Innovation and Commercialisation - Essence Drinks.

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Contents:

Innovation and Commercialisation - Essence Drinks..................................................................1

Contents:......................................................................................................................................2
Introduction:................................................................................................................................3
PART A:......................................................................................................................................3
LO1: Explain the context for innovation and determine the difference between invention and
innovation:...................................................................................................................................3
1.1: Explanation of the difference between invention and innovation (P1):...............................3
1.2: Importance of Innovation to organisations (P1):..................................................................3
1.3: Use of innovation within the organisational leadership and culture at Essence Drinks
(P2):.............................................................................................................................................4
LO2: Explain the different types of innovation:..........................................................................4
2.1: The 4P’s of innovation and the type of innovation that can be used by Essence Drink (P3):
.....................................................................................................................................................4
LO3: Discuss the process required to commercialise innovation:...............................................5
3.1: Approaches that can be taken by Essence Drinks to process innovation (P3):....................5
3.2: Innovation Funnel and Frugal Innovation (P4):...................................................................6
3.3: Steps to be taken by Essence Drink in order to derive a new and innovative drink (P5):....7
Conclusion:..................................................................................................................................8
References:..................................................................................................................................9

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Introduction:
The below report provides a detailed information on how Innovation is important for new
businesses like Essence Drinks which can help it to establish a strong and competitive position in
the market. A detailed difference between Innovation and Invention is explained, followed by the
importance of innovation for organisations. The 4Ps of innovation are explained in the context of
Essence Drinks and the clear steps that can be used by the organisation to implement the
innovations proposed.
PART A:
LO1: Explain the context for innovation and determine the difference between invention
and innovation:

1.1: Explanation of the difference between invention and innovation (P1):

The terms invention and innovation complement each other in many aspects. Every item that is
invented would need innovation after a certain period of time. The key difference between
invention and innovation is as below (Lopez-Claros, 2010):
Invention: Invention is when a totally new product or item is introduced by the organisation. It
refers to the production of an item or idea that has never been initiated before. It is original and
majorly depends on the theories and other learning documents. In order to make an invention,
scientific skills are required by the individuals. This happens when a new idea strikes the mind of
an individual (scientist). Invention is usually concerned with a single product or process. In case
of an organisation, the invention of products and services is majorly undertaken by the R&D
department.
Innovation: Innovation is when an idea is implemented to improvise the performance of a
product which is already invented. It refers to implementation of ideas to the product and process
for the very first time. Innovation means adding value to something which already exists.
Theoretical aspect is used less in case of innovation, majorly practical implementation is done to
create innovation to the existing products. Skills required in case of innovations are technical,
strategical and marketing skills. Innovation happens when an existing product requires an
improvisation and modifications in order to give better outputs. It can be concerned with single
product or process or even a range of product and process. In an organisation, innovation is
widespread across all the process concerned in the business development.
1.2: Importance of Innovation to organisations (P1):
Today’s business atmosphere is unpredictable and full of competition. The organisations that is
able to see and act upon the opportunities available, helps them to stay strong in this kind of
competitive environment. Bringing changes (positive) in the business activities through
innovations can help business to achieve the height it is aiming for. Innovations benefit
organisation in many ways which are – Engaging the manpower to come up with new ideas and
empowering them as the most important source of the business. Innovation helps in increasing
the rate of interest to the shareholders. Innovation helps in achieving the business goals and
improving the current situations in order to achieve the objectives determined by the
organisation. It makes the business plans and activities attractive for the shareholders, new

