Innovation And Commercialization Strategies For Heinz, An Essay.

Task One

a). Explain innovation and determine its importance to organisations

b). Define and explain invention and its importance to business and how Heinz could continuously employ the two to improve its chances in the industry sector. 

c).You should also explain the difference between innovation and invention.

Explain how Heinz could use its organisational vision, leadership, culture and teamwork to shape innovation and commercialisation of its invention. You may need to research on Heinz’s Vision, culture, leadership as well as the way it operates its team to help you this section.

Analyse different sources of innovation, and how Heinz as an organisation can foster and develop an environment and culture of innovation in order to improve and sustain it current position within the industry.

Explain the 4Ps of innovation and explain the use of the innovation funnel to examine and shape innovative ideas. 

Explain meaning and developments in frugal innovation and provide examples of how it is used in an organisational context. Explain how Heinz could adopt this method to improve its position

Analyse and how Heinz could apply the innovation funnel in its organisational context.

Evaluate the role of frugal innovation in an organisational context relating your evaluation to Heinz.

Critically analyse to Heinz, how innovation is developed, embedded and measured in an organisational context. Advise them the best way these could be handled by the company.

Explain the importance of the commercial funnel and the application of New Product Development (NPD) processing for commercialisation of innovation to the company.

Provide a strong case for the business to be innovative and advice the business on how it could access funding to finance it innovation.

In addition to your points and arguments in task 10, provide a detailed Innovation Business Case for Heinz which should include suggestions on to measure its overall effectiveness of the innovation using appropriate techniques available to test, iterate and improve the business.

Critically evaluate the nature of innovation and the context in which it is developed, providing evidence-based judgements on how organisations such as Heinz can overcome challenges to develop successful innovations.

Evaluate the different tools that organisations can use to develop, retain and protect knowledge and intellectual property.

Present supported evidence-based evaluation of these different tools in the context of the wider business environment. Your evaluation in Task 14 must draw examples from different companies to support organisational practices of the tools identified in task 13.

Invention and innovation are two words that have been wrongly used interchangeably. Unfortunately, there exists a thin line between the words. Companies have been claiming to be the leaders in “innovation” while producing exclusive rights as evidence but how viable are those patents? How many of these patents have been turned into commercialized products? It is, therefore, evident that it is impossible to talk about innovation without outlining the economic importance of the idea. According to Herbert (2016), the manipulation of the available ideas to come up with a new product in the market is what is referred to as innovation. It is therefore not right to talk about innovation without mentioning the introduction of a new product that will have customers queue for it.

On the other hand, the invention is coming up with a completely new idea for the first time. Invention normally means the discovery of something new that has been proved to work. The invention can then be described as the combination of the solutions of multiple problem statements from different disciplines and backgrounds and coming up with a solution to a certain problem. An inventor is someone who critically thinks of a solution to a unique problem using a combination of solutions of other different problems. Although inventions do not normally result in any commercial advantage, they are very important to the growth of a business. This is because innovators utilize the inventions to come up with commercially viable products that result in improvement of a business’ chances in the industry sector.

The main difference between invention and invention is that inventors comes up with completely new ideas upon implementation, proves successful. On the other hand, innovators may not necessarily come up with new products, but they might use the available ideas o come up with a commercially successful product. A product is termed to be an invention if it has never been used before. However, for a product to be considered innovative, the consumers must get a real value out of it.

Heinz is a company with a vision to be the best food company and growing a better world.  It has a culture of innovation and transparency in its operations.  Heinz has a chance of commercializing inventions through the refreshment of their existing product. This can be done by extending the way in which their products are consumed. Consumer need is also constantly changing and this brings the development of new products into handy. Through the company’s vision of becoming the best food company, Heinz can provide their employees with resources and financial rewards in order to encourage them to actualize their original ideas into commercialized products.  In the company’s quest to provide a sustainable health as a corporate citizen, Heinz can provide organic foods to mothers who are reluctant to give readily prepared foods to their babies. The company’s culture of transparency will have the mothers queuing for the products as it has already proven to be true and reliable.

