Unit 9 Innovation Assignment BTEC Level 5

Introduction and background

The innovation has been one of the most research subjects in business as the various ways the innovation affects businesses and the market is diverse and unpredictable. The impact of innovation depends on many internal and external factors that make the innovation one of the most unpredictable market forces for businesses to leverage. However, the innovation provides small and medium enterprises (SME) and opportunity for growth and compete with larger corporations with their limited resources which makes the innovation an important opportunity for the SMEs (Çakar and Ertürk, 2010). The specific organisation that is being discussed is the cheap coal, which is a startup in a developing country in the Asia Pacific which makes use of the limited technology and energy demand to market a low-cost cooler that would work more efficiently than traditional fans at a much lower cost than air conditioning. The vast market in the region and the low income of the population can work to the advantage of the company if the product can be marketed correctly. Thus the innovation and the opportunity it provides for the company for development is discussed in light of the various elements of innovation in the paper. This essay discusses the various features and characteristics of invocation top develop a business case for the company in light of the opportunity presented in the scenario (Vanhaverbeke and Cloodt, 2014).


P1 Innovation and invention

The invention and innovation while similar in the general context have some distinct differences that make them more evident in the business scenarios. In addition, while the various inventions are often confused with innovation there is a definite distinction between the two. The invention can be defined as something new that is developed from scratch by a unique idea generated and given physical form to the development. On the other hand, the innovations in the various new uses for already invented items that allow for the use of the same technology in new and different ways. Both of the processes are important in the technology angle as the innovation creates value while the invention is the idea that together forms the backbone of the evolution of the market and product development. Fort eh resource-based view the invention is where the resources are put into idea generation which births new ideas and the physical manifestation that are the new inventions (Gokhberg and Meissner, 2013). The innovation, on the other hand, takes the ideas that are generated by the innovations and modifies them to makes a If seen from the perspective of value the invention does not have any value in the business context until a suitable use of the invention can be determined that meets one need of the consumer that the current technology is unable to meet (Bagautdinova et al., 2014). The invention is mostly a scholarly concept that is based on research and findings that help develop new ideas.

The innovation, on the other hand, is purely based on the value that is created through the practical use of the inventions that makes the process much more commercial in nature that is based on the profitability and customer satisfaction rather than the development itself. Thus, the innovation is a value-based process that is concerned with the business value of an invention rather than the unique nature of the invention, which is the main motive for invention in from a scholarly perspective (Drucker, 2014). Therefore, while the invention is based on the development of something new the innovation is based on the use of the same development of practical use to meet the needs of the customers that make this different from invention. The innovation, therefore, can be termed as the contextual use of the invention for business gain, which is vastly different and more materialistic than the inventions.

There is also the limitation of the process and their nature that provides a further distinction between the processes as the invention is based on the newness of development and their difference from the existing ideas and technologies. The innovation is not too different for the fear of being disruptive to the market. Thus, the innovation is often limited, as the organizations do not want to change the market landscape too much that can cause radical changes in the business environment that is harmful to the economy. Therefore, the invention is not bound by the customer expectation while the innovation is limited to the customer acceptance of the change ensures the business success, not the novelty of new. Therefore the invention while being the source of the new technology is not concerned with the market implementation of the invention but the innovations are solely based on the development of the technology into a product that can affect the customer needs and provide greater value that can be retranslated in the business advantage (Basu, Banerjee and Sweeny, 2013).

P2 Vision, mission and commercialization of innovation

The organisational application of innovation is limited by the organizational structure and operating philosophy which can be evident in the various business cases where some organization are able to successfully transform innovation into value through popular products and processes when others fail (Wang, and Rafiq, 2014). Therefore, it can be easily understood that some organizations are much better at developing innovative products than others. This can be attributed to the various internal factors that mark the organisational aptitude to develop new ideas that help in the development of the new products through practical implementation of innovation. The organizational vision and mission are the best indicators of the organisation's philosophy regarding innovation that helps both understandings the ability of the organisation to adapt to new innovation changes. Thus, the vision and mission statement of any organisation can be used to understand the potential scope of use of innovation in the specific organizational context (Souto, 2015). This is a common occurrence as despite the possible benefits the innovation is uncertain which is not to the liking of many conservative businesses while the others are more flexible and are ready to apply innovation in their processes. The organizational vision, therefore, is indicative of an organization's opinion about innovation as they often are reflected in the organizational values and vision.

