Innovation and its Importance to Firm

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TASK 1

P1 Innovation and its importance to firm as compared to invention

Innovation is defined is the concept which deals with transformation of a new idea into valuable goods or services for which consumers are willing to pay. For bringing any kind of innovation, a good idea is required. So, it is crucial for an entrepreneur or an individual to constantly come up with ideas & creative ways of doing things in distinct manner. Introduction of innovation within business organisation provides it competitive edge in market and firm is enable to take advantage over its competitors. It helps the businesses to make themselves distinct from others. It acts as catalyst for an enterprise in terms of its growth and success. It administers competitiveness to firm to face challenges effectively in today's competitive world.

Innovation & invention are not similar, these are 2 different terms. Invention does not mean to bring innovation in company. It is the procedure of change and its adaptation as per the changing environment. It helps company in offering such services and products that assists in meeting needs and requirements of customers in more better and effective manner (Ariga and et. al., 2013). In business organisations, it must be require by business managers to develop an innovative culture within firm so that skills of manpower can be enhanced and they get opportunity to think outside the box. It assist in increasing their creativity and they enable to deal with issues in more better way and resolve problems effectively. Innovation provides sustainability to business in market so, firms are needed to continuously bring innovation in their products for maintaining its strong position in market. The main key to success of company is an unique idea.

Healthy Juice is a rapidly growing company and earn significant profits in marketplace from last two years. Firm is started with one drink, i.e., healthy milkshake in UK and attain dramatic increase in sales in first year because of their distribution capability and innovative formula. As it enters in third year, a significant decline is seen in its sales as various new competitors have entered in market. As a result, Mr. Green has decided to expand their product line by introducing Black apple juice (Davila, Epstein and Shelton, 2012). The reason behind launching this juice is concern of population of UK regarding their health. People of country are more conscious about their health and in order to take advantage of this, Mr. green decided to launch this drink. It is a healthy juice and is rich in vitamin A and C. This will assist in increasing its profitability of firm and also helps in maintaining its position in market. Some significance of innovation are defined below:

• It helps in increasing sales and profits of company.
• Assists in building strong brand image.
• Provides competitive edge to firm and supports in acquiring large portion of market share.
• Helps in maximizing satisfaction of customers in effective way.

Difference between invention and innovation:

P2 How business vision, culture, leadership and team work can shape innovation and commercialization

• Vision: Vision Statement of Healthy Juice “To become the premier innovator of providing healthy juice and drinks worldwide”. Healthy Juice is a two year old start-up, launched by Mr. Green that only sells a healthy milkshake. However in its initial year, company attain a dramatic increase in its sales. But with the passage of time and entry of new competitors it has become little difficult for them to survive in the market for longer run and that too with serving only one product (Drucker, 2014). As a result, Mr. Green has decided to embed innovation by expanding its product line i.e. introducing new range of juices, drinks and smoothies with different variants. Following its vision statement, Healthy Juice has come up with an idea of providing organic juice of black apple with real pulp.
• Culture: Organizational culture defines the shared values, beliefs and assumption of people that administer the way in which people behave in a company. These shared values has a strong influence on performance and efficiency of employees. In Healthy Juice, all business activities and operations are carried out in a proper manner. By following task culture overall efficiency and productivity of employees increases that gives shape to innovative ideas.
• Leadership:Leaders of Healthy Juice follows autocratic style of leadership which means majority of decision is taken by themselves only. But now they have changed its leadership style to participative or democratic that promotes innovation. As in this style of leadership, each and every employee gets the chance to come up with different ideas and leaders select the best among them. Along with this, leaders also involve its followers in decision making process that makes them feel motivated and valued.
• Team Work: Green believes that any task or work can be achieved in a better manner if it has been carried out by equal efforts and contribution of all employees (Gordon, 2012).Thus, Mr. Green believes in distributing work according to the skills and potential of its workforce which increases that chances of achieving task in a better manner.

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TASK 2

P3 Explain 4P's of innovation and use of innovation funnel

4P's of innovation model was developed by Joe Tidd & Joe Bessant. This framework allow Mr. Green to figure out how the process of innovation bring to businesses and how it improves overall process, models and workflows. The main purpose of this tool is to investigate possible enhancements in each area of business. It include product, position, process and paradigm which are in brief discussed below:

Product: It deals with how existing product or services can be improved so as to satisfy needs and wants of customer in an effective and efficient manner. In other words, it means how to make product or service more appealing and attractive such that it instantly seize the attention of customers or become better than other available goods (Huberman and Miles, 2013). For example: Healthy Juice has decided to expand its product line by introducing juices, smoothies and drinks of different variants/flavours. Mr. Green has launched organic juice made up of black apple with real pulp included in it.

