Analysing Innovation and Commercialisation in Online Grocery Business

This report provides an analysis of innovation and commercialisation strategies employed by two online grocery retailers, Fresh Direct and Schwan's Company. It examines how these organisations source and foster innovation, detailing the types and processes of innovation used, such as disruptive and sustaining innovation. The report critically analyses the success or failure of innovation in each company, recommending innovative products or processes for a new online grocery retailer, supported by the benefits and risks of innovation. Suggestions for funding channels and tools to protect knowledge and intellectual property are also provided, along with an explicit action plan for innovation. The analysis covers aspects like leadership, culture, team building, customer problem ownership, and rewarding failure, highlighting the importance of demographic shifts and changing perceptions in driving innovation within the online grocery retail sector. This document is available on Desklib, a platform offering a wide range of study tools and resources for students.

Innovation and
Commercialisation

Table of Contents
INTRODUCTION...........................................................................................................................3
Part-1................................................................................................................................................4
Analysis and discussion on how innovation is sourced and fostered by two chosen retail
organisations...............................................................................................................................4
Types and processes of innovation in each of the chosen organisations....................................5
Critically analyse the success or failure of the innovation in each online grocery retailers.......8
Part-2................................................................................................................................................9
Recommended innovative products or processes for a new online grocery retailer, supported
by benefits and risks of innovation.............................................................................................9
Suggestions of funding channels...............................................................................................10
Recommend tools to protect or retain the knowledge and intellectual property.......................12
Explicit action plan for the innovation......................................................................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................17
Books and Journals:..................................................................................................................17
Online:.......................................................................................................................................18

INTRODUCTION
Innovation is one of the most imperative topics concerning the long term competitive
benefits of organisations. Innovation simply means to improve or replace something. It can be
anything such as a product, a service or any process. It also refers as the creation of value that
increases the value of an existing product, service or process. Companies have diverse options to
boost their competitiveness, they can develop a strategy for differentiation or they can either
strive for price leadership (Zhou and Wang, 2020). In both options, innovation is very important.
Continuous innovation is very crucial for all kinds of organisations. They key difference is in the
concentration of the innovation strategy which differs from business to business. Therefore,
innovation is one of the significant key drivers for the long term success of organisations.
Accordingly, methods of teamwork and collaboration are progressively being exploited in
various organisation, for instances, to promote digital innovation or to combat the challenges of
digital modifications. It involves the high degree of creativity and more willingness to take risk
factors than the implementation of new ideas in the typical new projects. On the other side,
commercialisation is a term refers to the process of bringing new goods or services to the target
market. The vast act of commercialisation involves production, dispersion, sales, marketing,
customer support and many other main functions critical to attaining the commercial success of a
new good or service (Cronin, 2019). Typically, commercialisation happens when a small
organisation has progressed and scaled its operations while attaining levels that let it to
successfully reach a massive place of market.
The two online grocery retailers that are selected to prepare this report are Fresh Direct
and Schwan's Company. Fresh Direct is a United States based online retail organisation which is
established in New York City. It has world-wide operations, involving countries such as
Washington, Connecticut, Delaware and much more. Its custom packages as well as meals for its
customers exploiting just-in-time manufacturing, enhances the quality and freshness while a
practice that limits the waste (Temel and et.al., 2021). Its offers its goods and services via mobile
app and website. Whereas, Schwan's Company is an American online grocery retail organisation
which expresses the legacy of home delivery services. It is introduced in the year 1952. It sells
frozen food items from home delivery trucks, in grocery store freezers with the help of mail to
the food service sector.

Part-1
Analysis and discussion on how innovation is sourced and fostered by two chosen retail
organisations.
In the context of Fresh Direct, this online retailer uses the following ways to source or
foster the innovation in their business:
 Lead from the front: Innovation begins with the leadership traits of the CEO or founder.
These people of innovative companies have to be passionate about their work while
representing an optimistic and positive outlook, have a clear and real drive vision, be
forward thinking and most of all clasp the change (Gong and Peng, 2018). In Fresh Direct
Company, leaders are audacious thinkers and possesses a prime role in encouraging the
modern enterprise. Hence, innovation is the mantra of their high performance.
 Create a culture of innovation: People do best when they are impelled by inspiration
and pleased to force their levels to think beyond the limits. There is a need that
employees feel independent enough to build their own innovative ideas and to pursue the
ideas they are passionate about. For the Fresh Direct, they encourage people to think
creative and innovative. Brainstorming sessions helps in gaining the creative and most
innovative ideas for the growth and development of business.
 Build effective teams: The super active group has become the holy grail of the world of
business. Many important requisites need to be in place. Some of these cover
dependability between team members, lucidity of goals and trenchant structure, signify
that team work does, as well believing in the long run outcomes of the efforts of the
group (Chen, Liu and Zhu, 2018).
On the other side, Schwan's Company is another online retailing organisation that also
aims to foster and source the innovation in their business (Abdurakhmanova and Rustamov,
2020). They exploits following ways to source innovation in their business:
 Take ownership of client problems: Schwan's Company is the customer-oriented
company which aims to focus on delivering best services to their customers or clients.
They tend to encourage their employees to take ownership of issues raised by their
clients. The respective organisation believes that every customer complaint or issue
displays the organization with an extraordinary opportunity to demonstrate real customer
service and outline big enhancements in good or service design as well as delivery.