The leadership is also another aspect of the innovation as the innovation is based on the satisfaction of customer needs by the using new developments this is inexorably related to the lower level of the organisation. Thus the top down organisation structure is often indicative of a conservative nature. The leadership, on the other hand, if open to the inputs from the staff of all levels for the generation of ideas they are more likely to use innovation their product and process developments. This characteristic while being a common indicator does not affect the success of the various larger companies as some of them have developed a bureaucratic structure to develop ideas in a way that generates and selects innovative ideas among the upper spheres of management which is just as effective. Therefore while being a general indicator of the innovation acceptance the development is not always correct. However, it is seen from the examples that the organizational flexibility often matters the most in case of the development of the innovative ideas and the flexible team setting with various inputs are most innovative among the various organizations. The innovation while indicative of change is not always positive therefore the control over the new product development is one aspect of the operations that can make sure of the company business success as this filters the innovative ideas down to the ones that are most likely to have a highest positive impact on the market (Gmelin and Seuring, 2014). Therefore, the organisational leadership and control structure is an indicator of a company that is more likely to use innovation as its value generation tool in new products and services that make use of the commercialization of innovative idea the cornerstone of their business.


P3 4Ps of innovation and explain the use of the innovation funnel

The innovation funnel is the process through which a business organization commercialises an innovative idea in the market through developing new product or service that would help in the company's business development while bringing greater value to the customers. Thus the innovation funnel guides the process from the idea generation to the presentation of the product to the customer.

The wide mouth of the invocation funnel is the stage where eh various ideas are generated for the future innovation and the organization conducts research both internally and externally to understand the various innovative ideas that can be used by the customer. This stage is based on the volume of the ideas as the higher the number of the ideas that higher the option of the future development and business implementation (Karande and Kalbande, 2015). Not to mention the impact of the same stage on the organizational knowledge base is very positive.

In the next stage of the innovation funnel the ideas are screened for feasibility which is the significant stage as the various ideas are judged based on the implementation potential, feasibility and impact and the various facets of innovation are often used for the development of the few ideas that help in the innovative development by the company successfully to increase business value. The 4p's are often used for the screening process as this outlines the various factors of the innovative ideas that need to be judged to ensure the practical implementation of the idea and generative value.

The 4P's of innovation and innovation funnel are the concepts that explain the different aspects of the invocation process based on their different characteristics and the different stages of the innovation respectively. The 4P of innovation are the four characteristics that help explain the different facets of the innovation process that needs to be considered in the commercialization of the innovation.

Paradigm- the paradigm is the characteristics of the invocation process as this outlines the impact of the innovation being commercialised which is considered when commercialising an innovative idea. The level of disruption or the market landscape is considered in the aspect which determines the feasibility of the innovative idea in the business context (Karande and Kalbande, 2015).

Product- the product is the main consideration in the commercialisation of the project and is the innovation is an adaptive process that depends on the customer opinion of the product and the aspect of the product that would bring most value to the product in the market environment is considered in the stage for the analysis of the ideas in the business context. Thsius the chosen innovation is dependent on the business value it brings based on the aspect of the product it enhances and its significance to the customer (Cui and Wu, 2016).

Process- the process change this needed for the implementation of the innovative ideas into eh business needs to be considered as the process changes it brings to the business could affect the organisation more adversely than the value it brings. Therefore, this is the stage that determines the feasibility of the innovative idea by the amount of change is needed into the organization to commercialise the idea and compare it with the benefit it brings.