Position: It deals with changing the conditions in which goods and services are framed or communicated among customers. How company can enhance its product image in the eyes of potential buyers, public etc. For example: Mr. Green can start promoting its new product line on various social networking sites by posting the genuine review of customer. In addition to that, they can launch its mobile application as well. As now a days everyone is becoming more health conscious and taking the advantage of this trend, employee's of Healthy Juice come up with an idea of serving Black Apple Juice as it is a low fat tropical fruit and rich in Vitamin A & C.

Process: It means changing the workflow and makes it more effective that leads to generate higher profits for the company. All steps included in preparation process starting from as supplying, hiring people, workflow and training can be improved that leads to raise company's profits. What all latest trend can be used in process such that resources can be utilized optimally and efficiently (Huizingh, 2011). For example: Mr. Green can implant latest technology that assist them in fulfilling all customer requirements in a cost effective and timely manner.

Paradigm: It deals with how with the help of innovation, one can enhance the way in which they do business. This change could be incremental or radical. It basically means trying all possible ways that leverage profits and revenues of the company. For instance: changing the way of promoting goods and services from print to online platforms.

Innovation Funnel and its Usage: It is used to define the series of steps involved in developing a product or process. Their main purpose is to create such products or processes that complete market needs in an economic manner (Jain and et. al., 2013). The goal of any product is to take an idea from concept to reality that mainly fulfils diverse needs and wants of customer in an appropriate way. Basically ideas moves within the funnel and reached to market in the form of end goods and services. Initially there are many ideas that moves in the funnel but with the passage of time it started become narrower i.e. eliminating all irrelevant ideas whose practically ain't possible.

P4 Development in Frugal Innovation

Frugal innovation refers to the procedure of minimising the complexity & cost of good sold and its production. In simple words it means, doing innovation in best possible manner that leads to use business resources in most optimal manner. Following are the six main principles of Frugal Innovation:

• Think and act flexibility: According to this principle, Frugal Innovation requires improvisation instead of forecasting and strategic planning. When thinks go wrong, entrepreneurs adapt and again begin with small budget and taking little risk. Moreover they quickly reboot and correct after facing small failures. When Healthy Juice started facing decrease in its sales, it launch new juice made up of Black Apple which is a low fat juice made naturally with real pulp.
• Keep it simple: Frugal Innovators looks for good enough solution that are made of low tech and are simple to use. Here the key principle is “creative simplicity”.
• Include the margin: The main focus of frugal innovator is to first determine what are the undeserved and unserved needs of market. They are aware of that fact that basic services should be given to each and every individual (Johnston and Marshall, 2016). Providing healthy juice and that too made with tropical fruit enables Mr. Green to gain high competitive edge in the market.
• Follow your heart: According to this principle, Mr. Green neither rely on focus group nor they worry about investors. They only do what their heart says irrespective of thinking about profit and loss.
• Do more with less: According to this principle, it is essential to utilize available resources in an optimal manner rather than seeking for new resources.
• Seek opportunity and adversity: In this principle, current or existing problem is reframe and best possible solution is made for exploiting opportunity in a better manner. For instance: Mr. Green figure out that Healthy Drink is facing tremendous decline in its sales which enable them to expand its product line by introducing new range of drinks, smoothies and juices with various flavours (Leeuwis, 2013).

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TASK 3

P5 Importance of commercial funnel and new product development application

Commercial funnel refers to a visual representation of journey of customer, tracking process of sales from initial awareness of customers to purchase. This process is cost effective through which companies are trying to identify proper sources that facilitates firm in offering innovative goods to customers in effective way. Managers are responsible to determine proper distribution channels that helps in earning high profits.

New product development:

Some steps are involved in new product development process which are defined as follows:

• Idea generation: New ideas are generated in this stage by using various sources. These sources assist in generating ample of ideas.
• Idea screening: Many ideas can be generated but only few of them are useful. In this step, all ideas are screened and their feasibility is checked. Only useful idea is selected and remaining are eliminated (Manso, 2011).
• Concept testing & development: After selecting the best idea, it is tested by developing a prototype of it. In this, idea is converted into concept and developed prototype is tested on small customer's group. Their feedbacks helps firm in taking decision whether to further move with that or not.
• Market strategy development: After getting satisfactory results of concept testing, manager develop various strategies. Various strategies are developed by taking into consideration many factors like branding, profitability etc.
• Business and financial analysis: Sales are measured by manager at this stage with established sales objective. Product viability is checked by them (Schaffers and et. al., 2011).
• Commercialization: Under this stage, firm finally launch its Black apple juice in market.

