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Innovation is necessarily required for every organisation for their sustainability in competitive market for longer period of time. There are different types of organisation such as private, public and voluntary therefore it must essential for all of them to bring innovation in their business operations so as to maximise the level of satisfaction of customers. Innovation not only brings advantage to company in terms of reducing cost of operation but also enhances the standard of living of people through providing them quality products and services at an affordable prices (Bianchi and et. al., 2010)). The present assignment writing report is based on OAK Cash and Carry which is small sized company deals in providing wide range of grocery products. The project describes the important of innovation along with their comparison with invention. Contribution of innovation in achieving mission, vision, and team work are also discussed under this report. 4P’s of innovation and the term Frugal innovations are also mentioned under this report. All other aspects are also briefly explained under this report with the context of OAK Cash and Carry.
P1: Distinguish between innovation and it differentiation with the concept invention
Innovation: It is process of modifying something into new and innovative so that it can bring benefits to company as well as customers. It includes the suggestions and opinions of expert which directs the management to change exiting into better one. Therefore, it is essential for OAK Cash and Carry to adopt new and innovative changes in their internal management so as to enhance the capability and strengths of an organisation. Innovation can be done in different departments so a to bring efficiency in quality of work. Not only company’s performance, innovation makes huge impact on employee’s performance also in form of bringing motivation among them so as to perform well. For example, Launching a new mobile application facilitate customers to buy company's products using their mobile without visiting at their physical store. It easily influences buying behaviour of targeted customers which in results increasing sales and revenue of company. Along with this, there are other advantages as well that will be received by OAK Cash and Carry which are given as below:
Competitive advantage: Every organisation whether small, medium or large has operated its business functions with an objective of sustaining in market for longer period of time through competing with their rivals in more effective and efficient manner (Crossan and Apaydin, 2010). As OAK Cash and Carry is small sized company which faces tough competition with large number of rivals therefore it is important for company to implement new and innovative ideas into business structure so as to achieve competitive advantage in market. For example, the administration department of OAK Cash and Carry may uses mobile technology in which they decide to launch new mobile app which facilitate customers to buy company's products without visiting at their physical stores. This will help company in achieving huge customer base which in results achieving competitive advantage in market. Bringing innovation in marketing activities are also help company in gathering huge number of customers at their stores.
Application of best methods: Innovation enhances the way of grabbing an attention of customers across worldwide. Only the requirements is an effective management who are capable to think different and something innovative that will make their company different from their rivals. Implementation of new and innovative ideas into action in the procedure of different business activities help in achieving productivity and profitability. For example, launching a new mobile app to increase sales and customer base or using social media platform to achieve loyalty of retained customers (Guan and Chen, 2010).
Difference between invention and innovation
Innovation and invention are two different concepts which are adopted by every organisation in order to brings something new and innovative into the market so as to achieve competitive advantage. Innovation is the process of developing the features of current products with the help of using unique methods and techniques where as invention means creating something new which cannot be introduced earlier in the market. Apart from this, there are many differences among between two which are given as below:
It is a practice of converting something existing products into new and innovative so as to retain loyal customers for longer period of time.
It means creating something new and different which cannot be introduced earlier in market due to low in demand.
Its main aim is to enhance the value to existing products as compared to before.
Its main aim is to expand business in market through capturing large market share.
Strategic and marketing skills has to be required to bring innovation in existing products.
Only scientific skills are required to invent new thing.
Inclusion of something to existing products to increase their value in market.
Creation of new products.
For example, launching a new mobile application to make easy for customers to buy company's products without visiting at their physical stores.
For example, launching new grocery product in order to grab an attention of large number of customers.
P2: Role of organisations culture, mission, vision and team in innovation and commercialisation
The culture, vision, mission and team performance encourages management of OAK Cash and Carry to bring innovation and commercialisation in business structure so as to achieve them within pre-determined period of time. Without changing existing into innovative, the company cannot achieve its desired outcomes in near future.
Vision and mission are two aspects which need to be understand by the employees of an organisation due to which they are motivated to find new and innovative ways of achieving them within limited period of time. It will help in improving efficiency in performance of employees as well.