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Position- the position facet of the innovations based on the usability forth idea into a practical context and thus decide on the potential of the innovative ideas in the specific customer population and their needs. This helps decide on the customer's segment to whom the innovative product or process would bring the most value which is an essential element that helps in visualising the market and the position of the product in the market environment (Vanhaverbeke and Cloodt, 2014).

In the narrow mount of the tunnel, the various stage of the invocation process implementation is outlined from the procurement and production to the supply chain and delivery. Thus, this stage is concerned with the planning of the commercialization of the idea in the context.

P4 Commercial funnel and the application of New Product Development (NPD)

The commercial funnel for the new product development is applicable in the context of innovation. This is evident in the similarity of the concept with the innovation funnel in the first few stages. The idea development and screening application criteria are the main factors that makes this essential for the commercialization of the innovative ideas as the commercial funnel in the NPD is based on the judging of the potential value and use of the new product from the consumer perspective. This is therefore easily adaptable to the innovative products as the development of the ideas and the basis of its selection is done internally information from the market environment, which ensures the business success of the innovative idea. As the basis of the understanding is, finding the future market potential for the innovative product this can be easily applied to the innovative product development models in different markets (Tsujimoto et al., 2016).


P5 Frugal innovation and provide examples

The frugal innovation, as the name suggests, is affordable innovation where the value creations are based on the use of the materials that are used for repurposing and modifications to increase value. The least amount of material used to the making innovation by subtracting additional features from an innovation to make it cheaper is the main characteristics of the frugal innovation. Thus, the main characteristics of the frugal innovation are the transformation of something of lesser value into something of greater value. Thus, value creation can take many different forms where the various unnecessary features of an existing product can be removed to offer great price impact and the use of repurposed and recyclable materials etc (Weyrauch and Herstatt, 2016).

There are many examples of frugal innovation present in the developing countries because of the low income and the lack of resource, which makes the frugal innovation especially important for the development potential of the country. This frugal innovation is used by the various business organizations in the developing nations and the start-ups who develop and commercialise the frugal innovation ideas into business success. One example of the development in this regard is the use of the Jaipur leg, which is developed in the Indian city of Jaipur which reduced the cost of the prosthetics to a fraction of the original cost which increased the affordability of the prosthetics significantly (Radjou and Prabhu, 2015). Another example is the development of the Indian feature mobile phone by Nokia, which did not have any additional facility except calling or messaging. All of the additional features were removed to decrease cost and increase affordability which was seen the high sales rate of the model in Indian rural areas. Some features like calculators and flashlight were kept, as they were the most often used by the population. This is one of the most successful frugal innovations by a multinational company (Weyrauch and Herstatt, 2016). Another example is the LPG driven a mini car by Tata motors named the Nano, priced at 1 lakh Indian rupees or about 1500 USD which increased the affordability of the motor vehicles and is one of the cheapest four-wheeled vehicles in the world.

P6 Business Case

The business case that is developed for the small SME is based on the various characteristics of the product and uses the principles of the frugal innovation in the product development. The product is a cooler made of clay and ceramics, which uses the evaporation of water to cool rooms without using too much energy and this is innovative because this principle of aided passive cooling has never been used in the home electronics sector. The best characteristics of the cooler are its energy efficiency and eco-friendly nature as the product is made mostly from the organic materials and does not use any artificial coolants which is the most harmful effect of the refrigeration technology. This device is not only cheap but offers minimal maintenance and ongoing cost which makes it suitable for the developing nations.

As the product uses eco-friendly technology to replace one of the highest sources of eco-friendly technology the funding of the product will mainly come from the environmental organizations that promote the environmentally friendly technology (Du, Yalcinkaya and Bstieler, 2016). Thus, the fund provided would be based on the 12 months business plan and the budget of operations and distribution which would be used as the basis for the application of the various grants that are available by the private and government sector.

