BMP6002 Innovation Level 7


Innovation means converting an idea into a solution that adds value from a customer point of view. It generally refers to the process creating more effective product, services or workflows. In terms of business, it deals with improving existing services, creating dynamic products or executing new ideas (Baldwin and Von Hippel, 2011). It can act as catalyst for organisational growth and success. Being innovative does not simply means inventing. It is more related with changing business model or adapting to changes so as to deliver better product or services to target audience. The chosen company for this report is Essence Drink which provides mango flavoured drink to consumer. The company has now decided to launch another drink called as “Lassi” in mango flavour. The given report talks about the concept of innovation in detail, application to new product development, intellectual property rights used to retain property and significance of commercial funnel.

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Task 1

P1 Explain the term “Innovation” and its importance in comparison with invention

Innovation refers to the process of creating and modifying existing product with new additional features or attributes so that they can perform more effectively. The concept of innovation is important for every company as it enable them to present their product or services in the market in more better way that will brings development and growth in particular company. For business, it can be defined as improving product, services or workflows so as to gain high competitive edge in the marketplace over rivals. It often seen as application that provide better solution to unarticulated needs, existing market needs or new requirement. Such innovation usually takes place through the provision of more-effective processes, services, technologies, business models or products that are made available to society, government and markets. Innovation considers as an in-built part of business strategy that assist in their future growth and development. With the help of this, entities are able to gain high efficiency and effectiveness in their procedures that they are mainly using for meeting customer requirement or demands. The activities related with innovation includes alteration, modification or imagination of old product or services in new form (Boudreau and Lakhani, 2013).

Essence Drink has also taken into account various innovative techniques in order to develop their product or services in the market. There are several ways through which company can innovate its product that automatically attracts large number of buyers towards them and as a result their profitability increases. But before innovation, it become primary important for the organisation to determine needs and wants of target audience so that they can transform or modify their product accordingly. For example: Essence Drink has decided to launch “Lassi” in mango flavour. So they are require to collect information related with customer point of view regarding mango flavoured Lassi (Goldberg, 2013). If they get positive response from consumers then they can immediately start its innovation process. Following are some of the importance of innovation:

  1. With the help of Innovation, Essence Drink can formulate effective strategies for seizing the attention of target audience.
  2. Through this, revenue and income can be generated systematically.
  3. Through the concept of innovation, Essence Drink can gain high competitive edge in the market place over others competitors.
  4. It help in conducting organisational activities in more effective manner so that they can easily accomplish business objectives and goals.

Difference between innovation and invention



Innovation is related with improving existing product by adding new features in it.

Innovation may be new or fresh to the organisation or industry but not new to the world.

Innovation deals with commercialization and novelty.

Innovation can be defined as a modern idea which can be applied to the current situation.

Invention means introduction of goods or services in the market for the first time.

Invention is something new and the world is yet not aware of that.

Invention deals with creating something extremely new.

Invention is practical and can be felt by people.

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

Business Innovation is related with creating more effective product, services, workflows or processes. Innovation works as a catalyst for the growth and development of particular company. Being innovation does not simply means inventing (Drucker, 2014). It is more related with changing business model or adapting themselves according to market environment in order to deliver better product or services to customers. Innovation tend to raise the probability of business succeeding. Moreover it has been figured out that businesses who often innovate develops more efficient work processes and have better performance and productivity over its rivals. The concept of Innovation usually undertaken by firms when they want to gain high competitive edge in the market. They need to shape organisational vision, goals, mission, team work according to the Innovation. The primary responsibility of managers is to motivate workers for taking measures in terms of improving their performance. Also they are require to link vision, mission and its culture with innovation process. Essence Drink has set their goals and mission according to its latest innovation which are discussed below:

  • Vision: It can be described as the long term goal of the organisation that has mainly been set by its management at time when business is originated. Vision of Essence Drink is to become best soft drink manufacturing company all across the globe. If they follow their vision systematically then will be able the capture large market share.
  • Mission: Mission is related with short-term goal that keeps on changing with passage of time. Companies need to achieve their short-term gaols first so as to accomplish long term objectives. Here the mission statement of Essence Drink to provide quality and healthy drink to consumers. The company needs to ensure that all their aims and targets much achieve within their stipulated time period.
  • Leadership: For the successful implementation of commercialisation and innovation in organisation, it is primary important to appoint good manager first who motivates the workers to perform or act accordingly. Leadership style also plays key role in motivating and inspiring employees to work more effectively (Goldberg, 2013). For example: Essence Drink follows participative leadership style in which they involve workers in their decision making process. When they decided to launch mango flavoured Lassi they initially try it on their personnel and ask suggestion and feedback from them.
  • Culture: Culture plays key role at the time of introducing something new within the company. It also assist in encouraging workers and their working style also. There are several activities that is related with innovation that needs to be taken into account by manager very promptly.

