Comprehensive Report: Innovation Within a Small Business Context

This report delves into the multifaceted aspects of innovation within the framework of a small business. It commences with an introduction that underscores the significance of innovation, particularly within a business context, using Chilly as a case study. The main body of the report explores the importance of innovation and invention, highlighting their roles in driving growth and enhancing credibility. It examines the crucial roles of vision, teamwork, and leadership in fostering innovation and commercialization. Furthermore, the report investigates the '4Ps' of innovation (product, process, position, and paradigm) along with the application of the innovation funnel. It also covers the practical application of frugal innovation, the significance of the commercial funnel, and the new product development (NPD) process in organizational contexts. The report includes a business case study and concludes with a discussion on tools to protect intellectual property. The report references various sources to support its analysis, and the content is designed to provide a comprehensive understanding of innovation in a small business setting.

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.
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. Invention is basically the unique method or
precess which results in the discovery of new product, service or anything.

Importance of innovation Importance of invention
Growth contributor
The most significant importance of the
innovation to Chilly 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 Chilly. For
example the significant innovation of chilly to
produce reusable products will eventually help
them in increasing their revenue and hence will
accelerate their growth.
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 will eventually help Chilly to serve
the customers better and fulfil their needs and
demands which in the end will increase the
profitability of the company. For example the
invention of new process to make the reusable
products will increase the skills of employees
as they will gain better knowledge.
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 Chilly can have their first priority to
innovate that will attracts the best talent from
all over the world. For example the innovation
to make reusable product will attract the
Enhances the skills
Through the rapid and continuous
invention, skills of the Chilly's staff will
increase as they will 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. For example the invention of new
process will shape the skills of Chilly's
employees as they will gather all the possible
information form different sources.

candidates to contribute their innovative ideas
and hence chilly will have the diverse
workforce.
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. For example Through inventing new
products that are different from competitors
Chilly will capture great market share as there
will be more customers.
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
Commercialization is basically the procedure and method through which companies
introduce the new product as well as production method in the marketplace.
Vision
The Vision of Chilly is to provide wider selection of the reusable products to the
customers and thus seek more development in the products. 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).
Leadership
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.
Culture
Along with all 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. Thus, culture plays an essential role in developing good
environment.
Teamwork
Apart from all these, 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. By
working in collaboration, employees feels the sense of belongingness and thus they strive
willingly to innovate the products.
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. For example Chilly is bringing its new product that is reusable products. Stepping
out the constraints of plastic, Chilly has innovated them to reusable products which is the perfect
mixture of different lifestyle and unrivalled performance.
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. For example
Chilly can have innovative manufacturing process which will help them to quickly respond to
market condition and hence deliver the products at right time. Besides this, they can have

innovation in their supply chain in which they can use technology to estimate the delivery time
and thus track the supplier.
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 from 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. For example Chilly can
differentiate themselves by highlighting their USP that the reusable products is made up of
organic material and is free of contaminants which does not release pollutants in the content
within reusable product.
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. For example
Chilly shifted its focus to reusable bottles and thus changes its paradigm through bringing
innovation in their operations. Besides this, due to this the entire management and team has been
changed whose focus is now on reusable products.
Illustration 1: Innovation 4Ps
(Source: The 4Ps of Innovation, 2010)
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 consists 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.
Illustration 2: Innovation funnel
(Source: Innovation Funnel, 2016)

Chilly uses the innovation funnel in the most imperative way. Before launching the new
product like reusable products, company first gather the information about it like the customer
needs, future of product, any substitute product launched by their competitors. Once Chilly has
gathered the relevant information, then this information is being assessed by them and matched
by goal. Like the goal of the company is to provide reusable product thus company matches like
number of customers to quantity of product and whether it will serve the customer or not. After
the assessment, company makes strategy to release the new product. Like company finds out that
more and more customers need organic product thus their goal of releasing reusable product is
being fulfilled therefore they release the new product. Here they decide the various marketing
strategies that will be used, cost of releasing it etc.
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 at Chillys
Frugal innovation plays a vital role in helping organisations like Chillys 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 Chillys has been discussed below:
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.
Types of innovation
Incremental innovation
In this type of innovation, organizations generally uses the existing technology and
enhance the value for the customers through the design and features in the existing market. This
is highly important for the Chilly and thus will help them to add new features within the same
product and thus serve the existing market. They can add value to the products and increase the
user experience.
Disruptive innovation
This type of innovation basically involves using the new and fresh technology to serve
the current market. This means using advanced technology and offering products to existing
market. This will be highly significant for Chilly where they can change their overall product and
incorporate new technology in them. For example bringing reusable products is a use of new
technology which company can use to serve their existing customers.

Architectural innovation
It generally involves using existing technology but serving the new market. This
innovation helps the companies to attract new customers and thus enter the new market. For
example this will be highly helpful fort Chilly where they can use their established technology
and thus attract the new customers and enter the new market.
Radical innovation
It is basically introducing the new technology in the new market. In short, in these
companies enter the new market with the help of their new technology. This is very significant
for the companies as it will lead to innovative products along with serving the existing as well as
new customers. Chilly will be highly advantageous from this where they can use new technology
to create reusable products and thus offer this innovative product to the new market to gain
competitive advantage.
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 commercial funnel at Chillys 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