Report: Innovation and Commercialisation Strategies of Toyota Company

This report provides a comprehensive analysis of Toyota's innovation and commercialisation strategies. It begins with an introduction to the concepts of innovation and commercialisation, followed by a background of the Toyota Motor Corporation. The report differentiates between invention and innovation, highlighting their importance to the company. It then delves into the types of innovation, the process of commercialising innovation, and methods of protecting innovation. The report explores how Toyota's vision, leadership, culture, and teamwork influence its innovation and commercialisation efforts. Key aspects covered include Toyota's approach to innovation, its impact on productivity, its competitive advantages, and its strategies for meeting customer needs. The report provides insights into Toyota's business operations, revenue, and its position in the automotive industry. It also examines the company's historical context, its global presence, and its commitment to sustainability and technological advancements.

Innovation and
Commercialisation

INTRODUCTION.....................................................................................................................................3
BACKGROUND OF THE ORGANIZATION.................................................................................................4
DIFFERENCE BETWEEN INVENTION AND INNOVATION.........................................................................4
TYPES OF INNOVATION .........................................................................................................................8
PROCESS OF COMMERCILISING INNOVATION.....................................................................................13
HOW TO PROTECT INNOVATION.........................................................................................................18
CONCLUSION ......................................................................................................................................20
REFERENCES.........................................................................................................................................21
Kim, H. and Kim, E., 2018. How an open innovation strategy for commercialization affects the firm
performance of Korean healthcare IT SMEs. Sustainability, 10(7), p.2476..........................................22

INTRODUCTION
In this globalised world, technology has played a crucial role in changing things,
either it has provided positive outcomes or negative consequences based on the nature of an
activity it is being done. since, technology has come into existence, it has provided a
company or an individual with an opportunity to do innovation and they have successfully
achieved their aims and objectives. Innovation is considered to be a complex process which
basically includes a variety of activities which are diverse in nature and it is considered in
order to get the outcomes that are determined. It can be said that innovation is a globally a
novel idea that involves the generation and perhaps it is done for making the things easier and
far better. Once the innovation s being done, commercialisation is important because this is
the sources through which an innovation can achieve its intended societal benefits. While
talking in terms of companies who are doing innovation and letting people know about the
same uses the best commercial process and thus, attain benefits from the same. There are
numerous activities that are present in the market area and could provide commercial success
but the thing is to utilise those elements effectively for better results like, before making the
product it is necessary that product is being licensed so that it can be protected from other
firm from being copied.
Therefore, this report is based on the role of innovation and commercialisation on
Toyota Company, which is a Japanese multinational automotive manufacturing company
established in the year around 1937 which is around 82 years ago. Since them, this company
is not failing in providing effective services and facilities to its customers and most
importantly it is doing some or the other innovation and becoming successful in the same.
Henceforth, this report will include some information related to the company and how they
are doing innovation and commercialising the same and attracting its customers. Moreover, a
difference between innovation and invention is also included in this report for having a better
understanding about the concept and why it is an important factor & how it is different from
one another. In some situation, innovation play an important role as it motivates an individua
or a company in developing their vision. Moving further, in this report an information related
to types of innovation i.e. 4Ps is mentioned and how it helps in filtering the idea and selecting
the one on which an innovation can be done. Moreover, in addition to this, process of
commercialising innovation is explained and role of commercial funnel and its importance
within the organisation is mentioned. After innovating a product, it is crucial that certain

measures are taken by the company so that it can be protected so, lastly, different ways
through which an innovation can be protected is mentioned in this report. As a result, it will
help in examining the strengths and weaknesses within the techniques of innovation and
commercialisation.
BACKGROUND OF THE ORGANIZATION
With the change in course of time, many companies have established themselves and
proven their existence & has become one of the renowned companies across the globe.
Unlike all this, Toyota Motor Corporation, a Japanese based multinational company deals in
automotive sector was launched in the year 1937, founded by Kiichiro Toyoda, is now largest
automobile manufacturer in Japan. Company is famous for doing innovation according to the
market situation and present time. Besides this, company has become one of the prominent
leaders in sales of hybrid electric market and it is moving towards hydrogen fuel-cell vehicles
although it has reached to its milestones. Since its foundation Toyota has a vision of
manufacturing vehicles according to the guiding principles and the provision of
manufacturing products of high quality so that sustainability of the society can be maintained
for a longer period of time. Toyota has gone through many ups and downs since its
establishment liking reaching to top level in business market to deaths from overwork.
Toyota is operating its business worldwide and with the help of its around 359, 542
employees across the globe. Majorly, company deals in automobiles, luxury vehicles,
commercial vehicles and engines. In the year 2019, Toyota has its production output of
approximately 10, 725, 214 and in the year company’s revenue was around US$275.4 billion.
When talking about total net income of the firm it is of almost ¥2, 142,329 million.
Therefore, Toyota comes amongst the popular choice in terms of buying cars by customers.
DIFFERENCE BETWEEN INVENTION AND INNOVATION
Define innovation and invention. Also define commercialization
Invention – This can be described as the action of inventing something completely new and
different form current (Rasmussen and Eliason, 2017). Invention process refers to anything
which is created by someone and it is unique in its properties. It is very important concept for
TOYOTA company and this will support in developing and enhancing brand image of
organisation. In the process of invention, a product or idea is created for the first time. For
example, respective company is inventing totally new and different process for conducting