 Reward failure: One of the most wonderful source for advancing employee creativity,
along with innovation is recognition. Individuals have desire to be identified and
rewarded for their opinions and initiatives and it is an exercise that can have marvellous
payoff for the company. One of the key reasons that employees often do not show their
perspectives in front of their seniors is that they do not have desire to rock the boat (Del
Bosco, Chierici and Mazzucchelli, 2019). They do not want to be a failure if something
goes wrong or does not work out. Hence, Schwan's Company fosters innovative work
culture by embracing the mistakes of their employees, also inspire them with reward
lessons learned as ideas do not always work for the introductory time.
Sources of innovation:
 Demographics: As the population, human resources, age ranges and pay levels alters on
insistent basis, most of the bigger enterprises paying attention on this. Unifying
demographic data with division and concentrating on it is a brilliant tactic for precisely
accomplishing the needs of possible market (Dana and et.al., 2021).
 Changing the perception: Dynamic opinions concerning things can alike bring forth
innovation. People always change their perception on taking things or how they feel
about the things, companies needs to analyse such modification in the customers mindset
to bring out the innovation in their actual servings.
Types and processes of innovation in each of the chosen organisations.
Types of innovation:
 Disruptive innovation: It is one of the most well-known type of innovation. It comes
with the effective utilization of advanced technology and high impact outcomes (Fisher
and Qualls, 2018). The most common companies showing the features of disruptive
innovation are start-ups targeting unnoticed portion in the marketplace to provide an
contribution that is more convenient, low-priced and simpler than the established players
can.
 Incremental innovation: This involves a gradual and ceaseless enhancement of current
goods and services. By continuing enhancement in the current goods, services and
business operations, company can restrict the stagnation while systematically evolve
shares of market.

 Sustaining innovation: It refers as the best way to safeguard the business position in the
market. It concentrates on small enhancements to current goods and services to add value
of satisfying customers (Lee, Kim and Choi, 2019). It helps in upholding the market-
leader position while focusing on delivering major changes. This form of innovation
mainly pays focus on developing new attributes or services that distinguish a product
from all of its challengers. Radical innovation: It exploits a technological breakthrough that alters indusries, along
with develops new markets. This form of innovation wholly changes how a business
interacts with the market. This success is depend on the company's organisational
capabilities and behaviours that evolve the right conditions for new ideas to be
successfully commercialised in the prior place (Innovation – Definition, Innovation Types
and Meaning, 2021).
By analysing all the above forms of innovation, it has been said that Fresh Direct
Company utilises disruptive innovation in their business. They are more focused on the upgraded
technology that assist in catering its products and services to the potential consumers with
genuine prices. Using technology such as AI in their business helps in analysing the current
needs and desires of customers so that they can be able to fulfil their demands accordingly. In
present times, customers do not like to be part of common mass, rather then want personalised
attention and go for the brand that offers personalised experiences to them. Hence, this
innovation in the process will bring success in the forthcoming time.
On the other side, Schwan's Company focuses on sustaining innovation in order to
protect their business position in the target market. This company is more focused on creating
smaller modifications, rather than bigger changes in order to gain the leading position. It aims to
act within uniqueness in their current products and services by evolving additional features,
changes in packaging etc. (Hausman, 2020). The respective organisation is using Blockchain in
their business in order to create transparency among target customers, addressing all their
queries. With the help of Blockchain, this organisation aims to offer many information such as
its origin, present location, environmental conditions and forth.
Innovation process: Innovation means the introduction of new quality of a product or
new product, source of supply, method of production, organisation in the industry and much