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acquisitions and mergers. It helps increase profitability by making the production process more
efficient. Innovations are secretive; hence, it helps in competing with the competitors and
increases the market shares and product lifecycles (International Development Research Centre
(Canada), Organisation for Economic Co-operation and Development, 2010).
1.3: Use of innovation within the organisational leadership and culture at Essence Drinks
(P2):
Organisational leadership and culture of Essence Drinks can be highly benefitted by the attitude
of innovation acquired. Innovative leadership and culture would help Essence Drinks in the
below ways;
Vision of the future: The innovative leadership and culture would help Essence Drinks to plan a
clear vision that it want to achieve. Leaders with innovative attitude would make changes to the
current business activities which would be beneficial for the business growth.
Mission of the organisation: Essence Drinks could achieve growth in the initial days, however,
later the growth declined. The major reason behind this is the lack of innovation in order to
achieve the mission of the business. New innovations in the formula of the drinks and the
marketing strategies if adopted by the leaders can help in the growth of the business.
Culture: Innovative leaders are the core source of innovative culture within the organisation.
Motivating employees to come up with innovative ideas in order to grow business returns can
change the entire culture of the organisation as innovative and creative.
Teamwork: Innovations are possible with a great teamwork among all the departments of the
organisation. Innovative leaders usually divide employees into teams and ask them to come up
with unique ideas for business growth. Essence Drinks can undertake this strategy and get huge
response from the employees.
LO2: Explain the different types of innovation:
2.1: The 4P’s of innovation and the type of innovation that can be used by Essence Drink
(P3):
The 4Ps of innovation: The 4Ps or innovation mix was introduced by John Bessant and Joe
Tidd. This tool helps the organisations to understand about which innovation process can bring
improvement in the business. The elements of 4Ps are as below (French, 2017);
Paradigm: This means basically framing the planned innovation and estimating about the
achievements it can gain for the business. Not all the changes initiated can be beneficial for the
business. Hence, it’s very important for organisations to initiate innovation by seeing the same
thing in a different way. In case of Essence Drinks, rather than considering the organisation as a
soft drink producer, innovation can be in considering Essence Drinks as a soft drink producer
which uses disposable eco-friendly cans.
Product: Improvisation in the product and services is the other form of innovation introduced.
This can include a small change or a major change in the product that the company is dealing
with. Essence Drinks is presently dealing only with one product – (healthy mango lassi) which is
decreasing the business scope. Coming up with more flavours in the same product or introducing

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different flavoured juices etc can act as innovations which would gain good exposure to the
business.
Process: This includes consideration of all the process involved in the business, right from the
process of production to hiring people, workflow, supply, training and so on. Coming up with
bright and attractive packages can help Essence Drink to gain more customer attention. Training
employees, enforcing more manpower, etc would help in efficient production.
Position: This estimates the position of the product in the market and makes necessary
innovations in order to increase sales. In case of Essence Drinks, targeting customers depending
on the age and gender would help more to gain public appreciations. Coming up with diet drinks
for health conscious, chocolate flavoured drinks for kids, concentrated drinks for adults, etc can
help in gaining firm position in the market.
Four P’s of Innovation

Figure 1: Adapted from (Bessant, 2017)

LO3: Discuss the process required to commercialise innovation:
3.1: Approaches that can be taken by Essence Drinks to process innovation (P3):
There are many processes that can be taken by Essence Drinks in order to implement innovation
within the business activities (Akintola Akintoye, 2012).
Assess the competition: Essence Drinks can find out who the competitors are, study their
business strategy, understand the reason behind their development and come up with innovations
that would increase business growth and profits.
Study market and industry trends: Market trends changes as per the preference of the
customers. The idea of healthy mango lassi was innovative initially, however, once it became
prominent in the market, the demand decreased automatically. Analysing the present taste and
trends would create more business opportunities for Essence Drinks.

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Building relation with customers: Essence Drinks can undertake campaigns or promotional
activities where it can get into direct conversation with the customers. Getting into social media
trends would also help to understand what the customers are exactly looking for. This would help
in making necessary changes to business activities as per customer’s preferences.
3.2: Innovation Funnel and Frugal Innovation (P4):
Innovation Funnel:
The model of Innovation Funnel is used by many business organisations in order to manage the
process of new product development easily and effectively. This is nothing but a complete
process which starts from the innovation of ideas by the R&D department, the examination of
ideas which are then shaped and conceptualised and lastly launched after proper testing and
examination (Henry Chesbrough, 2014).
The main parts of Innovation funnel are as below in the context of Essence Drinks:
Opportunity Assessment: Essence Drink can analyse and study the complete market data,
information on customer preferences and other information sources which care important to
understand the available opportunities for the new products or innovations lined up.
Insights-based ideation: Essence Drinks can ideate different types of products or offerings that
can create opportunity in the market. In order to understand this various attempts can be done by
conducting surveys, online communities, focus groups, and so on. This would help the business
to understand the exact nature and need of the targeted market.
Conceptualisation: At this stage the team of Essence Drink would come up with the concepts to
initiate the ideations received from the above step. This can include the advertising strategies,
product features, and packaging ideas and so on.
Testing: Essence Drinks can get into testing process by providing free samples to the targeted
market and taking feedback from the customers. Required changes can be done as per the
feedback if any.
Go/No Go: At this stage Essence Drinks depending on all the factors i.e., the testing results, the
cost of production, the average profit margin, cost of marketing and so on can decide whether to
launch or not launch the product.
Launch: Once all the factors are fine Essence Drinks can take the decision of launching the
product in the market.
Frugal Innovation:
This type of innovation considers the limitations in the resources available which can be
financial or material or institutional. The main objective of Frugal Innovation is to turn these
limitations into advantage for the business (Aditi Ramdorai, 2015).
In order to undertake Frugal Innovation, Essence Drinks can take initiatives to produce products
that need less cost. This would make the final product price less and hence would gain more
customer attention. In order to initiate frugal innovation, organisation needs to understand that
quality cannot be compromised in the attempt of reducing the cost of the product.