business operation or manufacturing products which is never used by any other organisation
can be describe as invention.
Innovation - The term innovation refers to the process of developing and creating anything
innovative. In the process of innovation individual in modifying current products or anything
in order to create something new or different. Innovation can be described as the translation
of existing idea in to different in order to enhance its impact. It is essential for TOYOTA
organisation to consider innovation in its business process and production of products as this
will support in creating valuable products. For example, TOYOTA company is
manufacturing innovative products by changing or modifying its current products or services.
This will help in meeting with the needs or requirement of customers.
Commercialisation – Commercialisation is crucial concept for organisation in order to
increase sales and profits of business. This can be described as the process of bringing
different or new products and services in market area (Li and et.al., 2019). It is very
important for TOYOTA organisation to promote new or innovative manufactured products to
market place in order to inform targeted customers about offering. Commercialisation process
includes different aspect such as marketing, sales, distribution, customer support and other
relevant aspects that is crucial for informing about product and meeting customer
requirements.
Explanation for both concepts and differentiate between them
Innovation and invention are very important part of business and it support in
enhancing organisational operations. There is different between the concept of innovation or
invention in organisation.
Innovation Invention
Meaning This means the improvement
and modification in current
product or idea.
This means that process,
products or idea is developed
for the first time.

Concept Innovation is not completely
original idea or concept. It is
considered as the
implementation of new idea
in practical manner.
Invention is the complete
original concept or idea for
developing any products or
service.
Required skill This required various skills
such as marketing, strategic
or technical skills (Duand
et.al., 2017). This skill will
support in modification in
current products as per the
market needs.
Invention required more of
scientific skills. In this whole
new concept is developed
which has been never seen or
used by others.
Occurs Innovation concept or idea
occurs when business felt the
need of improvement or
modification in existing
products or services in order
to satisfy customer
requirements
This occurs when scientist or
developer strikes with new
or creative idea in order to
invent something useful.
Importance of both innovation and invention to organizations
Innovation means the creation of more efficient processes, products and ideas. This
would confidence to move new ideas, dramatically improving or creating dynamic goods for
a company. This could serve as a base which can help the business grow and enable to adapt
to the marketplace. There is some importance of innovation for TOYOTA can be understood
by following points:
Increase productivity level: In competitive market place, the main focus of business is
to capture larger market share in which they provide quality products to its customers as per
their demand. In this, implementing innovation within their functional and operational
activities can be beneficial in introducing as well as manufacturing innovative and unique
service that contributes in retaining customers for longer period of time and also keep them

satisfied. This will directly contributein attaining higher productivity level at market place
that assist in increasing customers base.
Beat competitors: When company implement innovation and also think innovatively
then it become more easier to compete their rivals by establishing their positive brand image.
For attaining the same, firm is also responsible for develop an effective plan along with more
creativity in which they focus on capturing customers attention by providing them unique
services. This will also may assist TOYOTA in connecting with their customers and at the
same time business can easily attain higher growth at market place.
Apart from this, Invention is really about creating new products, or discovering new
ways of making things. Advancement means bringing this new concept onto the sector, that
is, having to turn a creation into a good or service.Invention is kind of like a piece of
equipment which has been formed or composed, or the ability to create or thinking up
anything, or of finding ways of doing something.In this, some importance of invention within
TOYOTA are as follows:
Reduce issues: It is important for business organization to implement innovative ideas
within the product activities that help in improving overall time performance level. With the
help of this, company can capture larger market share from its competitors. Along with this,
TOYOTA is also reducingthe possibilities of arising any kind of issues and complexities
within the production activities that assist in capturing market share.
Capture customers attention - innovative products provide assistance to an
organisation in grabbing attention of customers in more effective manner. Because by using
same product without any innovation customers get bored with that after sometime. Thus, it
is essential for an business firm to bring something innovative or creative in market area.
How Innovation is developed
An organisation develop innovation by mainly focus on meeting requirement of
customers as well as market. In addition to this, formation of partnership is by market
requirement or developing new products or processes. But innovation is risky so it is viewed
with fear by manager as well as entrepreneur.
Organizational vision, leadership, culture and effective teamwork influence innovation and
commercialization, and how these factors can make an organization an innovative
organization

