Innovation and Commercialisation of YOYO Drinks: A Business Report

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INNOVATION AND
COMMERCIALISTAION
YOYO DRINKS
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Contents
INTRODUCTION............................................................................................................................. 3
PART A........................................................................................................................................... 4
1) MEANING OF INNOVATION...................................................................................................4
1.1) HOW INNOVATION IS DIFFERENT FROM INVENTION.........................................................4
2) VALUE OF INNOVATION.........................................................................................................4
2.1) WHY INNOVATION IS IMPORTANT TO THE ORGANIZATIONS?...........................................5
2.2) TO TURN YOYO DRINKS INTO INNOVATIVE COMPANY.......................................................5
3) DIFFERENT TYPES OF INNOVATION AND THEIR ADVANTAGE AND DISADVANTAGES...........5
4) 4 P’s OF INNOVATION............................................................................................................8
4.1) WHICH FORM OF INNOVATION YOYO DRINKS SHOULD ENGAGE......................................9
5) NEW PRODUCT DEVELOPMENT PROCESS AND INNOVATION FUNNEL...............................10
5.1) USE OF NEW PRODUCT DEVELOPMENT PROCESS AND INNOVATION FUNNEL TO BRING
INNOVATION IDEAS\ PRODUCTS TO THE MARKET..................................................................11
6) FRUGAL INNOVATION..........................................................................................................12
REFERENCE.................................................................................................................................. 13
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INTRODUCTION
Innovation is an application of imagination, initiative and information in creating different and
greater value from available resources and involves all the process by which generated new
idea can convert into useful product or service. This assignment represents the importance of
innovation in the success of the organization with respect to YOYO Drinks. If the organization
wants long term sustainability in the market, innovation is an essential element. Innovation
refers to the method or process of translating a new idea, imagination or creative thoughts into
the goods or service (Baregheh, et al, 2009). Innovation means production exploitation and
adoption of value-added originality in the social and economic sphere. The process of
introducing new product, service or method of production to the market is known as
commercialisation. The broader concept of commercialisation contains marketing, sales,
production, distribution, customer support and other functional areas for the success of new
product or service.
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PART A
1) MEANING OF INNOVATION
Peter Drucker defined innovation as “A change that creates a new dimension of performance”.
Innovation is the process of transforming any new idea, new imagination and thoughts into a
useful product or service. It is not only about implementing new ideas, thoughts or method. It is
the set of multiple activities that are useful to define a new way of doing things (Baregheh, et
al, 2009). Innovation helps in deriving an original concept and very essential in the optimization
of operations. Companies can easily identify new opportunities or solution for a complex
problem with the help of innovation. Various theories and models have been developed to
support innovation.
1.1) HOW INNOVATION IS DIFFERENT FROM INVENTION
The invention is something which is refers to the first time creation of product or introduction
of a process. While innovation means when someone required making some changes and
improvement in the existing product, services or process and it is continuous in nature. The
scope of the invention is limited to the R& D department on the other hand scope of innovation
is wider across the various department of the organization (Powell, 2017). The invention is
more related to a single product or service while Innovation is a combination of different
products or services. Invention required scientific skill whereas Innovation required a
combination of marketing, strategic and technical skills.
2) VALUE OF INNOVATION
For the sustainable future of the organization and to develop a strong organization, Innovation
is an essential element. Without Innovation, an organization is not capable of serving the
customer in the future many more. Innovation is an integral element for the organization to
achieve success and for the continuous growth of an organization. In the process of Innovation,
everyone has to play a role effectively. Innovation involves risk but it discovers what is possibly
good for the organization (Ceccagnoli and Rothaermel, 2016).
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2.1) WHY INNOVATION IS IMPORTANT TO THE ORGANIZATIONS?
In this dynamic world where everything changes continuously Innovation is necessary for the
organization to sustain. Failure to innovate will result in dissatisfaction of customer and
employees of the organization also suffer (Petkovska, 2015). Innovation is important for the
organization to increase profitability or customer base in the existing market as well as in the
new market.
Innovation helps YOYO Drinks to develop dynamic products to attract more customers, making
changes and improvement in the existing product and developing or implementing new ideas.
Through innovation, YOYO Drinks is able to solve the complex problem easily. It will improve
the problem-solving approach of YOYO Drinks. Innovation enables YOYO Drinks to focus on
creating and developing new product as per the need of the customer.