Culture refers to the norms, beliefs, value which are exist in an organisation with an objective of giving proper direction to their employees to perform in better and ethical way so as to achieve better possible outcomes. For this, the management of OAK Cash and Carry develops organisational culture which brings motivation and confidence among employees to work hard and give their maximum efforts in achievement of organisational goals and objectives. It also help managers to maintain healthy relationship with the employees through creating healthy atmosphere at workplace (Plewa and et. al., 2012). It will maximise the interest and working behaviour due to which they are able to continuously perform 8 to 9 hours with the help of getting adequate support from the management. Through proper communication and coordination among employees, it will help in reducing the chances of conflicts as understanding level between the employees are improved. Such healthy and good atmosphere at workplace help employees to think freely and bring out some new and innovative ideas to perform their allotted roles and responsibilities in more effective and efficient manner.
Team performance is important aspect on the basis of which the goals and objectives of an organisation can be achieved within pre-determined period of time. As combined efforts as compared to individual efforts brings maximum positive result to company thus it is important for managers and leaders of OAK Cash and Carry to motivate employees to work in a team and helping each other to use some innovative ways of achieving common team goals. Apart from this, it brings unity and trust among the employees while performing in a team which brings long term advantages to company in future period of time. It will help in achieving high productivity.
Leadership is an important aspect which brings motivation and confidence among employees to utilise their skills and knowledge in order to provide optimum result to organisation. With the context of this, the leaders should have skills to lead team from front and using a effective approaches and strategies in giving proper direction. Leaders always concerned about the improvement in performance level of their employees and makes them more capable to assist company in achieving competitive advantage.
All such aspects encourages an organisation to make changes in their existing business procedures in order to achieve all goals and objectives as soon as possible. Therefore, the management of OAK Cash and Carry shall required to consider all such aspects given below:
Vision: The vision of OAK Cash and Carry is to bring diversification in the grocery products offered by them and increases the experience of customers through using their products and services. It will help in enhancing the profitability and revenues (Breznitz and Murphree, 2011).
Culture: The management of OAK Cash and Carry need to maintain culture, beliefs and values within an organisation so as to increase efforts of employees towards achieving organisational goals.
Leadership: The leaders of OAK Cash and Carry shall required to establish healthy environment at workplace which gives an opportunity to employees to think freely and bring out new and innovative ideas in execution of business activities in an effective and efficient manner.
Team work: The management of OAK Cash and Carry shall required to give more focus on combine efforts rather than individual efforts due to which they need to educate their employees about the positive outcome that may received while working in a team. It helps in maintaining healthy relations as well as helps in identifying each other’s strengths and weaknesses.
P3: 4P’s of innovation and contribution of innovation funnel in generation of innovative ideas
4P’s of innovation:
Product innovation: Such innovation is related with the product offered by OAK Cash and Carry in market. As the customer are easily attracted towards the company’s products which are of optimum quality and have less price. Therefore, to attain competitive position in market OAK Cash and Carry need to make some modification in the features of their grocery products. For an instance, Oak Cash and Carry decide to produce organic food items along with dealing with organic vegetables and fruits. With the help of this, the company is able to capture huge market share and generate huge revenues.
Process innovation: It includes the changes made in the process of execution of business activities which help in maximising the quality of work. As OAK Cash and Carry deals in offering multiple range of grocery products therefore it is important for them produce quality products and services to the customers. Thus, it can be possible when the management of OAK Cash and Carry should adopted innovative techniques and equipments in order to reduce wastage of raw material and maximise the quality of products at minimum cost. This will help in maximising the satisfaction level of customers and retain them for longer period of time (Lee, Olson and Trimi, 2012). For example, using social media platform to market their new and innovative products will make easy for company to create demand and influence buying behvaiour of targeted people through advertising and communicating with them.
Position innovation: Such innovation is related with the brand position of OAK Cash and Carry in market which can grab an eye of customers towards the products and services they offered in market. As due to small in sized, OAK Cash and Carry may required to bring innovation in their brand name and logo in order to build and identification in market due to which the customer can easily attracted towards them. For this, OAK Cash and Carry need to prepare some tag line and logo in order to identified by their customers in market. For example, social media marketing is considered as an effective platform to reach large number of customers in order to maintain the position of their innovative product into market.