Toyota vision – Respective company vision is future mobility society, enriching lives
around world with safest as well as most responsible ways of moving people. In addition to
this, through their commitment to equality, respect for planet, ceaseless innovation, reward
with smile and many more. Vision of respective company is to enhance mobility is society as
well as develop more safety in environment. Toyota company is working of these motives
and its will lead to directly influence the innovation and commercialisation in business. In
order to achieve business vision respective company is working to create high quality and
innovate product will enhance mobility in society as well as meet with the needs of
customers.
Leadership- This can be describe as the ability or potential of individual to direct
and guide other for conducting business task and activities in effective manner. Toyota
company is considering supportive leadership which is significant for increase performance
of employees. It is essential for company to have stong leadership in organisation for
attaining desired goals of business. Toyota company performance and capabilities will be
directly influenced by this elements of business and affect its performance. Supportive
leadership practices of respective company will lead to assist in enhancing capabilities of
employees as well as conduct organisational task in more significant and effective manner.
This leadership style of Toyota encourages employees for developing innovative product and
attain goals of business.
Culture – This includes the system, attitude, belief or assumption of organisation in
which company is performing organisational task. It is very important that respective
company have positive and friendly working culture that will lead to have significant impact
in capabilities of employees. This type of working culture will lead to reduce in
organisational conflits and successfully attaining goals of organisation. Respective company
have positive working culture and in this employees are helping each other to correctly
perform task. This will lead to have direct impact in productivity and quality while
developing innovate products.
Teamwork – This refer as capabilities of person to work correctly and accurately in
group of people. Team work is essential part of organisation and it is important that
respective company have strong team work in organisation in order to attain goals. Toyota
company have strong teamwork while carrying out business practices as well as conducting
innovation and commrcalization task. Respective company have strong teams which will

significantly impact on creation of high quality and innovation products for potential
customers. Respective company has classified employees into different teams which will
includes employees of smilier skills and potential.
There are several factors which have which have impact on innovation of company
such as leadership, culture, effective teamwork, vision and many more. All these need to be
done in positive manner so that better outcomes will be gain in effective manner. For
instance, while working in team within effective manner business firm will able to conduct
their operations in proper manner as there will be no pressure on particular person as it result
in accomplishing goals and objectives in better manner.
Sources of innovation including the merits and demerits of each source.
There are several sources of innovation some of them are mention below :-
 The unexpected – According to this innovation take place unexpectedly or happen by
chance. Major demerit of this innovation is that sometimes company looking for
something but they stumble upon something else.
 Incongruities - When the need is incongruent with the supply, innovation might be
born. In an attempt to resolve the existing incongruities people might innovate.
TYPES OF INNOVATION
4P’s of innovation
Innovation is a term which is very versatile and used often frequently. From the
company’s point of view innovation is like a strategic process or the process that is related to
significance provides company with benefits from the market area. Most of the companies
does innovation with the purpose of getting a brand recognition and increase in the profit and
market share. For a company an innovation can, be related to a product wants to develop or
the services they want to provide, all depends upon the purpose and the nature of businesses.
Sometimes, innovation is considered to be a subjective form and later on can be determined
as an activity done for a company, market or industry or for the entire world. So, whatever
innovation is being done it is according to the extent of change. Generally, innovation is of
four types sustaining, disruptive, incremental and radical innovation.
Innovation, is not about manufacturing a whole new product rather it is said to be a
process in which a slight change in the product is often done and relaunched the same for the

customers so that they can use it and enjoy the features. Thus, a quick specific alteration in
the product is known as innovation. According to the current market, innovation has become
the key aspect as to become successful, company do a certain kind of modification in the
product and present it in front of customers and enjoy the profit shares. Moreover, to
understand this in a better manner, 4Ps of innovation are explained below:
Product Innovation:
Product innovation is mainly defined as a process in which entity engage in the
process of creating new service or product in marketplace by putting improved version
comparatively to previous version in them (Ramljak, 2020). This concept is one of the crucial
tasks for an organisation through which entity can assure their long term success as well as
sustainability in respective market segment and can further fulfil consumer needs and
demands accordingly. In terms with Toyota by taking advantage of product innovation
company can effectively bring their product in market through which can enhance their
profitability at great extent.
Process Innovation:
Process innovation is defined as a concept of implementing new technology as well as
methods in order to conduct function or activity in organisational structure with an aim to
gain more competitive edge in marketplace and further fulfil demand of consumers in more
effective manner (Vertès, 2020). This innovation is being used by respective entity in order to
conduct their functions or process in different way in order to differentiate themselves from
rivals as to generate more revenue from them.
Paradigm Innovation:
Paradigm Innovation involves different set of values, theories, believes and doctrine
based on which innovation is duly launched in an organisation. In context to this form of
innovation Toyota is engaged in new innovation that entity is willing to undertake in there
organisational structure. In addition to this, with the use of this innovation company can
undertake Paradigm innovation in their services and products more infinite manner.
Position Innovation:
This form of innovation is mainly associated with new form of market segment that
an organisation can undertake in order to offer their services and products. In this entity by

