YOYO Drinks Innovation Strategy: Semester 2 Report

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BUSINESS INNOVATION AND COMMERCIALISATION

Executive Summary
In this report, the concept of innovation and the difference with invention have been
discussed. It covers the context of YOYO Drinks. The value and significance of
innovation and different types have been analysed. 4Ps of innovation and its benefits
have been evaluated. Various processes like New Product Development and innovation
funnel have been discussed. The concerned organisation needs to build various tools
and techniques and all these techniques have been analysed. Different tools have been
identified for making the protection of intellectual property rights of the company.
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Table of Contents
Part A............................................................................................................................... 4
Introduction ..................................................................................................................... 4
1. Explanation of the innovation and how it is different from invention. ...........................4
2. Discuss the value and importance of innovation to organisations and explain how Mr.
Bond can turn YOYO Drinks into an innovative company................................................5
3. Provide an overview of the different types of innovation with a focus on disruptive and
incremental innovation, and explore the pros and cons of each approach......................6
4. Explain the 4Ps of innovation and how this supports capability and management of
innovation. Advise YOYO Drinks which form of innovation they should engage in..........8
5. Discuss how New Product Development processes and innovation funnel can be
used by YOYO Drinks to drive new innovative ideas/products to market.........................9
6. Analyse what is meant by frugal innovation and provide examples of how
organisations are using it............................................................................................... 12
7. Recommendations on how YOYO Drinks can benefit from this concept....................12
Conclusion..................................................................................................................... 13
Part B............................................................................................................................. 14
Introduction.....................................................................................................................14
Background to the company and the problem................................................................14
Explain how your group used a commercial funnel to provide a solution to this problem
....................................................................................................................................... 14
Details of innovative new drinks proposed.....................................................................15
A summary of the marketing opportunity of the innovative new drinks product proposed
and how it would meet the needs of stakeholders..........................................................15
Overview of the industry and competition.......................................................................15
Financial Projection: Resources required for proceeding with the innovation business
case................................................................................................................................16
Sources of funding available to the YOYO Drinks..........................................................17
Any capital/ funds that are required to be raised............................................................17
Techniques for testing the effectiveness of new drinks produce and where this will fit
into the process..............................................................................................................18
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Evaluate the different tools YOYO Drinks could use to protect the intellectual property
rights of a new drink....................................................................................................... 19
Conclusion..................................................................................................................... 19
References..................................................................................................................... 20
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Part A
Introduction
The term innovation can be defined as the process of conversion of new as well as
innovative approaches into services and goods (Tidd and Bessant, 2018). Moreover,
innovation also improves the usefulness of the product and supports the company in
order to accomplish the requirements of the clients. In addition, for providing correct
data regarding innovation technique, the idea must be innovative as well as unique.
Innovation can also be described by using different factors like the present situation of
the market, various cultural perspectives or the requirements of the consumers. The
present study deals with different processes and techniques of innovation and
commercialization that can be included by the YOYO drinks in order to improve the
business processes. YOYO drinks is a UK based organisation that manufactures
mango lassi, and other types of lassi oriented drinks.
1. Explanation of the innovation and how it is different from invention.
In one line, innovation can be defined as the crucial process that is applied to an
organisation in order to achieve success (Berry and Berry, 2018). There are different
types of processes under innovation that includes core process, business model,
channels, the experience of the consumers, services and products offered by the
company and others. Here, the term core process refers to the uniqueness and
innovative technology that helps to perform the work without any difficulty. The business
model is used for making a profit. The term product performance refers to the various
features and functionality of the employees. The basic difference between innovation
and invention is discussed below:
Criteria Invention Innovation
Definition The term invention can be defined
as the techniques of giving totally
new ideations that do not apply or
used before for the services and
products of any firm (Cowen and
Shenton, 2017).
The term innovation can be
interpreted as the process of
transforming an individual concept
into goods and services that
produces purpose or for which
consumers will spend (Jensen et
al., 2016).
Aim The main motto of the invention is
to manufacture new products that
do not exist earlier.
Incorporate new value to the
existing products and services that
are offered by the company
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Concept Constructing unique theories and
tactics based on the initial idea
Execution of the effectively existing
approaches in business
procedures and services.
