Innovation deals with making business process, product or services more effective and efficient so that it satisfies diverse needs and wants of customers in an appropriate manner. It is mainly related with implementing with new ideas, enhancing existing product or services so as to gain high competitive edge in the market or to develop new product or services (Baldwin and Von Hippel, 2011). It act as catalyst for company’s growth and development. This report is based on Mr. Green Healthy milkshakes which is a UK based company that mainly deals in providing healthy drink to customers. The report covers how innovation play key role in increasing the sales figure of the company and how it is different from invention. Along with this it also covers application of new product development, commercial funnel, building a business case and different intellectual property tools.
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P1 Define Innovation and its importance in comparison with Invention
Innovation means translating a productive idea into actual goods and services that create value for target customer or for which the customer is willing to pay. It simply means coming up with unique ideas for doing identical or similar things but in innovative manner. In context of business, it can be defined as a change in workflow or business process that help company in gaining high competitive advantage in the Marketplace. In order to make it successful, firm consider innovation as a part of their in-built strategy which help them in sustaining in market for longer period of time. It has been believed that company who constantly undergo innovation process, develop more efficient and effective workflows, their chances of achieving higher profitability tremendously increases. In order to beat the competition prevailing in the market, is primary important for any business entity to come up with unique idea that keep their products, process or services fresh.
In the given case, Mr. Green has figured out there is a constant decrease in their overall sales because of change in customer taste and preferences. However in order to deal with such situation he needs to do innovation in their product line. As a result, he decided to launch some new flavors of juices, drinks and smoothies. Earlier the company was deals in selling only one healthy juice but now they have decides to offer multiple option to customer that too made up with organic ingredients. This also assist them in attracting large number of customer and as a result their overall profitability and sales increases (Boudreau and Lakhani, 2013). Some of the advantage of innovation are discussed below:
1. Help in building brand image
2. Help in gaining high competitive advantage in the Marketplace
3. Satisfy diverse needs and wants of customer in an effective and efficient manner
4. Increase in sale figures
5. Overall performance and productivity of a company increases
Difference between innovation and invention
It is concerned with novelty and modernization
It deals with creating something exceptionally new in the market
It refers to a modern idea that can applied to existing situation prevailing in the company.
Invention can only be assessed by target customers.
It is an alliance of different product, services or process.
Invention deals with single product or process.
It requires managerial and technical skills
It entails scientific skills
P2 How company’s vision, leadership and culture can shape Innovation and Commercialization
Vision: The Vision Statement of Mr. Green Healthier Drink is “To deliver high quality product or services to customers that creates value for them or for which they are willing to pay” As per their vision statement, the company has decided to launch new variants in their drinks, juices that effectively satisfies customer needs and wants (Drucker, 2014). In modern era, where nothing is constant not even the likes of customers, it becomes primarily important for company to determine actual needs and wants of potential buyers and provide goods and services accordingly.
Leadership: Earlier, company was following autocratic style of leadership. But now they have embed participative leadership style. As the company is going through major downfall, it is important for them to survive themselves in the marketplace. This can only become possible if their employees work incredibly hard and for this company needs to make them feel valued and important. They can involve them in their decision making process. Arrange training programs for them which keep them motivated and retain them for longer periods.
Culture and teamwork: The Company is run by Mr. Green and he solely takes all decision and responsibilities. Sometimes his decision are so authoritative that employee’s needs to follow it event they are not willing to accept it. Therefore, he is required to promote open and healthy culture where each and every employees gets equal opportunity to grow and develop themselves both personally and professionally.
P3 Explain the 4P’s of Innovation
The model of Innovation mix was proposed by Joe Tidd and John Bessant. With the help of this tool, company can discover what the process of innovation can improve and brings to business. The innovation mix includes product, process, position and paradigm. Organization use this tool in order to understand how they can innovative so as to enhance their product, process, paradigm and position.
Product: This innovation is relate with how a product or services offered by firm can be improved in order to make it more appealing and better than other competitor’s products. It means adding extra features in existing product or launch completely new product in the marketplace. For example: Mr. Green wants to bring innovation in their product line by entering into different segments such as juice, smoothies. Earlier he was only selling one drink i.e. healthy milkshake but now he is planning to launch Grape Lemonade made with real Grape fruit and some flavors of smoothies as well.