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3.3: Steps to be taken by Essence Drink in order to derive a new and innovative drink (P5):
Essence Drinks can take the below steps in order to derive New Product Development
(innovative drink) in the market (Brands, 2013):
Idea Generation: This is the first step that should be taken by the R&D team of Essence Drink
after evaluating various sources like – internal sources, market research, customer’s preference,
competitors, SWOT analysis and so on.
Idea Screening: Not all ideas can yield positive results; hence the R&D team of Essence Drinks
need to screen the initiated ideas by considering the factors like – company’s strengths,
weaknesses, needs, trends, affordability, expected ROI, etc.
Concept Development and Testing: This is the third step of product development. The research
team can create a blueprint of the strategy and ideas proposed which is called as the concept.
Testing is done once the concepts of the products are put in place.
Business Strategy analysis and Development: Once the concept is finalised, Essence Drinks can
decide on marketing and other initiatives that would develop the business outcomes for the
organisation. The Business Strategy can be analysed by taking into considerations various
elements like – Pricing strategies, competition of the product, costs involved, breakeven point,
etc.
Product Development: After putting all the strategies in place, the process of actual product
development is undertaken by Essence Drinks. This time the organisation produces only limited
new products and the branding and other strategies decided earlier are tested and applied
promptly in this stage.
Test Marketing: In this stage the organisation can take actual feedback of the customers and
depending on this further changes can be done to the product as per to make it perfect for
consumer usage. This helps in easy launch of the product.
Commercialisation: Once the product is changed as per the customer reviews during testing, the
next step of Essence Drinks would be to get involved in marketing and commercialisation
activities in order to help the product gain exposure in the market.
Introduction: This is the final step where Essence Drinks would introduce the new, developed
and innovated product in the market.

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 The steps involved in deriving new innovation

Figure 2: Adapted from (Skiba, 2010)

Conclusion:
From the above report, the need of innovation for the business development can be assessed.
Essence Drinks being a new business entrant needs to come up with various innovation strategies
in order to get its products the appreciation that it is looking for. It can follow the above steps
mentioned which would help it to initiate the innovation ideas efficiently.

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References:

Aditi Ramdorai, C.H., 2015. Frugal Innovation in Healthcare: How Targeting Low-Income
Markets Leads to Disruptive Innovation. illustrated ed. Hamburg: Springer.
Akintola Akintoye, J.G.G.Z., 2012. Construction Innovation and Process Improvement.
illustrated ed. New Jersey: John Wiley & Sons.
Bessant, J., 2017. Riding the Innovation Wave: Learning to Create Value from Ideas. Bingley:
Emerald Group Publishing.
Brands, R., 2013. http://www.innovationcoach.com. [Online] Available at:
http://www.innovationcoach.com/2013/05/8-step-process-perfects-product-development/
[Accessed Monday May 2018].
French, J., 2017. Social Marketing and Public Health. illustrated ed. Oxford: Oxford University
Press.
Henry Chesbrough, W.V.J.W., 2014. New Frontiers in Open Innovation. Oxford: OUP Oxford.
International Development Research Centre (Canada), Organisation for Economic Co-operation
and Development, 2010. Innovation and the Development Agenda. New Jersey: IDRC.
Lopez-Claros, A., 2010. The Innovation for Development Report 2010-2011: Innovation as a
Driver of Productivity and Economic Growth. illustrated ed. Hamburg: Springer.
Skiba, F., 2010. Service Users as Sources for Innovation: An Empirical Study in the German
Services Industry. Frankfurt: BoD – Books on Demand.