Skills
required
The scientific skill set is
necessary for the invention
process.
The various skill set is required for
innovation such as strategic,
technical, marketing, decision-
making and others.
Main
concern
Incorporation of new and
innovative products and services
in the organisation
Innovation technique includes
complete development of a wide
range of products and services
Occurrence It occurs when the research and
development cell of the company
obtains a totally different idea
Innovation technique occurs when
the company wants to enhance the
existent goods and services
Activities Invention technique is limited or
bounded to the research and
development department of the
company.
An entire organisation is involved
in the case of an innovation
technique.
Table 1: Difference between innovation and invention
2. Discuss the value and importance of innovation to organisations and explain
how Mr. Bond can turn YOYO Drinks into an innovative company.
The term “Innovation” is highly essential in every aspect of life. People cannot survive
without innovating anything in their entire life. Just like that, innovation also helps the
organisations to survive in the market. Without innovation, organisations cannot create
their position of high standard. So, there are always several values and significances of
innovation in the life of organisations.
Vision
All the organisations have different business strategies but most of them have almost
the same vision of getting profitability and market recognition. This can be achieved by
applying a range of new innovative ideas and technologies in the different activities of
the companies. Mr. Bond has made the vision of being in standard position in the food
market of UK.. Management needs to apply innovative strategies for producing other
drinking products apart from mango lassi.
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Leadership
Innovation is basically focused on the changes of the operations within the
organisations. It also influences the activities of leaders, managers and team members.
YOYO Drinks needs to make ideal leadership approach for implementing innovative
ideas and strategies.
Culture
Organisational culture can be improved by bringing the innovation in the workplace as
innovations always have positive effects on the company’s activities. Managers are
leaders are responsible to support the workers to develop an organisational culture,
which can largely accept the concept of innovation.
Teamwork
The level of teamwork can be enhanced by making innovative strategies within the
workforce. It helps to build the motivation among the workers and the self-belief among
the leaders and managers. Effective teamwork could bring the opportunity for the
organisation to build the organisational culture as well.
YOYO Drinks can improve its production quality, working environment and the
communication system with the customers with the help of innovation. Mr. Bond must
think of manufacturing new products for the customers so that they can have the option
to make their own choices. As per the high demand of soft drink product in the UK, it
can be said that the organisation has a good opportunity to increase their market value
if they can manage to apply innovative strategies.
3. Provide an overview of the different types of innovation with a focus on
disruptive and incremental innovation, and explore the pros and cons of each
approach
Innovations can be divided into four different forms or types. Often, people make false
assumption about an organisation whether it is innovative or not. For that perspective,
the company management needs to analyse the different essential parts of innovation
for introducing innovative ideas in their production processes.
Disruptive: It can also be called as stealth innovation. It refers to the application of new
different technologies within the organisational activities. The nature of this innovation is
very stealthy as new technology can be inferior sometime (Christensen et al., 2015).
However, few issues can be raised by implementing this type of innovation as it is likely
to be expensive and also has fewer exclusive features. It is also very difficult to apply
within the business market. This form of innovation has been seen to be used in the
telecommunication sector.
Incremental: It is an innovation that is commonly used in various business sectors. The
organisations use their existing technologies and increase the value within the market.
They prefer to change or upgrade the features and design of the technology for
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enhancing the performance level (Sheng and Chien, 2016). Different organisations are
involved in making incremental innovation. It is a very useful innovative form that a
company can use within their operation. It is very simple to use and cheap in price as
well. It includes adding new features and removing old features form the existing
products or technology. These processes are called ‘Update’ and even small update
can bring added value within the market.
Architectural: This type of innovation is used in different markets. In this innovation,
simple lessons, skills and technical decisions are taken and applied in other markets. It
is also very useful for the organisations that are thinking of increasing their customer
base. This innovation technique is amazing as long as the market is capacious.
Possibility of the risk can be lower due to dependency of the proven technology within
the market. However, the organisations need to have the knowledge of the changes in
requirements of the market.
Radical: This type of innovation is considered to be the most effective innovation within
the business market. It gives the opportunity to new business organisations for entering
to the market as well as expanding the existing businesses into the new segment of
market (Forés and Camisón, 2016). It involves creating and applying revolutionary
technologies into the organisational activities. For example, the transportation system of
the world did not start with the airplanes but now, it cannot be imagined without the
airplanes at all.