Task 2

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

The concept of Innovation was proposed by Joe Tidd and John Bessant. The main reason behind developing this framework is to figure out which part of the business requires modification or innovation (Huizingh, 2011). It is better to make changes as per the market trend so that customer needs and wants can be fulfilled in an effective and efficient manner. In addition to that, this concept also assist in determining whether the innovation made by the business entity will be successful or not. Essence Drink is going to this framework so as to analyse whether its innovation will be acceptable by consumers or not. Innovation mix covers:

  1. Product Innovation: It defines the changes or modification introduced in product which an organisation offers. This innovation is related with how to make company's product more attractive or appealing. The suggestion include the ways in which company is going to make its product better known as incremental changes. For example: Essence Drink is doing product innovation by launching “Lassi” in mango flavour.
  2. Process Innovation: Innovation also play key role in improving existing workflow or business process. Process defines the way through which goods are created or delivered. This deals with how can company enhance or change its workflow, supplying, hiring, manufacturing so that its profits can improved accordingly. For example: Essence Drink is changing its promotion process so this time they have decided to promote through social media only.
  3. Position Innovation: This innovation deals with re-positioning the perception of already established product in particular context. Earlier Essence Drink only deals in selling mango drink which is a kind of refreshment drink but now they have entered in selling milk product as well (Kline and Rosenberg, 2010). The company has decided to launch mango flavoured Lassi for the first time.
  4. Paradigm Innovation: This innovation is related to the mental model which shape what an organisation is about. It means using the concept of innovation how business can improve. The change occurred can be positive or negative. But it is always recommended to consider change as a positive process.

Innovation Funnel is a type of funnel that has been undertaken by most of the companies for investigating the ideas that are mainly present in business and selecting best out of them. It plays key role in every organisation and enable business owners to choose the best and the most profitable idea (Leonard and Rayport, 2011). Since there are several ideas that are generated in the firm and its important to select the best among them. This is the reason when Innovation Funnel is taken into account. Process of Innovation Funnel includes:

  • All generated ideas entered in refinery system tool
  • Only those ideas will be selected or taken into account who matched with objectives and goals of the company.
  • Lastly the idea that has been selected is being refined.

Illustration 1: Innovation Funnel
(Source: Innovation Funnel, 2017)

P4 Explain development in frugal innovation

Frugal Innovation is a method of innovating product or services along with reducing the complexities related with its price. These are usually undertaken by businesses so as to change consumer perceptive. Such types of innovation are environment friendly and cost related to its is low as compared to others. The innovation that has been perceive by Essence Drink can be referred as Frugal Innovation as they emphasize on making new product by using lest resources and they are also going to sell it on relatively low prices (Lundvall, 2010). There are several other companies who have introduced product through frugal innovation such as Haier Washing Machine, Toyota Charcoal Stove in Ghana, TATA Nano car in India, the Mini Magical Child” in China and Wonder bag in South Africa etc.

There are certain factors that is directly related with development and growth in frugal innovation which are discussed below:

Less Cost Production: In Frugal Innovation, products are normally being produced with very limited resources and it further sold out at low prices. For example: A Refrigerator was developed who work even without electricity so it can place or kept anywhere.

Developing reasonable and long-lasting goods: Products or services developed under frugal innovation remains long lasting. This is mainly because they have generated it systematically which ultimately increases its tendency to stay for longer duration as compared to other product (Sawyer, 2011). In addition to that, with the help of this innovation Essence Drink can easily gain high competitive edge in the market.

Different features of current produced products: Essence drink needs to add some extra features in their innovative product so to seize the attention of customers and makes them unique. We have heard about Lassi but never heard about flavoured Lassi and that too mango flavour.

Developing innovative products: For developing standard quality product, Essence Drink needs to introduce several innovative methods and tries to carried out in structured and through manner.

Task 3

P5 Importance of commercial funnel and application of New Product Development

Commercial Funnel is mostly used by business enterprise for making their innovative product successful in the marketplace. The process begins with screening of idea and finishes till the idea is finally implemented. With the help of commercialisation, firms will get the opportunity to introduce or launch product at larger level and this also help in generating more profits and capturing the market share of other international countries. But for this, management needs to ensure standard quality as well (Stokes, 2011). Thus, Commercial Funnel is used by companies in order to increase their profitability ratio and increase market share as well. Here the main objective is to provide valuable product or services to customer and that too in an effective manner. The application of new product consist of series of steps that are discussed below:

Generating Ideas: At this stage, idea emerges. Essence Drink came up with an idea to produce flavoured Lassi in the market and have decided to serve with potato balls and wedges. They believes that the hot and cold combination will be loved by its target audience and will sustain in market for longer time frame.

Screening of Idea: At this, various ideas that has been generated in the company is critically evaluated and company will select best among them.