more. The most likely thing about the innovation process is being competent to actualise an idea
into a flourishing concept (Lazaretti and et.al., 2019).
Steps of innovation process:
1. Idea generation and mobilization: It all begins with an idea and the best ideas can
generate from any person in the group and at any time. So, ensuring everyone
understands how to seize and store ideas is important (Min, Vonortas, and Kim, 2019). In
the context of Fresh Direct, they require the support of their staff members in order to
engage them in the idea generation process. It will be done by brainstorming sessions so
that they can generate more ideas for the business. On the other side, Schwan' uses
SCAMPER technique for the problem solving as well as creative thinking. This
technique helps in altering the ideas, concepts and processes that already presents. The
key reason using this technique is to make changes to some parts of the present idea or
process to get the ultimate solution.
2. Advocacy and screening: This is the second stage in which the ideas have been
evaluated to know its feasibility. It helps in knowing the potential benefits and
challenges. In this stage, both the organisations must comprehend the difficulties covers
in evaluating truly innovative ideas. Employees can get feedback and advocacy on their
generated ideas.
3. Experimentation: It helps in analysing the sustainability of opinions for both the digital
and retail organisations at a particular range of time period (Fujiwara and Collins, 2019).
A new idea can be generated with the help of collected information on the results, along
with the utility of the original content. For example, both the companies can test their
grocery delivery service in specific area so that it can expand to many new marketplaces.
4. Commercialization: It aims to create a market value for an idea by concentrating on its
impact. It covers the alteration of focus developments to idea. If the proposed ideas of
both organisations has been surpassed then a business plan can be created and it will be
primed for diffusion along with implementation (Khurshid and et.al., 2019).
5. Diffusion and implementation: This is the phase where the innovative idea has been
widely accepted and implementation sets up everything required to make the innovation.
This stage helps both the online retail companies to determine the needs and desires of

consumers. Receiving feedback, success metrics indicators or other benchmarks allow the
organisation to influence the process of innovation.
Critically analyse the success or failure of the innovation in each online grocery retailers.
This has been critically analysed that innovation is something that helps the organisation
to regenerate their present products, services, processes or business model into something new
that creates worth to those present offerings. Innovation is very necessary to make new clients as
well as retaining current customers. It also supports in getting competitive benefits in the
potential market when the organisation give something new, attractive and unique to the
potential marketplace. Undoubtedly, it is enviable that organisation must examine or take the
feasibility test before taking the concept into market (Borrás and Edquist, 2019). An innovative
idea do not always come up with the opportunities or goodness, but it also increases challenges
and risks that is necessary to be analysed. In the context of Fresh Direct Company, it is identified
that this organisation wishes to change or modify its services by taking the advantage of AI
technology in their process. Through AI technology it can keep their eyes on the customers'
actual wants, demands or interests in order to supply the best services along with products. For
instance, in present times, the customers are more desirable to get the goods and services from
the company that caters environment friendly services in order to provide less harm to the natural
enironment. Analysing such interests will help the Fresh Direct Company to limit their waste of
resources to save the environment while delivering goods in the most sustainable manner
(Naqshbandi, and Jasimuddin, 2018). Whereas, Schwan's Company opts the innovative idea of
using Blockchain in the business in order to resolve the customers' queries and problems with
the most appropriate solutions. This idea will support the business company to provide the
information about the current location of the product, environmental conditions, date of dispatch
and much more. Overall, it has been said that both the innovative ideas in the respective
organisations delivers success on a significant note. But, it should keep in mind the challenges
that are involved with it so that the company is able to create opportunities around them (Scarrà
and Piccaluga, 2020).

Part-2
Recommended innovative products or processes for a new online grocery retailer, supported by
benefits and risks of innovation.
Commercial funnel can be used by the company's innovative products, services or
processes. A commercial funnel aims to acts a marketing tool through which organisations
identify, serve and trade their trade to customers. It helps in break down the customer journey
from awareness stage to purchase stage. This refers a chronological process of attracting
consumers to the products as well as trying to convince them to purchase. In context to both the
online retail organisations that are Fresh Direct and Schwan', both companies can exploit the
commercial funnel to increase their business sales (Li and et.al., 2019). It has basically involved
few steps to improve the sales which are mentioned below:
 Attract: This is the very first stage in which Fresh Direct can attract the customers by
knowing their requirements and demands for the particular products and services so that
can be attracted. While, Schwan's Company can attract the customers by resolving their
complaints and problems on time and with suitable options. It is assumed that consumers
do not have any clue of goods and services and the brands are needed to exploit different
techniques to promote their idea. Hence, both the organisations should use cost-effective
methods to attract their customers (Borghi, 2018).
 Convert: This phase aims to transform the strangers into visitors in order to make them
to test and experience the company' services and goods (Secundo and et.al., 2018). It is
sensed that consumers only have certain idea about the organisation and thus, the
business is needed to make suitable tactics so that they can be able uphold their day to
day connection with the companies. Schwan can use phone calls or emails to have a link
with prospect customers. Fresh Direct can make their social media pages to connect with
the desired customers.
 Close: This phase aims to deals with the boost of sales in the business. Fresh Direct can
increase their sales of online services by giving best of their personalised experiences to
their clients, while Schwas can deal with the customer's issues or complaints and resolve
them to give the desirable customer services in the market.
 Delight: In the last stage the organisations get their customers in order to boost their
profits and revenue while delighting them with their products and services.