Funds are known as one of the most valuable source of a business enterprise without this firm cannot execute its operations. So many sources are there that can be utilise by firm to generate funds as given in following points:

  • Bank loans: This is one of the most popular source to funds for businesses. In this company get loan form banks on some rate of interest. After that company pay interest to the bank and use that funds for carry out commercial activities.
  • Business incubators: They mainly focus on high tech sector by provide support for new ventures in different stages of development. There are some local economic incubators that mainly focus on various areas such as create more and more jobs and share services.
  • Crowdfunding: This is another way of funding that can be utilise by small companies. This concept indicates taking loan from various individuals. For get funds from individuals, enterprise first put a detailed description of business idea on crowdfunding platform, mention goals and platforms and also state the reasons why he needs funds. Individuals who found business idea a profitable one, invest their money in the same.
  • Angel investors: Individuals who have cash in surplus with an interest to invest to same in small start-ups are known as angel investors. Along with funds, they offer their advice to people who want to start a business. One disadvantage related with this option is that angel investors invest less amount in business as compare to venture capitalist.


P7 Knowledge management tools

The branding of the company that makes the technology accessible to the company alone does the first step in protecting the interests of the company. This process of the development of the first prototype and the development of the supply chain and production line would take a huge amount of knowledge. Thus, the company needs to establish a knowledge database for use by the organization, which would help them in developing the process for efficiency and impact as the company, grows. The first tool needed would be the knowledge management suite that would allow the company to access organizational information.

The cybersecurity suite is also another tool that would be used as the company would need secure access to the internet while prevention the threat of data theft and the protection of the organizational information.

Major tools that can be use by firm to develop and protect intellectual property can be understood by the following points:

  • Trademark: It is known as recognisable design, sign and expression that help individuals in identify company’s products and services. Trade marks that are use to identify services are known as service marks. Owner of a trademark can be an individual, organisation or can be any legal organisation. Trademark mainly located on a voucher, package, label or on product.
  • Patent: This is use to describe the exclusive right granted by intergovernmental enterprise to an inventor for a specific period of time in exchange of public disclosure of an invention. Mainly an invention is known as a solution to a particular technological problem. The process of granting patent application must include one or more claims that define the invention.
  • Copyright: This is a legal right existing globally in various countries that mainly grants the creator of original work exclusive rights to determine and decide whether and in which conditions the original work may be used by others. This is a intellectual property applicable in specific forms of unique and creative work.
  • Trade secrets: This is another tool that can be use by companies in order to protect their intellectual property. Mainly, trade secret is a process, formula or device which a company keep private as it provides a competitive benefit to company. Customer lists, survey results and soda formulas all are the example of trade secrets. One can get protection by register trade secret.

All these are the major intellectual property tool that can be use by a company to protect its intellectual property. In case of cheap Cool, trade secrets can be utilise by company as company can secret its process of producing new product.


It can be surmised that the resource-based view makes the innovation the exact opposite of the invention as one generated resource from ideas while the other uses up the resource to generate ideas. Therefore, to conclude it can be said that this report outlines the possibilities for the organizations and paves the way for the organization to implement their innovative business idea in the market a. the physical implementation of the invention that meets customer needs to generate resources. Thus, it is clear from the various factors of innovation and invention that makes them fundamentally different while being connected by their interrelation in the development of a process or product development. This would help develop an understanding of the commercialization process for innovation And help in the development of the business in future.


  • Bagautdinova, N.G., Galieva, G.T., Pakhmutov, Y.O. and Pratchenko, O.V., 2014. Methods of regulation of processes of innovation business development. Mediterranean Journal of Social Sciences, 5(12), p.75.
  • Basu, R.R., Banerjee, P.M. and Sweeny, E.G., 2013. FRUGAL INNOVATION. Journal of Management for Global Sustainability, 1(2).
  • Çakar, N.D. and Ertürk, A., 2010. Comparing innovation capability of small and medium‐sized enterprises: examining the effects of organizational culture and empowerment. Journal of Small Business Management, 48(3), pp.325-359.
  • Cui, A.S. and Wu, F., 2016. Utilizing customer knowledge in innovation: antecedents and impact of customer involvement on new product performance. Journal of the academy of marketing science, 44(4), pp.516-538.
  • Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
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