taking use of various measures in order to distinguish and classify into different segments can
gain maximum advantages (Mazzarol and Reboud, 2020). Along with this, position
innovation facilitate organisation to maximize their market segment. Further it has been
evaluated that this innovation allow organisation to evaluate potential consumers and further
provide time services and products accordingly to their demand as well as need in order to
enhance their loyalty in satisfaction towards organisation. Toyota by making application of
position innovation can expand their geographical segment through which they can enhance
their profitability and revenue generation capability.
(Source: Innovation Funnel, 2019)
Innovation funnels and explains how they are used to develop innovative ideas
Innovation funnel is termed as a mechanism that enables an organisation to effectively
develop and innovative a realistic action plan. In simple terms it provides a graphic structure
for thinking in relation to screening and generating alternative development option. By taking
use of innovation funnel Toyota undertake different type of steps in developing product or
process according to consumer or market needs to generate more economic value from them.
With the help of this tool company can enhance their market share holding along with
assuring long term sustainability and profitability in respective market segment (Megersa,
2020). It has been evaluated that innovation funnel include three steps in which first step,
Information pedestal with the help of this entity can effectively acquire adequate and proper
information in context to changes as well as trends that are prevailing in marketplace. By
taking assistance of innovation funnel Toyota can undertake innovation in their services and
products at the same time when they acquire information in context to their competitors in
order to further develop their innovation in more effective way. Further it has been evaluated
that second step is associated with efficient monitoring of new ideas that entity is looking
forward to adopt in the form of innovation tool. While if it is talk about third stage, this
provide organisation an assistance to take use of plan, implement, control, process in a
systematic and efficient measure to have efficient and whole control over innovation process
in order to ensure that it is going as per according to pre-determined plan. This has been
evaluated that every company is having diverse form of manner through which they can
undertake use of innovation funnel in order to undertake modifications as per according to
their requirement.
Funnel discussed to chosen organization and benefits and demerits of innovation funnel

Innovation funnel is being undertaken by Toyota in order to conduct and accomplish
their objective of innovation that they are planning to undertake place in organisational
processes to enhance their working (Prifti, 2020). With the help of this excellent tool, entity
aim towards enhancing their sales profitability and competitiveness. Most important benefit
of innovation funnel is that it provides organisation facility of opportunity assessment and
Insights-based ideation. While on the other hand, demerit of this funnel is that, the drive to
feed as many ideas as possible into the funnel may cause congestion that slows down overall
progress.
Concept of frugal innovation
Frugal innovation is defined as a formative amalgamation of frugal mindset, frugal
process and frugal outcomes. It has been evaluated that there are basically three forms of
frugal innovators such as MNC- subsidiary level, grassroots- level and domestic- enterprise
level (Mazzarol and Reboud, 2020). It is one of the most efficient techniques that allows an
organisation to make significant reduction in their overall cost inputs of services and goods
during various stages of production process. This further allows entity to conduct their
production in cost effective manner while assuring maximum outcomes. However it has been
evaluated that innovation get duly affected by diverse range of factors that include political,
social, legal that are prevailing in external environment and have direct and indirect impact
upon performance and profitability of entity. By implementing innovation in their business
organisation Toyota aim towards enhancing efficiency of their business function by reducing
cost input in order to maintain balance between overall margins of profit.
In present case scenario of Toyota entity is taking advantage of funeral innovation
with an aim to increase profitability of organisation in effective manner. In this entity is
undertaking advantage of taking use of their insufficient resources as to further add
innovation or develop innovative product in their existing operations. In terms with Toyota
Company is undertaking concept of innovation in which they are aiming towards to
undertake use of environmental friendly materials in their production process as to develop
their product and services in order to have positive contribution towards environment. This is
one of the most essential aspects now days as it has been identified that consumers are more
tend towards environmental sustainability. Thus, with the help of this innovation company
can not only satisfy need and demand of consumer but can also assure more competitive edge
comparatively to their rivals. Lean manufacturing is very supportive and effective frugal