Innovation and Commercialisation Report: Volkswagen Analysis

This report provides a comprehensive analysis of Volkswagen's innovation and commercialization strategies. It begins with an introduction to innovation, comparing it to invention, and emphasizing its importance within an organization. The report then explores how organizational vision, leadership, culture, and teamwork shape innovation and commercialization efforts. The core of the report examines the 4 P's of innovation (Process, Product, Position, and People), the application of the innovation funnel, and the development of frugal innovation. The report further delves into the commercialization process, including the application of New Product Development and the construction of an innovation business case. Finally, it addresses tools for developing, retaining, and protecting knowledge and intellectual property within Volkswagen. The report concludes with a summary of key findings and references relevant sources, offering valuable insights into Volkswagen's approach to innovation management and its impact on the automotive industry.

Innovation and
commercialisation

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 .........................................................................................................................................1
P1 Innovation and its importance to organisation in comparison with invention.......................1
P2 Impact of organisational vision, leadership, culture and team work can shape innovation
and commercialisation................................................................................................................3
TASK 2............................................................................................................................................4
P3 4 P's of innovation and usage of innovation funnel to shape innovative ideas......................4
P4 Development in frugal innovation ........................................................................................5
TASK 3 ..................................................................................................................................6
P5 Importance of commercial funnel and application of New Product Development ..............6
P6 Build an innovation business case ........................................................................................7
TASK 4............................................................................................................................................8
P7 Different tools that organisations can use to develop, retain and protect knowledge and
intellectual property....................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
Innovation refers to creative ideas, new thoughts and imaginations in form of a procedure
or strategy. It can also be termed as implementation of solutions that is able to met certain needs,
unjointed requirements or present needs of market. Commercialisation is a method of launching
a new product in a market. This term defines not only entry into a mass market but also involves
the process from laboratory into commerce. This report is on Volkswagen company which is an
automotive industry founded in 1937 by German Labour Front and has headquarters in
Wolfsburg, Germany. Its products are auto mobiles and vans (Aarikka-Stenroos and Sandberg,
2012). This assignment includes importance of innovation and its comparison with invention
along with various types of innovation. Process required to commercialise innovation and range
of methods for protecting ideas with their advantages and disadvantages is also been discussed.
TASK 1
P1 Innovation and its importance to organisation in comparison with invention
Volkswagen is an auto mobiles industry which deals in vans and auto mobiles. Company
is being divided into two segments that is Automotive division and financial services. This
company is famous for its innovative and creative car products like SKODA, Lamborghini etc.
Innovation refers to new ways of doing things. It also means doing improvisation in
existing business models and adjust according to changes to gain better services and goods. In a
business era, to implement an innovative idea, it must solve a particular problem and meet with
current requirement without being too costly. Here, it is achieved by giving original ideas or
thoughts about a topic and to produce efficiency with an idea that will benefit general society as
well. There are three types of innovation which are technical, process and administrative.
Volkswagen uses innovation in their company to sustain in competitive world and to attract more
and more customers (Bagchi-Sen, 2010).
Importance of Innovation Produces opportunity for companies: Innovation plays a crucial role in an organisation
because it produces an opportunity for companies to penetrate in markets quickly and
develop a connection to markets which can be a advantage for a firm in increasing
productivity and profits. Here in Volkswagen launching of an electric car has given a
opportunity to company to hire a greater market share and be recognised among people.
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 Create new and original concepts: It also helps in creating concepts which are original
along with providing innovator enthusiasm and confidence so that they take risks and can
implement and get over with it. Here in Volkswagen, they came up with a electric car to
reduce the utilisation of fuel and diesel which was not launched before or thought of by
any company . Growth of a company:When a firm implements a innovative idea and uses a innovative
culture, it will help them in doing expansion and have a market value irrespective of fact
that process of innovation might be difficult. Launching a diesel car in this dynamic
market helps company have a higher market value and expand in marketplace (Bogers
and West, 2010).
 New ideas: Sometimes companies uses tried and tested methods which may be relevant
at times but trying out something new while doing experiments.
Invention is a different concept than innovation as it refers to creating a new brand or
device. Comparison between innovation and invention is mentioned below.
BASIS FOR
COMPARISION
INVENTION INNOVATION
Meaning Invention means happening of
an idea or thought for products
and services which is never
been utilised or launched
previously.
Innovation refers to the
application of ideas for a
product or procedure for first
time.
What is it Launching of a new product. It adds value or extra unit to
something which is already
existing.
Concept It creates an original idea and
its working in theory.
It does practically
implementation of a new idea
or thought.
Skills Required It requires scientific skills. It requires set of marketing,
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technical and strategic skills.
Occurs when It happens when a scientist has
a new idea in mind.
It happens when there is a need
for a product or doing
improvisation in current
product.
Concerned with Its main focuses is on a single
product or process.
It is combination of different
products and procedures.
Activities It is limited to Research and
Development Department.
It is covered across entire
organisation.