The concerned organisation of YOYO Drinks needs to identify the suitable type of
innovation for them. As they are lagging behind in the market, they have no other option
accept choosing the appropriate innovation forms.
Figure 1: Different types of innovation
Source: (Pisano, 2015)
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4. Explain the 4Ps of innovation and how this supports capability and
management of innovation. Advise YOYO Drinks which form of innovation they
should engage in.
In the innovation planning, 4Ps help to understand to identify the organisational
positions and the way to improve their products by innovating. It provides a direction to
the organisations in which they can reach to the extreme improvement of their
businesses. The essential parts of businesses can also be identified for making the
innovation. 4Ps of innovation indicates towards four different parts or segment of
business.
Product
It is one of the most important parts of a business in which the organisations need to
determine the products for further improvements. Organisations always need to be
perfect in their operations by producing quality products into the market. So, often, they
need to innovate new ideas and technologies to increase the quality.
Process
The organisations implement various processes into their activities. All the processes
are vital for maintaining the operations’ growth. Process like hiring, training, keeping the
supply chain, analysing the market are needed to be upgraded on timely basis ( Alsanad
and Abdel-Razek, 2016). So, innovations are needed in making the various processes.
Position
Position is a term which is important for the entire organisation in the market.
Organisations always focus on improving their positions in the market to increase the
brand value. Proper innovation can largely help the companies to increase the customer
base.
Paradigm
Different organisations apply different ways in their business activities. Success
depends on proper execution of the suitable business model. In order to develop a
business model, innovations should be applied by the organisations.
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Figure 2: 4Ps of innovation
Source: (Bucciarelli, 2015)
The organisation of YOYO Drinks only offers mango lassi to the customers. They need
to introduce more ranges of products for holding the market for longer times. For this,
they can think of introducing radical form of innovation within its operations which may
help them to introduce new innovative products into the market. They should be more
focused on bringing innovation into the products and processes. New innovative
technologies can be helpful for the company to reach the market widely.
5. Discuss how New Product Development processes and innovation funnel can
be used by YOYO Drinks to drive new innovative ideas/products to market
New Product Development
The organisations can get success in the market by continuously working on the
products and their quality. It is essential for the organisations to develop the concept of
product growth and new introduction of products. It helps them to create various options
for the buyer to make their choices. Innovation and its techniques are directly connected
with the process of New Product Development or NPD. This process is systematic and
is valuable for finding ways to grow new products (Marion et al., 2015). Various steps
can be taken for successfully applying the process within the organisation.
 Idea generation
 Idea screening
 Development of concept and testing
 Development of marketing strategy
 Business analysis
 Product development
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 Test marketing
 Commercialisation
These eight steps are useful for processing of the development of new products. It
involves generating and screening the product ideas, development of product concept
and marketing strategy, analysing the business process and product development and
commercialisation of the products. YOYO Drinks should apply this process to get more
control over the market. The organisation is not focusing on introducing more segment
of products which is making them inferior as compared to other companies. They can
generate ideas of innovative products by conducting official meetings with the
production department. Then the marketing team of the company needs to make a
proper analysis of business market for identifying the market trends. All the reports
should be provided to the production team so that they can be able to understand what
kind of products they have to launch.
Figure 3: New Product Development process
Source: (Luzzini et al., 2015)
Innovation funnel
It is a kind of mechanism which helps the organisation to get the idea of applying
innovation in their businesses. It is used for managing the process of new product
development (van den Ende et al., 2015). The chosen organisation can apply this
technique by using few steps, which are the main parts of this tool.
 The organisation needs to assess the opportunity in the market which can further
help them to understand the process of innovation. They must analyse the
market information, customer engagement and other essential factors.
 Management of the company should make a clear concept of the innovative
ideas in order to successfully make the product-oriented and process-oriented
innovation within the operation.
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 The organisation also has to evaluate the market for finding targeting the
customers and testing different concepts. It can be called as a trial run of a
product.
 After the successful accomplishment of the product testing, management needs
to make the decision of going or not going with the products into the market by
determining the future profit margin and manufacturing costs.
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