2.2) TO TURN YOYO DRINKS INTO INNOVATIVE COMPANY
Innovation is what that makes any organization to keep going and producing a quality product
to gain a large customer base and satisfaction (Baregheh, et al. 2009). Sameer has to combine
different resources, ideas and opinions to bring success. There is a number of competitors of
yoyo drinks in the market so Sameer has to analyse strategy and product of competitors and
then create something new that will differ from the competitors. He can make changes in the
packaging of the drink that will attract more customers because the packaging is what that first
visible to the customer and if the packaging is attractive then it will get the attention of more
customers. He can introduce a vending machine that will allow customers to get a drink by
putting money into the machine. Today customers want to buy beverages that will contain low
sugar and calories but taste good and it is possible to develop that type of product. So he
should try to make the product which tastes great and contain low sugar and calories. There is a
type of machine that makes use of sweeteners smartly he should make use of those machines
to make customer satisfy. He should increase the smaller size packs and focus more on
advertising low or no calories products that will be healthy.
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3) DIFFERENT TYPES OF INNOVATION AND THEIR ADVANTAGE AND
DISADVANTAGES
Basically, there are four types of innovation
INCREMENTAL INNOVATION- Incremental innovation refers to the innovation which makes use
of existing technology to create more value of product or services for the customers of the
existing market (Garcia, 2015). Incremental innovation is the most common type of innovation
that an organization uses. For example extraction and addition of any feature or design to an
existing product. YOYO drink can use this innovation to provide value-added products to the
customer that will satisfy customers for example YOYO Drinks can produce that type of drink
that will contain large amount of nutrients because they are producing this drink for their
existing customer so they know customers requirement they only need to make changes in the
feature of the product or if there is any ingredient in drink that will not good for the health of
customer so they should delete that ingredient.
ADVANTAGES
To increase existing products sales. As in the incremental innovation we utilize existing
technology to add value to the customer so it is very useful to increase sales of product because
a customer is getting something valuable.
To increase profitability for existing products or services. It helps to increase sales that will
directly result in an increase in profitability.
Without removing the current business model discovers a new business model. It does not
affect the current business model and creates a new business model for the organization
(Garcia, 2015).
Help an organization to gain a competitive advantage. Because in this type of innovation
organization tries to add value and this will help to compete with the competitors.
DISADVANTAGES
It is a challenge to create improved or differentiate products to add value. Sometimes it creates
a challenge to an innovator to new product or services using the old technology.
Not good for the more discrete design or smaller innovation. If a small change has to be made
then it is not for that type of innovation.
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DISRUPTIVE INNOVATION- In the current market when new technology or process is applied or
implemented then it is known as Disruptive Innovation. It is also called as stealth innovation
(Investopedia, 2019). The application of disruptive innovation affects the functioning of the
market or industry. For this innovation, YOYO Drinks can create an independent operating
model that will work independently from the other systems or process that will drive YOYO
drinks core business. Because disruptive innovation is related to make a change in the
technology or to implement new technology in the current market so YOYO Drink should
implement combination and integration of technologies that will make the product of YOYO
Drinks more useful for the customer.
ADVANTAGES
Small companies get the advantage of this innovation because it helps small companies to
compete with others by creating a new segment of the market.
It will be beneficial to customers by providing better. By providing a useful product to the
customers it is beneficial for the customers.
Helps to sustain in the competition by implementing a combination of technologies and make
changes in the technology because now a day technology is seen as the driving factor of
business (Garcia, 2015).
DISADVANTAGES
There are already competing products exist that can attract your customer.
Disruptive innovation is very difficult for big or established companies.
RADICAL INNOVATION- Radical innovation means the development of new industries and
creates extremist technology. It involves entering a new market with new technology. Radical
innovation completely fragments the existing business or industry (Garcia, 2015). It replaces the
entire existing processor system with something new.
ADVANTAGES
It changes the thinking process and leads to the development of a new market or industries.
Provide a chance to create an entirely new market or brand.
This type of innovation is more profitable for new players in the market.
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DISADVANTAGES
This is a large scale approach; context and purpose both are disrupted by radical innovation.
Timing is very important while talking about radical innovation it will be perfect if timed well
otherwise it will be not.
ARCHITECTURAL INNOVATION- When innovation occurs in the architecture of the product that
will result in a modification in the way that various components link or interact with each other
is known as architectural innovation (Han, 2017.). This also explains how innovation in the
product can affect the procedure of an organization and the competitive strategy of the
organization.
ADVANTAGES
It is good for the firm’s reputation.
It will increase the productivity of the organization.
It will help to beat competitors.