Innovation risks:
 Enhanced productivity and reduced costs: Most of the innovations intends to limit the
expenditures and additional costs. This might be attained by enhancing the production
size or the business flexibility to enable it to use the economies of scale.
 Better quality: Customers are always delighted by the best quality goods and services so
it is assumed by the companies that there should be more focus on the quality then
quantity in order to increase sales and revenue.
Risks involved in innovation:
 Uncertain commercial returns: It is found that innovation does not necessarily involves
guarantee of upcoming revenues as well as profits (Chandrashekar, and Bala
Subrahmanya, 2019). If there is a long time scale in the development, then there will be
high risk which creates challenges in the innovation process.
 Competition: Innovation confabulate competitive benefits if challengers are unable to
duplicate it in their own business (Ribeiro and Bao, 2021). Whilst, patents offer some
kind of legal protection, the fact is that several innovative goods, services, processes are
difficult to safeguard.
Suggestions of funding channels.
Business growth and progression has traditionally been supported by venture capitalists,
banks or angel investors. But sometimes, the traditional way is not always perfect. Hence, in
present times, the potential funding opportunities have totally changed. There are various sources
or methods of raising fund for the business. Some of them are given below:
 Crowd funding: It is known as a collaborative system in order to generate money or
source of income. It focuses on comprehensive wealth of individual networks. The use of
this method is identified as modern although charities have exploited for some time. One
of the biggest advantages is the crowd-funding to limit the threats to each stakeholder
(Seliverstova and Grigorieva, 2019). Each individual can contribute as little or as much
as they want to the investment. Also, it is very significant to do vital research before
using this method. Analyse and check the terms and conditions in a careful manner to
make sure one get exactly what they desire from the deal.
Merits Demerits

 It involves a communication of ideas,
opinions and perceptions which
delivers a professional advices and
feedback to improve performance.
 It involves quick process in sourcing
fund.
 The brand reputation might be damaged
if the project does not work or succeed.
 By comparing it with traditional
methods of sourcing funds it will not be
a simple method against all.
 Friends and family: If an individual borrow funds or money from their friends, relatives
or family members, then it creates an inexorable emotional element to the process of
investment which involves risk. There may be a chance that family members may want
more control over the business. Nonetheless, many of the business companies boost their
funds from friends and family which is a great idea to generate money. One can enjoy a
range of connected goodness covering less aggressive repayment plans (Tiwari, Gepp and
Kumar, 2020).
Merits Demerits
 Friends and family are inclined to say
“yes”.
 The business can be built on its on
schedule as friends and family can
provide desirable time to develop.
 Through this method, value may be
added as friends and family may not
understand the business.
 It may harm the close relationships and
bonds.
 Peer to peer lending: This kind of funding can be connected with the new comer and
associates individual borrowers with lenders. In order to giving services and agent is
appointed. An internet has been a device in the increase of such kinds of sides and there
is a sufficient amount of players in the marketplace (Bolli, Renold and Wörter, 2018).
Peer to peer lending taken as an umbrella that encompass diverse situations. Some of the
sites of crowd-funding will be peer to peer services in that they relate financier as well as
enterprise directly.
Merits Demerits
 An individual can look out the aspects  In some jurisdictions it is not permitted

in order to source funds which is reliant
on the credit profile of the borrower.
 It offers higher returns to the investors.
such as UK, Canada, Australia,
Argentina and New York. Therefore, it
requires some platforms to comply with
investment regulations.
 Anger investors: It is recognised as one of the most famous source of generating funds
for many start-up organisations. It is independent in nature and may be a part of big
investment group. They have long term insight in order to generate value of the
organisation. It is also a risk taker for the company. In general cases, they demand or
request a share of equity of the business and anticipate to earn high returns. Hence, they
offer more than just financial support (Alexiou, Wiggins and Preece, 2020). Additionally,
angel investors often share the expertise of business to make sure that the project is a
success.
Merits Demerits
 It does not involve any kind of
repayment or interest.
 It supply better discipline because of
the outside scrutiny.
 It is inappropriate for investments
below Euro 5000 or more than Euro
500, 000.
 It requires long time to recognise a
suitable angel investor.
Recommend tools to protect or retain the knowledge and intellectual property.
Intellectual property rights signify as the ownership rights that an individual can have
over something that they create or make as a result of their own original ideas (Wu and Hu,
2018). It is important to understand about the intellectual property rights if the idea has economic
value as it can protect it from other person in an attempt to use for their own benefit. The
intellectual property can be protected in the following ways:
 Copyrights: It is a method through which and artistic or written work can be protected
against any wrong attempt. It is important that creative and artistic work should be in a
tangible form as idea cannot be protected by themselves. Copyrights can safeguard
paintings, sound recordings, manuscripts, novels, photographs and many more. It shows