Task Two

Heinz has succeeded in developing customer loyalty and confidence and s, therefore, able gain support for their new and existing products. The company can invest in innovative managers and supportive employees through the provision of financial support. The culture of innovation can be grown if the company can handsomely reward those managers, employees and technical staff who come up with new products that gain acceptance from the consumers.   Another source of innovation for Heinz is a re-evaluation of its iconic brands. Though the company has succeeded in creating products that have been acceptable for 50 years down the line, there are new consumer demands, for example, the need f to incorporate new flavors and packages and offering organic products rather the normal products offered by Heinz.  The company can also focus on partnering with creative partners such as Walkers that will enable it to provide unique flavors to its existing brands and extend it out to its existing traditional markets.

The foundation hypothesis of successful innovation is being positive about change and implementation of the four categories: Product innovation, process innovation, position innovation and paradigm innovation.

The most understood type of innovation is the introduction or improvement of a new product or service. There exists a wide range of innovative products that can be used for the realization of organization goals. For example rather than the introduction of new shapes, new taste or new flavors in products, a company can be innovative through new packages, delivery methods and new ways of keeping products fresh. Every contributor of the product is important, ranging from the manufacturing team, sales or management team. The question for every innovative company to its stakeholders should be “what can you do personally to make our company innovative”. This is because a product begins from manufacturing till it reaches the consumer.   

Process innovation normally focuses on the processes that a product goes through during its production or during delivery. The efficiency and effectiveness of a product can be improved when a company focuses on becoming innovative process organizations. Some of the innovative process ideas are automation of packaging processes, CNC adoption, quicker, cheaper and efficient delivery and strategic location of product warehouses. 

These types of innovation deal with re-positioning of own perception and that of the consumers. The way an existing product is perceived in its processing or in a specific context and how this can be used for the realization of organizational goals is what is entailed in position innovation. An example of position innovative idea is the changing of product’s usage perception from a particular usage into general usage, which will improve products sales. Prahalad, Hammond, and Allen (2002) argue that it is not how good a product is that determines the number of sales. The number of sales is determined by the consumers’ perception about the product.

Task Three

This type of innovation is based on specific categories of innovation. It redefines the standards of the whole organization of the simply the standards of a specific sector. It deals with models and shapes desired by the consumers. Again, innovations need to be profitable to the organizations while as well as providing better products to the consumers.  

The innovation funnel provides a graphical structure for visualizing alternative development opportunities. There exists a wide variety of process and product ideas. All the ideas need to pass through careful screening in order to come up with fully fledged development projects that provide the most attractive opportunities.

The ability of a business to produce the commercially and socially viable products that are affordable to consumers is what is referred to as frugal innovation (WE-Open Innovation., 2014). Frugal innovation must be cost effective and must create eco-awareness.   The products produced through frugal innovation must be sustainable, affordable and of the highest possible quality. Frugal innovation should not be focused on resource constraint; rather the major concern of frugal innovation should be more of a strategy, flexible approach and take resource constraint as a growth opportunity. The context of frugal innovations is normally based on the emerging markets (Prahalad, Hammond and Allen, 2002).

In the organizational context, frugal innovation does is not really concerned with what is achieved; rather, frugal innovation focuses on how things are achieved. Success in frugality is normally based on minor innovations. Frugal innovations should, therefore, be based on the context of what is commercially viable in the northern hemisphere may not be the same in southern hemisphere YasserBhatti (2011). In Heinz, it is possible to adopt the frugality by focusing mostly the development of products that are affordable to everyone. If Heinz decided to put little efforts to the financial constraints and focus on developing products which are sustainable, affordable and socially viable, then the company is assured to be profitable both in the long run and in the short run.

Heinz can make use of the innovation funnel by starting the development processes with an extensive range of inputs and progressively refine and selecting the most economical and manufacturable products from among them. Heinz can then create a rapid completion and introduction of these products from the formal development projects identified. However, for Heinz to come up with these economical and manufacturable projects, then it has to be prepared to do the following two things. The first one is to widen the mouth of the funnel. It must be prepared to expand its access to information and also widen its knowledge base. This will enable it to improve the existing products, come up with new products and also improve the production processes. The second thing is to narrow the funnel which will involve screening the ideas and focusing its resources on the most attractive chances. The overall advantage of this is that Heinz will be able to focus on the projects that will guarantee maximum payoffs.  