P2 Impact of organisational vision, leadership, culture and team work can shape innovation and
commercialisation
Volkswagen company uses different elements which can shape innovation and
commercialisation that have been discussed below.
Vision: It refers to capacity of thinking about or planning about future with imagination.
Vision statement of Volkswagen Group is concentrating on position of company as a global
economic among different auto mobile manufactures. They have three essential goals of fleet
trial which are:
 The electric motors used in test fleet should be powered with regenerative electricity.
 Test vehicles compress this energy by using newest battery technology.
 These batteries must be specificity durable and must have reduced cost to allow the
electric drive to do breakthrough to mass production (Bogers and West, 2012).
Vision helps a company to see their future goals and do innovation according to future
perspective. This is beneficial because launching a product and doing modification in existing
product will require analysation of future so that innovation can give a long term befit with
higher productivity.
Leadership: It is capacity or potential of a person of group of individuals to convince
and direct followers or subordinates of a workplace. This includes creating of sound and
sometimes complex decisions, developing and circulating a clarity of vision, creating goals
which can be easily achieved and giving their followers appropriate and adequate knowledge
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and resources which are required to achieve those set goals. In Volkswagen, leadership helps in
guiding and directing their subordinates and leaders with innovative ideas can encourage other
employees to turn those ideas into realities and develop trust among employees which will help
company to gain higher profits (Ettlie, and Rosenthal, 2012).
Culture: In Volkswagen,company follows a diverse culture that is engineers from
different backgrounds have different linguist skills which will help company to bring different
innovative ideas for commercialisation. These different skills of engineers are used to bring
innovation and modification within a firm.
Team Work: People working in a team will work with more enthusiasm and as different
people have different respective they will come with different and innovative ideas for
Volkswagen . Working in a team also boost morale of employees which will help in increase in
productivity of an individual (Gambardella and McGahan, 2010).
TASK 2
P3 4 P's of innovation and usage of innovation funnel to shape innovative ideas
Innovation mix is done to have a broader concept about investigation on a particular area
of a company. There are 4 P's involved in innovation mix which are Process, Product, Press and
People which has been elaborated below.
Process: Process includes various methods being used while making of a product or
device whereas process innovation refers to modifying existing process so that it can be quick,
efficient and cheaper. In Volkswagen, process innovation is used to make a plan where the
strategies needed to be used and methods to used while implementing a plan. Process is
connected with various other elements which are supplying, selling, recruiting and accounting as
well. It helps in efficiently working of company (Godin, 2012).
Product: Product innovation means modifying product with its packaging, designing
distribution method etc. In Volkswagen, this is used in bringing innovation in cars and
modifying its interior or design .
Position: It means making products which are environmentally friendly and do not harm
society. Volkswagen has launched electric cars which reduce efficiency of fuel and diesel. When
compared to those cars it causes less pollution and as the fuel rates are going high it also gives
benefit to society.
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Paradigm: People refers to individuals who are working within an organisation. In
Volkswagen there are different engineers who work in company in different departments and
increase productivity and profits of firm. As these engineers are from different backgrounds and
have different skills they try to bring out something new and innovative for a company.
(Source: Innovation Funnel, 2018)
Innovation funnel is to deliver new ideas to an organisation which help them to achieve
targets and goals in future prospective. Under this information which is being collected from
external as well as internal sources are analysed and implemented so that adequate information
about invention in an organisation is being determined. After reaching the last stage management
tends to take decisions which relate to aim of a company specifically and appropriately.
Innovation funnel involves three steps which are being discussed below (Huizingh, 2011).
First Step: A company gathers information which is necessary to make changes according
to its demand of customer's which are potential at a market place.
Second Step: This step involves smaller segments of markets in which a company can
sort and develop strategies and plan as well so that they could make changes.
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Illustration 1: Innovation Funnel

Third Step: It is a last stage which is taken by top level managers of a company. With
help of these small segments they give final result that will give high level of satisfaction to
customers.
P4 Development in frugal innovation
Frugal innovation is a method of doing reduction in complexities and products cost and
its production. Moreover it refers to eliminating elements which are not required from durable
goods, for example a car so that it can be sold in developing countries. For achieving a
competitive advantage among its competitors companies uses strategy of low pricing (Kim and
et. al., 2011). Here in Volkswagen, company has launched a car which is affordable to people.
They have brought a luxurious car in a market with a affordable price or customers. Apply is one
of most suitable and appropriate example of innovation as well as frugal innovation. They create
product which are innovative by removing features which are not necessary that will reduce cost
of goods. To develop frugal innovation within an organisation some steps are required to be
taken which are mentioned below. Determine area of improvement: This is a initial step under which a company
determines an area of improvement in their organisation. Manager of Volkswagen enlist
all points which are required to be modified or bring innovations for. Make alternative solution: After problem is being determined, they take opinions of
workforce regarding all issues and note down various alternatives for a solution. Choose most appropriate solution: From list of alternative solutions, an individual
chooses most suitable solution according to their requirements and wants. Sustainable solution: In this stage the resistivity of a solution is being analysed to
acknowledge whether it can work for longer duration of time or not. If not then another
solution is being chosen (Lindič and et. al., 2011). Shape clients behaviours: Under this process companies meet the requirements and
wants of customers and are able to deliver good quality of products to them.