Paradigm innovation: It is the process of building structure of organisation where the employees gets freedom to share its views and opinions with the management and co-workers so to bring innovation into company. Maintaining healthy work environment encourages employees of OAK Cash and Carry to work for the betterment of an organisation (Yoo and et. al., 2012). For example: Bringing transparency in communication brings motivation among employees to share their innovative ideas to promote its promote its organic products into market to increase sales and revenue.
It refers as the funnel where more focuses of management is to develop existing products through adding extra value due to which the needs and requirements of market can be fulfilled. It includes three steps in funnel which are given as below:
Wide of mouth: It includes gathering of new and innovative ideas with the help of information collected through research or survey in which competitors, employees and customers takes participates in it. It will help in giving right direction to management of Innovation funnel
to modified their existing products according to the needs and preferences of customers. For example, launching a new mobile app or introducing organic products in their offering list are some ideas that the management of Oak Cash and Carry may adopt.
Selection of idea: In this, the best and profitable ideas should be taken among various options after analysing the effectiveness and result that may received by company in near future. For example, organic food items may adopt by Oak Cash and Carry in order to capture the needs of health conscious people. It will help them in achieving huge customer base.
Implementation of idea: In this, the selected ideas converted into an action without any delay so as to achieve competitive advantage and attain strong position in market. For example, Oak Cash and Carry start to sell organic food items into the market with an effective pricing policies to meet the needs and requirements of health conscious people.
P4: Developments in Frugal Innovation
Frugal innovation: It refers to the process or an activity of reducing the complexity and cost of production through eliminating unwanted features attached with existing products. According to this concept, the management need to bring changes in their existing products through eliminating unnecessary features and add some extra added value in order to increase the value of products. As through conducting research, the management of OAK Cash and Carry came to know which features attracts mostly customers whereas which feature reduces their satisfaction level. Removing non-essential features from product reduces cost of production process due to which the saving amount shall be utilised in adding features to the products which are more in demand. Due to this, there are lot of benefits the company will gain which are follows:
Reduction in production cost: Avoiding unwanted features during production process will help in reducing cost of operation due to which the revenue and profit will be increased. It saves time and cost due to which OAK Cash and Carry can easily attract large number of customers (Chiesa and Frattini, 2011).
Development of new feature: Elimination of non-essential features from the existing products help company during cost of operation due to which the saving amount can further be utilised by company to add some value to the products that will help in increasing the value of products . Through this, OAK Cash and Carry can easily achieve high profitability and productivity.
P5: Importance of commercial funnel and role of NPD in innovation and commercialisation
Commercial funnel: It refers to the process of manipulating the mind and buying behaviour of customers with an objective of choosing best products among various number of options. But before that it is necessarily required to identify their perception and needs and on the basis of which changes should be made in the existing products through bringing out new ideas. In order to influence the mind of customers, extra value to be added in the existing products so as to make unique and different products than their rivals. It will help company in identifying themselves in market through providing value added products to the customers in market (Frishammar, Lichtenthaler and Rundquist, 2012).
Importance of commercial funnel
As adding value to the existing products will always brings beneficial result to company some of which are given as below:
Enhancing quality: The minds and buying behaviour can only be influenced when an organisation adding extra value to products that increases value as compared to their rivals’ products. Therefore, it increases quality of products of Oak Cash and Carry due to which customers are also can easily attracted towards purchasing company’s products.
Reduction losses: Modification in existing products brings maximum number of customers at the store of OAK Cash and Carry which increases the sales figure and revenue. Thus, it will help company recovering losses that may face from other products.
Improvement in goodwill: Offering value added products and services maximises the satisfaction level of customers which increases the brand image and goodwill of company in competitive market (Dmitriev and et. al., 2014).
New Product Development
Introducing new product into market will help in attracting new customers and capturing large market share. Therefore, to produce new product following steps must be followed by OAK Cash and Carry:
Generation of new idea: This is the frost stage where the new and innovative ideas are developed in order to produce new product that maximises the satisfaction level of customers.
Screening of idea: In this, the best and profitable ideas will be chosen after analysing the profit margin and sustainability of new product in market.