Task Four

Frugal innovation plays a role in the context of an organization. Frugal innovation leads to the discovery of new business models and the reconfiguration of value chains (Weyrauch and Herstatt, 2016). Through frugal innovation, Heinz is able to redesign its products such as the organic baby foods which will be able to serve consumers who are reluctant to feed their children with bought food and those who face affordability limitations. This role is line with Heinz’s vision of sustainability and production of better services to its consumers.  Heinz will also have a chance to overcome resource constraints and organizational vacuums in order to reach more comprehensive markets (Bhatti,  2012).

The development of an innovation culture is the key founding factor of an organization’s success. If Heinz wants to be successful through innovation, then its only option is to build a culture of innovation.  The development of a culture to spot new and emerging trends, a culture of creativity, and problem-solving skills is what Heinz needs.  The organization also needs to embrace diversity through employing people from different backgrounds, race, personalities and experiences.  These people with diverse origins bring into the organization, a wide range of ideas, and capabilities which are beneficial to the organization. It is also very important for the Heinz manager to make it clear that they listen to everyone’s view.   Embracement of failure also needs to be done. The creativity and innovativeness of the employees should not be killed by the fear of the consequences faced if an implemented idea does not give the anticipated results. However, not all the ideas should be embraced and implemented. A careful scrutiny should be done on every idea to avoid loss of resources on unrewarding activities.  The management should free the employees once in a while to work on their personal initiative (Hove, 2013).

Embedment of an innovation culture and harnessing the influence of innovation is the best transformative tool.  The innovation ambitions built by an organization are what define it. Innovation can be embedded into an organization through the use of clear innovation strategies, innovation approaches that are simple, robust and proven to work, involving members of the workforce to drive innovation into themselves and to others, resource allocation, and support mechanisms.  The innovation mechanisms also need to be embedded into the Performance Management Systems (Zeschky, Widenmayer, and Gassmann, 2014).  

Once Heinz has done all this, it is very important to set up a measurements system to analyze high-impact interventions and to inform the “framework”. The measurement data can be obtained from various primary and secondary data sources which include benchmarking of best practices, interviewing employees and analysis of the performance metrics. This will enable the organization to determine whether it is doing well in the generation of ideas but lacks the implementation skills or it has excellent concept design and lacks the ideas.

Task Five

Heinz needs to carefully define its ambition before entering into innovation.  It needs to ask itself questions such as “What does our company need?”, “When should the implementation be done?” and “How does it link with the vision and mission of our company?”  After answering itself these questions, then a diagnosis of and process design should be done and a commitment to implementation be made (Acemoglu, Aghion and Zilibotti, 2006).

Commercial funnel refers to taking services and products to markets. The organization is able to make a lot of money once the services or products are commercialized. New Product Development (NPD) is similar to innovation funnel. It will be important for the company to invest in NPD for both survival and to make profits. This is because there is global competition and technology is changing rapidly, raising competition among the companies. Commercial funnel and NPD are important because they increase the rate of new product introductions and drive technological advancements.

Heinz is a company that has been doing well in a range of products it offers. The company has managed to penetrate into the market widely and has created customer loyalty.  However, Heinz still needs to analyze each of its products’ performance in the market. This is because of the changes that have been occurring recently in the market which include the customer tastes and preferences.  Despite the fact that Heinz products, for example, Heinz Tomato Ketchup has managed to stay in power for quite long, some even up to 50 years, there exists a demand for new products which Heinz has not yet manipulated. There also exists an innovation gap in the way the products are being consumed.  Heinz needs to be innovative enough by teaching their consumers new ways of consuming their products, for example showing mothers that their organic products can also be fed to their babies rather than only being consumed by the adults. Heinz needs to be creative enough in the products of new commodities to meet changing tastes, lifestyles and intense competition. Consumers are also demanding for products that do not create the need for wash up, products that can be consumed on the go and conveniently packaged products. Consumers are also demanding for a wider range of products to satisfy their diverse needs and lifestyles.  It is, therefore, clear that Heinz needs innovation strategies to be able to fulfill these demands.

After prototyping, Heinz needs to do a demonstration of the products in the market. This will be an attempt to answer the following question

1. Will it possible to produce products that will be acceptable in the market?
2. Will the production process work as it was anticipated?
3. Is it possible to use a different business model and still remain profitable?