Position: This innovation P is deals with how innovative products or services are going to communicated or framed among target customers. This is mainly associated with a change in terms of how a particular product is perceived and used by potential buyers. Form position means making customer visualizing that the company deals in selling healthy products made up of organic ingredients (Goldberg, 2013).
Process: It include the changes and ways in which goods or services are created or delivered. It not only covers product preparation steps but also include workflow, hiring people, training etc. and state the reason how all these factors can enhance company’s profit.
Paradigm: It is related with changing the way of doing business. The change could be radical or incremental. For example: Earlier Mr. Green was promoting their products through print media but now they are taking the advantage of using social media websites as well. Radical shift from print to digital media (Huizingh, 2011).
From all the above factors it can interpreted that Mr. Green needs to product innovation. Being a UK based firm, the company can easily take the benefit of Grapes that has been mostly liked by all British People. This is the main reason why the company has come up with Grape Lemonade.
Innovation Funnel: It includes series of steps that is required in order to develop a product or process. The main objective of innovation funnel is to create such goods or services that fulfil diverse needs and wants of target customer in a manufacturable form.
Use of Innovation Funnel: Organization use innovation funnel so as to convert an idea into specific product that meet customer requirement in an effective and efficient manner. When company innovate, it is important to figure out market trend first and then do innovation accordingly. There are ample number of opportunities exist in the market, only marketer knows how to exploit it effectively. It aid in identifying current expectation of target customer and how firm can fulfil it properly.
P4 Describe the developments in Frugal Innovation
Frugal Innovation: It refers to the process of reducing the complexities and cost of goods sold and its production. Basically it means discover new business model, redesign products or services, reconfigured value chain in a sustainable and scalable manner. It render functional solutions through few and effective resources. There are large number of resources available in the market, it is the duty of innovator to critically exploit each resources and consider them as an opportunity instead of treating them as liability. With the help of this innovation, entrepreneurs tries to fulfill local needs in a cost effective and timely manner. Stages of frugal innovation are discussed below:
Find opportunity in adversity: This is the first stage at which innovator reframe the current problem prevailing in the work surrounding. For example: In the given case study, Mr. Green has experienced a major downfall in their sales because of rapid change in customer taste and preferences. As the company only deals in selling one healthy drink to customers which is not sufficient to attract maximum consumer. Now a days everyone wants variety and by selling only one healthy drink, company cannot sustain in market for longer period. Therefore, Mr. Green has decided to launch new flavors that instantly attract maximum consumers such as Grape Lemonade made up of actual real grapefruit. In addition to that they also launch different flavors of smoothies and juices as well.
Do more with less: This is the second stage, where innovators is require to assess the available resources first and tries to utilize it in an optimum and efficient manner.
Think and act flexible: At this stage, it is important to be improvisational rather than being rigid.
Keep it simple: It has been believed that any complexity may cause disruption in overall functioning and operation of the company. Therefore it is always to better to have few choices that are actually good instead of having number of choice which may cause confusion or distraction (Jain and et. al., 2013).
Include the margin: Needs and wants of customer are changing every day. Therefore it is important to determine what are the current likes and dislikes of potential buyer so that company can make product accordingly and satisfy their diverse requirement in an effective and efficient manner. After launching number of variants, Mr. Green can start taking feedback from customer so to figure out whether they are liking his innovation or not.
P5 Importance of Commercial funnel and application of new product development
Commercial Funnel: It is a cost effective that is mainly used by organizations in order to determine various sources that assist them in offering innovative goods or services to customers in a structured manner. Innovators needs to select appropriate channel of distribution so that they can easily yield higher profits and revenues. In the given case, Mr. Green has decided to expand its product line by entering into different segments such as juices, smoothies, drink etc. The main reason behind this is the major downfall in their sales due to rapid change in customer taste’s and preferences (Jiménez-Jiménez and Sanz-Valle, 2011). He has decided to launch Grape Fruit Juice, Grape Fruit Lemonade and many more flavors that is made up of organic fruits. With the help of this funnel, they can easily launch their product in their market and gain high competitive edge over their rivals. But for launching new product in the market, the company needs to undergo the process of new product development. Discussed below are application of new product development:
Idea Generation: This is the first stage where idea is actually originated. There are multiple sources of Idea. Every company deals with plethora of Idea.
Idea screening: As the First Stage deals with plethora of ideas generation, the second stage deals with selecting the best among them. Among the multiple ideas, which are actually best and practically feasible. So the company needs to select those ideas and eliminate the remaining.