Defining concept: in this, proving all details and information to the employees related with new products.
Business analysis: At this stage, the effectiveness of new products will be analysed in order to ensure whether it will bring profitable outcome to company in business environment or not.
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Product development: Under this, adoption of techniques and method in the production process will be selected so as to produce quality product.
Test marketing: At this stage, information about new products has been spread in market in order to grab an attention of customers across worldwide (Howlett, 2010).
Commercialisation: This is the last stage where the managers reviews all above steps and accordingly decide to launch new product with the help of formulation of an effective plans and strategies.
P6: Development of innovation business case
Innovation business is essential to prepare with an effective plans and strategies as it directs and encourage employees to come up with new and innovative ideas in complex situations so as to deal with influence factors in more effective way. OAK Cash and Carry is small sized company due to which faces too many difficulties to survive and high competition in market. Therefore, it is essential for them to build innovation case which consist of different steps:
Executive summary: OAK Cash and Carry is small-sized retail company which deals in offering wide variety of grocery products with an aim of becoming one of the leading retail organisation in market through producing innovative and unique products that makes them different from their rivals. For this, all department such as marketing, production, sales, and finance will required to get support in executing pre-determined plans (INNOVATION AND 4Ps OF INNOVATION, 2016).
Need: It includes current trends, competitor's products, buying behaviour of customers etc. on the basis of which company should produce quality and innovative products. For example, Needs of health conscious people is to consume healthy products containing high nutrition.
Solution: It includes information collected from research in order to find out an optimum solution so as to make an effective decisions and plans for the betterment of an organisation. For example, start to provide organic food items to meet the needs of health conscious people.
Research of customers: It includes identification of interest and perception opf customers relating to their products so that needed changes can be implemented in existing products. For example, identifying the actual needs and preferences of health conscious people regarding their buying behaviour.
Designing of plan: It includes formulation of plans and strategies for the employees to perform allotted task in an effective manner. For example, introducing organic product into market through using social media as a tool of promoting such product.
Investment requirements: It includes raising funds from different sources in order to provide sufficient help in executing pre-determined plans and strategies without any interruptions. For example, inviting shareholders to increase their capital in company to get maximum return in future.
P7: Various tools that can be used by enterprise to develop and protect intellectual property
Intangible property consists of asset which are invisible in nature but plays an important role in growth and success of an organisation. Such includes new ideas and innovation which can be secure by an organisation in order to protect them from their rivals. Therefore, the management should required to use different tools and techniques in order to protect and keep with themselves only. Such tools includes:
Professional help: It is an effective tool through which an organisation took advice from the experts and professionals so as to protect crucial information about employees, customers, strategies etc. from their rivals (New Product Development Stages, 2017).
Trademark: It is another tool through which an organisation can secure its symbol, tag line etc. by registering them with the company's name. The company can protect these for maximum 10 years and therefore need to review it (Innovation Funnel, 2016).
Patent: With the help of such tool, the company can secure its innovations so that it cannot be leaked to outside parties.
Copyright: It is such a tool with the help of which the company distribute its rights of selling products with the help of using company's name. The company uses such tool in order to enhance brand image of company in market.
It has been concluded from the above project that innovation is an effective way of achieving competitive advantage thus need to be implemented by an organisation. Encouraging employees to work in a team and rewarding them help them to bring new ideas and innovation while executing allotted business activities. 4P's of innovation and the concept of innovation funnel should also required to implemented in order to sustain in market for longer period of time
- Bianchi, M., and et. al., 2010. Enabling open innovation in small‐and medium‐sized enterprises: how to find alternative applications for your technologies. R&d Management. 40(4). pp.414-431.
- Breznitz, D. and Murphree, M., 2011. Run of the red queen: Government, innovation, globalization, and economic growth in China. Yale University Press.
- Chiesa, V. and Frattini, F., 2011. Commercializing technological innovation: Learning from failures in high‐tech markets. Journal of Product Innovation Management. 28(4). pp.437-454.
- Crossan, M. M. and Apaydin, M., 2010. A multi‐dimensional framework of organizational innovation: A systematic review of the literature. Journal of management studies. 47(6). pp.1154-1191.