Related sample:

Managing a Successful Business Project

P6 Build an Innovation Case

Companies build innovation case with an aim of measuring the amount of risk associated with investing in process of innovation. Healthy Drink has decided to expand its product line in order to increase the sales of their products and earn higher profitability ratio. Series of steps involved in building an innovation case are discussed below:

• The Need: Healthy Drink is a two year old venture that offers only one product to its customers i.e. a healthy milkshake. However in its 3^rdyear there was a major down fall in its sale because of entry of new competitors. Thus, the need for embedding innovation arises.
• Your Solution: Green has decided to expand its product line by launching new products like juices, smoothies and drink and that too with different flavours/variants. For example: They come up with selling juice of Black Apple that is rarely available. Since the fruit is rarely found and rich in Vitamin A and C (Stokes, 2011).
• Why it is innovative: It is innovative because the fruit they are using i.e. Black Apple is rarely found in United Kingdom .
• Customer Research: Before implementing innovation, Mr. Green has done a market survey in which they investigate about what are the current likes and dislikes of customer. As a result, they find out that UK people are becoming more health conscious so they need to do innovation accordingly.
• Investment Requirement: At this stage, company needs to find out various sources of funding. Generally 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 profits, retained earnings. External means when funds are collected from outside source such as angel investors, individual donor, bank, creditors (Strayer, 2012).
• Expected Benefit: Here, benefit of innovative product on society and its members are analysed.
• The Ask: Feedback and suggestion from customers are gathered so that Mr. Green can implement embed innovation successfully.

TASK 4

P7 Tools that firm can use to retain and protect knowledge & intellectual property

For protecting invention of an individual, IP rights are given to them. It is an exclusive right provided to the inventor. A kind of recognition is given to an individual for its invention. Some tools are as follows:

Patents: It is a kind of right that is given to person for protecting their invention. By this, owner gets right to restrict others to copy their product without permission. It assists firm in taking high advantage in market.

Trademark: It is a symbol, design or word that is provided to owner in order to make their brand distinctive from others. Healthy drinks use trademark for protecting their brand copying by others. Main reason behind using this IP right is to make product distinctive from competitors (Tebbe, 2011).

Copy right: It is the right given for original music, art, dramatic or literary work. Subsequent utilization can be controlled by a person by getting this right. This protection helps individual to get right related to display, perform, copy, modify etc.

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CONCLUSION

As per the above mentioned report, it has been concluded that innovation is introduced by businesses in order to create more effective product, processes & ideas. In firms, creativity is used in innovation to improve performance of person, process, team or organisation. It helps in increasing profitability of business and leads it towards high growth & success. By using process of innovation, company adds new features in existing products for satisfying needs of customers and provides them some value. Several techniques and tools are utilized by firm which assists in bringing innovation. For understanding and identifying needs of customers in proper way, innovation funnel is used by businesses. In addition to this, IP rights are provided to individuals by government to protect their ownership for their discovery.

REFERENCES

• Amit, R. and Zott, C., 2012. Creating value through business model innovation. MIT Sloan Management Review. 53(3). p.41.
• Ariga, K. and et. al., 2013. Layer-by-layer nanoarchitectonics: invention, innovation, and evolution. Chemistry Letters. 43(1). pp.36-68.
• Davila, T., Epstein, M. and Shelton, R., 2012. Making innovation work: How to manage it, measure it, and profit from it. FT press.
• Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
• Gordon, R.J., 2012. Is US economic growth over? Faltering innovation confronts the six headwinds (No. w18315). National Bureau of Economic Research.
• Huberman, A. M. and Miles, M. B., 2013. Innovation up close: How school improvement works. Springer Science & Business Media.
• Huizingh, E. K., 2011. Open innovation: State of the art and future perspectives. Technovation. 31(1). pp.2-9.
• Jain, A. and et. al., 2013. Commentary: The Materials Project: A materials genome approach to accelerating materials innovation. Apl Materials.
• Johnston, M. W. and Marshall, G. W., 2016. Sales force management: Leadership, innovation, technology. Routledge.
• Leeuwis, C., 2013. Communication for rural innovation: rethinking agricultural extension. John Wiley & Sons.
• Manso, G., 2011. Motivating innovation. The Journal of Finance.
• Schaffers, H. and et. al., 2011, May. Smart cities and the future internet: Towards cooperation frameworks for open innovation. In The future internet assembly (pp. 431-446). Springer, Berlin, Heidelberg.
• Stokes, D. E., 2011. Pasteur's quadrant: Basic science and technological innovation. Brookings Institution Press.
• Strayer, J. F., 2012. How learning in an inverted classroom influences cooperation, innovation and task orientation. Learning environments research. 15(2). pp.171-193.
• Tebbe, J., 2011. Where good ideas come from: The natural history of innovation.

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