business mainly refers to the process of seeing the things
from new and broad perspectives. The business needs to be flexible and ready to take risks as
well. As argued by Hinterhuber and Liozu (2014), innovation is related to the ability of the
company to develop new services and products and further commercialize them and apply
these concepts in real life situations. The competition in the market is becoming tougher day
by day and a business needs many innovative ideas to compete in the business environment.
The environment of the organization needs to be made suitable for innovation and innovative
techniques. According to the authors innovation is not only required for the new services and
the products, it is also required in the pricing strategy of the particular products.
Methodology
The research process is important to take any type of decisions related to innovation
or new ideas in the business (Snyder 2012).The research was conducted on the sample size of
100 people. Primary data was collected from the respondents with the help of surveys and
questionnaires. This data was analysed based on statistical analysis. Further, the data was
validated with the help of correlation and regression analysis. The five companies that were
taken into consideration for this research are, Sainsbury’s, Marks & Spencer, Netflix,
Expedia, House of Fraser and lastminute.com. Sainsbury’s is a large retail company in the
UK and they are one of the most trusted retailers among the other companies. The offerings

5INNOVATION OF BUSINESS
of the company include, groceries, household and furniture items, apparels and many more.
They also offer bank related facilities like loans and credit cards. Marks and Spencer is also a
British retailer company established in the year 1884. This company offers products related to
men and women’s fashion, food products, kids’ products and furniture for homes. Netflix
provides services related to video streaming which states that the person can continue
watching his favourite movies and TV shows if he has an internet connection. This service
requires a monthly subscription and the viewers can even watch a whole new series together
in the Netflix app. Expedia is a travel related website which helps the consumers to make his
travel plans and make his bookings accordingly. The company was founded in the year 1998
and it is one world’s greatest travel company. The next company that is taken into
consideration is House of Fraser, which is a group of departmental stores of British origin
operating in 60 locations in the United Kingdom. The company was founded in the year 1849
by Fraser and Arthur. The company mainly offers all types of party wear products for men
and women. The last company in the research is lastminute.com, which is a travel booking
website that provides a secure and simple method to book the flights and hotels. This website
provides booking for boutique and premium hotels as well. The respondents were asked
about their experience with the companies and their products. The research has proved in this
case that the respondents are not happy with offerings of House of Fraser. The reason behind
the result was that the website does not offer any type of banking and credit card facilities as
compared to Sainsbury’s and Marks & Spencer. These two retailers provide banking and
credit card related facilities to the customers. This idea helps them to retain the customers and
gain brand loyalty. The companies gain brand loyalty in the process because the customers
can avail many facilities when they shop using the credit cards provided by these companies.
Gift vouchers, discount coupons and reward points are the key ways by which these
companies attract customers.

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Application to the generation of idea and development
This can also be implemented by the House of Fraser group. The House of Fraser
group is a premium level retailer and they sell premium products. The customer base of this
of a different class. The company can implement the idea of House of Fraser bank. This bank
can provide the customers with facilities like credit cards and current accounts. The credit
card facilities include the offers given by the company to the customers, the reward points
offered to the customers, personal loans can be offered to the customers, the facility of
collecting travel money from the House of Fraser stores around the city can also be
implemented. In this manner, the customer can enjoy a host of facilities under one roof and
the brand loyalty of the customer will increase with the help of this approach (Müller and
Thoring 2012).
Outcomes and evaluation
The idea that was to be implemented to increase the sales and the brand loyalty for the
House of Frasers group is to start the House of Frasers bank. The House of Frasers bank will
provide lots of facilities to the customers who are already a part of the group. They will also
provide the facilities for new customers and those who wish to be a part of the group. The
features of the bank include credit cards, personal loans on low rates, travel money, reward
points and many more. These facilities have helped in attracting many customers towards the
group. However, this process requires huge investment from the stakeholders of the
company. The reason is the investment required for providing personal loans to the customers
and the credit cards. The discount schemes and the reward points given to the customers can
cause loss to the company. The stakeholders of the implementation of this idea are the
management of the company and the customers, who will keep their money in the bank. The
security that is required for this whole process is also a serious issue in this case.

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Conclusion and the action plan
The idea related to the innovation of the business of House of Fraser group has proved
to be profitable for the company. The implications of this idea has thus proved to be
innovative for the business. The company will be able to gain its competitive advantage over
the rivals and further try to beat the competitors in the same area which are Marks & Spencer
and Sainsbury’s. The company will gain an edge over these companies with the help of their
premium customer base, who will become loyal towards the brand. The report can be
concluded with learning that an innovative idea can help in increasing the profits of the
company and further gain competitive advantage over the other companies in the same field.
The business environment is becoming more and more competitive in the recent times, which
is forcing the companies to make drastic changes in the business processes and becoming
more innovative. This innovative feature of a company will help them to increase their
customer base and further increase the business opportunities.

8INNOVATION OF BUSINESS
Bibliography
Boons, F., Montalvo, C., Quist, J. and Wagner, M., 2013. Sustainable innovation, business
models and economic performance: an overview. Journal of Cleaner Production, 45, pp.1-8.
El Bassiti, L. and Ajhoun, R., 2013. Toward an innovation management framework: A life-
cycle model with an idea management focus. International Journal of Innovation,
Management and Technology, 4(6), p.551.
Hinterhuber, A. and Liozu, S.M., 2014. Is innovation in pricing your next source of
competitive advantage? Business Horizons, 57(3), pp.413-423.
Lacity, M.C. and Willcocks, L.P., 2013. Outsourcing business processes for innovation. MIT
Sloan management review, 54(3), p.63.
Müller, R.M. and Thoring, K., 2012. Design thinking vs. lean startup: A comparison of two
user-driven innovation strategies. Leading Through Design, 151.
Schneider, S. and Spieth, P., 2013. Business model innovation: Towards an integrated future
research agenda. International Journal of Innovation Management, 17(01), p.1340001.
Snyder, C., 2012. A case study of a case study: Analysis of a robust qualitative research
methodology. The Qualitative Report, 17(13), p.1.
Urbancova, H., 2013. Competitive advantage achievement through innovation and
knowledge. Journal of Competitiveness, 5(1).