Testing the concept: At this stage, Essence Drink will try its innovative product first on their employee's so as to know their reaction or response towards their product.

Business analysis: At this stage, manager of food department in Essence Drink will figure out the results obtained from sample testing (Tebbe, 2011). On the basis of that they will interpret whether the product will be accepted b consumers in the market or not.

Product development: This stage deals with identifying the need of consumer for that particular product and end with providing it as per their demand and wants.

Commercialise: At this stage, result of test marketing is taken into account and strategies are made accordingly.

Product Launch: At this stage, product is finally launched in the market.

P6 Build an Innovation Case

Business Case are used by organisation so as to identify they risk related with investing or spending in innovation. It also ensure that company must think logically regarding each aspect related with innovation process. In the given report, Essence Drink has decided to introduce Lassi in mango flavour. There are series of steps included in building innovation case which are mentioned below:

Executive Summary: This part normally comes at the end of business case as it normally gives the snapshot or blueprint of entire business case.

The Need: At this stage, company requires to identify the actual need for innovation. This can only be possible if company is aware about its problem or issues. For example: Essential Drink realises that they lack in getting the attention of customers very easily. So they have decided to be in touch with them through social media platform (Teece, 2010). This gives wider scope to increase the reach of its product.

Your Solution: The solution generated by company must meet the requirement and needs of customers in an effective and efficient manner. For its innovative product the company has decided to promote it on social media platform first.

Why it is Innovative: This represents the reason for which product is innovative in the market over its rivals. Here the drink launch by Essence Drink is innovative in context of mango flavoured Lassi for the first time.

Investment Requirement: There are two sources of investment through which company can arrange adequate funds which is required to carried out operations smoothly.

  • Internal Sources: Such sources are available within the organisation only. For example: Profit, retained earning can be used for further expansion of business (Stroke, 2014).
  • External Sources: Such sources are available outside the business that help company in managing its day to day operation. It includes: creditors, banks, investors, individual donation.

Expected Benefit: This stage measure the impact of innovation on consumer, society and environment.

The Ask: At this, feedback is collected from customer interpreting their views or suggestion regarding particular product.

Task 4

P7 Evaluate different tools used to retain and protect intellectual property

Intellectual Property Rights are like any other property rights. They allow owner or creator of trademarks, patents or copyrighted works to get benefit from their own investment or work in a creation. Their main purpose is to promote the creation of large variety of intellectual goods. To accomplish this, the law gives certain property rights to people and businesses so that they can further use their own creation or allow others to use their work on their behalf. Mentioned below are some of intellectual property rights tool and its significance:

Patent: Patent grant can be given to owner for its invention. It gives exclusive rights to patent holder to exclude others from selling, making or using their creation or invention. There are three types of patents that is exist in marketplace namely design, patent and plant. It gives protection to patent owner for their creation i.e. any other person cannot commercially used , distribute or sold patent invention without its consent (Treece, 2014). Patent gives rights to patent holder for deciding to whom they want to use their invention.

Copyright: Copyrights is given to owner for its literary work, artistic work, music, sculptural, sound recording ad graphic works. With this intellectual property right tool, holder gets exclusive rights to distribute, create, perform, copy or display the work. Copyright rights exist from the moment when the work gets created.

Trademarks: Trademark is often by company's so as to distinguish its product or services from that of competitors. It can be in the form of word, symbol, phrase or design. The mark chosen by organisation must be distinctive from its rivals (Sawyer, 2016). With the help of this intellectual tool it become much easier for consumer to identify and purchase a good or services on the basis of its specific quality and characteristics as indicated by its unique trademark. Trademarks ensures that creator of marks have exclusive rights to use their products or allow others to use it in return for payment.

Trade Secrets: It is a process, device, formula or other business information that business entities keeps private from that of competitors so as to gain business advantage. With the help of this intellectual rights company can protect their products or ideas from competitors. It is the best way to gain high competitive edge in the market over rivals.


From the above mentioned report it can be conclude that innovation plays key role in organisational success and growth. As customer needs changes frequently it become chiefly important for entities to innovate their product so as to fulfil their needs and wants in an effective manner. There are various tool that has been discussed in this report such as innovation mix, frugal innovation, application of new product development which makes easier for companies to launch its product systematically.


  • Baldwin, C. and Von Hippel, E., 2011. Modeling a paradigm shift: From producer innovation to user and open collaborative innovation. Organization Science. 22(6). pp.1399-1417.
  • Boudreau, K.J. and Lakhani, K.R., 2013. Using the crowd as an innovation partner.Harvard business review. 91(4). pp.60-9.
  • Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
  • Goldberg, D. E., 2013. The design of innovation: Lessons from and for competent genetic algorithms (Vol. 7). Springer Science & Business Media.
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