 Engage and iterate: There are many situations where the clients can not ask for more
improvement in existing product and can meet their requirements effectively.
Therefore , company want to have customer with potential along with their products so
that they can full fill demands effectively (Snow and et. al., 2011).
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TASK 3
P5 Importance of commercial funnel and application of New Product Development
Commercial funnel is defined as an idea which starts along with concentration on a huge
numbers of potential clients and come to an end with a few numbers of customers who can really
purchase companies products and services. It also involves different steps to have higher profits
which are interest, evaluation, surprising decision, re-evaluation, and repurchase phase. All these
stages are very crucial to develop their position in a market. Importance of commercial funnel
are being discussed below.
 It is duty of management to assess gathered data and information in an appropriate
manner so that valid conclusion can be drawn out. It is of utmost importance for a firm
to give a high level of satisfaction to customers.
 With the help of commercial funnel, organisations can create high quality of goods and
services which can attract large number of customers. Through this, they get potential to
attain objectives and goals effectively and efficiently and they get sustainability in a
marketplace for a loner duration of time (Teece, 2010).
 It also help in developing a goodwill which is positive of high value which creates a
image of brand in the minds of customers.
Application of new product development: A firm creates a process plan to make new products
and services. Under this they follows various steps which are mentioned below. New product Strategy: Managers of a company create strategies which develop new
product. They analyse requirements and wants of customers and make plan accordingly.
 Idea generation:They come up with various alternative ideas which is benefited in
creating new products.
 Idea screening: Enlisting all alternatives the most appropriate alternative is being
chosen out. Business analysis: They determine the possibilities of growth of business within a
market place, which helps in improving there position in future perspective and
determine all opportunities which are available for a company to make strategies. Product development: Under this strategies for product development is being analysed.
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 Market development strategy:Under this doing launching of a product in amarket is
being analysed.
 Commercialisation: This is most important step among all the stages of new product
development process. It is a process of distribution of product and services at a market
place and is a only activity which generates revenue (Thore, 2012).
Business case is helpful in determining goals and objectives and make an appropriate
plan to achieve those goals and objectives in an effective and efficient manner. For
Volkswagen, it is necessary to monitor all tasks properly in order to survive in competitive
market.
Executive summary Volkswagen is an automotive industry founded on 28 may 1937 and
headquartered in Wolfsburg and has flagship marque of Volkswagen
group. Its product are auto mobiles and vans.
Vision of company It focuses on rank of Volkswagen Group as a global economic and
environmental leader between various auto mobile manufactures.
They have four goals which make them successful, fascinating and
sustainable auto maker in world.
Need for innovation Usage of cars is being decreasing due to high rates of fuel and diesel.
Solution Company launched an electric car in market .
Consumer Analysis Customer find this car affordable with so many luxuries and features
and it give customer satisfaction.
Creation and
improvement
For launching an electric car, fuel and diesel consumption was reduced
and electric feature is been added. Along with this company also
modified some existing features of car.
Acquisition of funds Although it was a large company with good financial state still has
borrowed some money from financial institutions. Funds can be
accessed from various institutions like banks and financial institutions
and other government bodies.
Benefits Availed Launching an electric car, the company got a high reputation and
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goodwill in market place which increases their productivity and
profits.
TASK 4
P7 Different tools that organisations can use to develop, retain and protect knowledge and
intellectual property
Innovation is a method of converting thoughts or ideas into products and services in a
manner which creates value for customers. Company's managers make use of this factor so that
they can increase market share and profitability. Leaders of a company are involved in process of
innovation and they encourage and motivate members of team to achieve vision of a company.
Personnel manager of Volkswagen gives training to workforce so that they can enhance their
knowledge and skills and these trained people help in successful achievement of goals and
objectives effectively. Different tools that are used by an organisation to develop, retain and
protect knowledge and intellectual property are being discussed below (Walsh, 2012).
Copyrights: It refers to legal right which is given to a company with the permission of the
creator of an original work so as to use their work for a specific time. Under this no organisation
can use the products or ideas of company without a legal agreement if one does this, it can be a
punishable offence. It can be done only for tangible products like software, books, photographs
etc.
Patents: It is a form of intellectual property. A patent grants permission to owner to
exempt others from making, selling, using and importing an innovation for a specific period of
time which usually lasts for twenty years. These right are given in exchange for enabling
disclosure of public of invention. Under this government grants permission to an inventor that an
individual can copy or manufacture same things in market but for a certain period. When
government gives permission to organisation to copy their products they uses different
techniques to distribute their products in market (Wonglimpiyarat, 2010).
Trademark: It is a sign which is recognised and determines products or services of a
specific source from others. They can also be termed as service marks. Owner of trademark can
be an individual, organisation which runs a business, or any legal entity. It is located in package
of product, a label, a voucher or product itself. It can also be a name of a company, logo etc.
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