DISADVANTAGE
Take more time and requires more money.
A firm's architectural knowledge demolish by architectural innovation.
4) 4 P’s OF INNOVATION
The four P's of innovation which helps to carry out an investigation simple on a particular area
of the organization.
PRODUCT-The first P of the innovation that comes to mind is the product. This involves change
and improvement in the products which is offered by company (Visnjic, et al, 2016.). YOYO
Drinks can expand their product line to the different types of drinks according to the need of
customers. For example, YOYO Drinks can expand a range of products to no sugar drink, low
calories drink, diet drink, Full of vitamin drink that will satisfy the need of each type of
customer.
PROCESS-Another P of innovation is process refers to the procedure or the way in which
product is produced or developed. It includes changing in the way in which product is delivered,
Improvement in the way in which products are created (Jensen, et al, 2016). For example, YOYO
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Drink wants to provide their new products at a low price for this they have to make changes in
the distribution or manufacturing process. This will help YOYO Drinks to provide their product
at a reasonable price and it will directly help YOYO Drinks to increase their customer base.
POSITION-Position in P’s of innovation refers to creating an image of your product in the mind
of customers and to make this image better. It includes a change in the surroundings in which
the products and services are produced or framed and change in the target customers to whom
YOYO Drinks is going to provide products. This revolves around organization product
communicated to the customer, how customers see organization product and to make it better
(Jensen, et al, 2016).
PRESS-Press refers to the atmosphere or climate in which the organization operates or
functions to develop the product. In other words, it can be said that in innovation press is
related to the relationship between people and the environment (Jensen, et al, 2016). It
moderates the outcome by affecting elements related to the creative process rather than
directly shape the creative outcome. Ford (1996) offered a very useful term “social domains”
according to him there are four levels of explorations of social influences on creativity can be
traced
a) Groups
b) Organizations
c) Institutional environment
d) Markets.
There are many factors related to the organizational climate and plays a vital role to cultivate
creativity and innovation in the organization.
4.1) WHICH FORM OF INNOVATION YOYO DRINKS SHOULD ENGAGE
As the sales of YOYO Drinks decreases so it should focus to innovate in the product YOYO Drinks
should provide different flavoured drink like watermelon, mango, lemon, pineapple, strawberry
and pomegranate which will be good in taste as well as good for the health. YOYO drink can
make changes in the existing product by adding some new features like no sugar, low calories
and to use natural ingredients that add sugar in the drinks which will not bad for the customer's
health. After making some changes in product YOYO Drinks should also engage in position
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innovation because it is very important to create image of product in the customer’s mind as
there are number of competitors of YOYO Drinks in the market it should improve the channels
to communicate its product to customers and benefit of the products to the customer in the
right way.
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5) NEW PRODUCT DEVELOPMENT PROCESS AND INNOVATION FUNNEL
NEW PRODUCT DEVELOPMENT PROCESS
In order to grow continuously and to get success companies to have to introduce new products
by carefully implemented new product development process. There are thousands of products
that undergo new development process but few of them reach to the market (Marketing-
insider.eu, 2018.). Companies want to develop the product that delivers superior value to the
customer for this it is very essential to understand customer, market, trends and competitors
carefully.
The new product development process consists of eight steps
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INNOVATION FUNNEL
Innovation funnel is a tool or mechanism that helps an organization to select the best ideas out
of the many ideas and make an idea viable. Innovation funnel is a very powerful and excellent
tool that prioritises ideas and suggests the best idea for product development (Wang,
2017).According to Henry Chesbrough Ideas can come from an individual within an organization
but also from external customer and partners. Different types of ideas for the product and
process development enter the funnel for screening few ideas get extracted and best ideas will
remain.
5.1) USE OF NEW PRODUCT DEVELOPMENT PROCESS AND INNOVATION
FUNNEL TO BRING INNOVATION IDEAS\ PRODUCTS TO THE MARKET
New product development process enables YOYO Drinks to generate a new idea for the product
and to filter those ideas it also includes to a detailed new product in the meaningful term that
will be understood by the customer, helps to develop the concept that has strong consumer
appeal (Marketing-insider.eu, 2018). After idea generation, development and testing of concept
the next step in the new product development process is to develop a marketing strategy for
introducing a new product in the market this marketing strategy are based on the product
concept. To review the cost, sales and profit of the new product and to analyse these factors
satisfy the YOYO Drinks objective or not. Develop the prototype of the product and then test
the product in the market. All these steps provide needed information to the management to
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