Concept testing and development: This is the third stage where company choose some customer from target group and make them experience the new product or service. Basically at this stage, some of the selected customer are selected by firm so that they can try or test their innovative product on them. Information provided to them will assist them in visualizing the innovative product. Their feedback plays important role here. As the success of innovative product is totally depend upon whether customer like their product or not. With the help of the stage, Mr. Green can easily determine whethercustomer will like the new variants introducedhim or not.
Market development and strategy: Once the company is done with testing their product on selected range of customer and attaining positive result from them, the role of manager is to frame effective strategies for launching their product in the market. This help them in gaining high competitive advantage over their rivals. Along with this, profitability associated with innovative product is also anticipated at this stage along with branding and marketing mix strategies.
Analysis of Business and financials: At this stage manager compare the actual sales of innovative product with the predefined one. This help in identifying weather customer are liking their product or not.
Commercialization: This is the last stage where company actually launch its innovative product in the Marketplace (Rosenbusch, Brinckmann and Bausch, 2011).
P6 Business Case for Mr. Green
Companies use Business Case so as to identify the risk related with investing in innovation. It is important for an innovator to examine each and every aspect associated with innovation before launching new product or service in the market. It includes:
The Need: This stage define the need for innovation in company. It state the actual reason why business wants to do innovation in their product. This can only be possible if they are aware with the current issue or problem prevailing in the work environment. For example: Mr. Green have analyzed that there is continuous decline in their sales because of rapid change in taste and preferences of customers. In order to overcome such situation, Mr. Green to find a solution that help in increasing their sales and as a result overall profitability of the company increases (Strayer, 2012).
Your solution: Once the company is done with identifying what is the need for innovation the next step is to find best possible solution for it. In the given case, after knowing the reason for decline in sales, Mr. Green has decided to launch new variants of juices, drinks and smoothies in the market. Nowadays demand for juice rapidly increasing. Taking the advantage of this the company has decided to innovation in their product.
Why it is Innovative: In order to attain high competitiveness level in the market, the solution find by the company must be innovative. For example: The company is launching first Grapefruit lemonade made up with real grapefruit. Mr. Green knows that British people often like Grapes so taking the advantage of this he decided to introduce maximum flavors in Grapes.
Customer research: Before launching product in the market, it is important to identify what are current likes and dislikes of customer so that company can innovate accordingly. Research can be conducted through survey, interview, focus group and questionnaire.
Investment requirement: At this stage, company evaluate various sources through which they can easily get sufficient amount of fund that help in their innovation. There are two sources of funding one is internal and other is external. Internal means when adequate funds are available within the company only such as retained earnings, reserves, profits, long term assets that are no longer in use etc. On the contrary, external sources means arranging funds from outside the company such as angel investors, bank, creditors, individualdonor etc.
Expected benefit: At this stage, innovator identify the impact of innovation on society and its member.
The Ask: This is the last stage, where company take feedback and suggestion from customers after implementing innovation. This stage help the company in knowing whether customer has like their product or not (Wolin, 2016).
P7 State different intellectual property tools that help in protecting and retaining intellectual property
Intellectual property rights are mainly use by creator or inventor for protecting and retaining their discovery. It means giving exclusive right to the owner for their innovative work or idea. With the help of these rights, innovator can gain recognition and monetary benefit for their innovation or invention. Some of the common intellectual property tools are:
Copyright: This tool gives exclusive rights to the owner for their literary, artistic, dramatic or musical work. With the help of this tool, creator gets the rights to copy, perform or display. No third person is liable to use their work without their consent.
Trademark: It is mainly in the form of symbol, design, word or phrase. This tool is often used by companies so as to distinguish its products from that of competitors (Wilson, 2014). The selected word, mark or sign must be distinctive. The main objective of using this right is create brand image in the minds of target customer so that they can easily compare their products with that of rivalry firms.
Patent: These rights are generally given to person for their discovery or invention. With the help of this tool, patent holder can eliminate other from using or selling their invention without their consent (Huizingh, 2011).
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According to the above mentioned report it can be concluded that in order to sustain in market it is chiefly important for any company to do innovation as per the requirement of market and customers. Needs and wants of customers are changing rapidly and companies are required to fulfil it by providing them goods or services according to their diverse requirement. There are various techniques through which an innovation can takes place like 4P’s of innovation, frugal innovation etc. Along with this there are different intellectual property tools that help innovator in protecting their discoveries or invention.
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