Task Six

After answering these questions, then it is time for Heinz to seek capital for innovation. There exist different sources of funding for innovative ideas. However, the availability of funds depends on some factors which include the type of product. Some type of innovation ideas requires only a few dollars and employees time while some require billions of dollars to set up the process. After determining the number of resources needed, then it can proceed to seek for funds (Bravo-Biosca,  Cusolito, and Hill, n. d).

Heinz is a large company with a lot of resources. In the initial stages of development of these innovation projects, Heinz can make use of its own funds. There exist other sources such as equity and convertible loans but it would not be wise to go for them as they reduce the owner’s value in the business. Very special knowledge is needed in the discrimination of good or bad projects in this stage of accumulation of funds. Crowdfunding, pre-commercial procurement and business angels are the other sources of funds in the other stages of implementation of the innovation projects (McArthur, 2016).

Heinz has been doing well in the production and management of its large range of products. Some of these products have remained powerful in the market for more than 50 years. However, there has been an overall revolution of the consumer tastes and demand for a wide a wide range of choices by consumers to satisfy their tastes and lifestyles.

The vision of Heinz is to remain as the best food company and grow a better world.  It also has mission of growing a culture of innovation and transparency in its operations.

With any stakeholders competing on the same problem, Heinz has an added advantage over the others due to their prolonged ability to satisfy their customers. The innovation projects in question are also in line with the company’s vision of being the best food company and being able to grow a better world through the satisfaction of the consumers' food demands. The company will benefit from the innovation projects in the following ways:

1. Ability to analyze the performance of each of its products in the market.
2. Refreshment of the existing concepts through the innovative extension of the consumers’ use of the product.
3. Identification of new markets.
4. Creation of products that are more appealing and more satisfying to the consumers

Once the innovation projects are complete, the company should perform the following tests to measure the overall effectiveness of the innovation:

1. Conduction of interviews to the consumers to ascertain whether the products satisfies their expectations.
2. Analysis of the performance metrics
3. Benchmarking to aspects of the best practices.
4. Issuing of questionnaires to the employees to have their views on the general direction of the company

The risks involved in the implementation of the innovation projects include denial of the product by the consumers, need for new manufacturing equipment and processes and lack of support from the employees.  However, enough measures to counter these risks include careful analysis of the customers’ needs and preferences, careful alignment of the anticipated processes to use the available processing plants and accumulation of funds to set up new manufacturing equipment and finally the company’s reward system has been redesigned in order for the employees to get a share of the benefits that are likely to be accrued from the success of te innovation projects (Radjou, Prabhu, 2013).

Task Seven

According to Perrin (2002), innovation is a novel way of doing things better or differently. It mainly focuses on significant leaps rather than incremental gains.  Innovation can either be large scale or small scale. Large scale innovation includes identification of a new business venture or a documentation of a new knowledge. Small scale innovation is normally based on initiatives that within large projects.  Although innovation and technological advancement are two words that are normally used synonymously.  This means that it is possible for one to innovative in so many ways including improvement in service delivery, delivery methods and reduction in delivery time. However, by nature, innovation is very risky and unpredictable in terms of the activity that will prove useful, a time when benefits will occur and worse still if they will occur, which approach is the best under which circumstance and whether the discovery that will be similar to the intended one.

 It is, therefore, evident that when an organization such as Heinz intends to be innovative, their promising concepts must be put into a very difficult test before implementation.an innovative organization will therefore not expect the new concepts to necessarily work. Perrin (2002) claim that only one out of ten trials succeed. More statistics from Perrin (2002) indicates that anticipated returns of 20% to 25% are only realized by only 0% to 20% of real of funded companies. Companies like Heinz, therefore, need to embrace the concept of trial and error and also embrace the openness to learn in order to be successful innovators.

The hard-earned innovations of companies need to be protected from competitors. There are several tools that have been devised to ensure that the development, retention, and protection of knowledge and intellectual property is done in the right manner. Some of these tools include trademarks, trade secrets, patents, and copyrights.

A trademark is a phrase, design, word or symbol that distinguishes the owner of the service or product of an organization from the competitors. In order to acquire a trademark, an organization must first of all be to have a clear identification of the class of goods and have a distinct mark of representation of the goods or services in question. In order for a business to have an advantage over its competitors, then the business should keep its formulas, devices or processes as secrets (Jolly, Fletcher. and Bourne, 2012). This is referred to as trade secrets. When a company obtains a right to prevent the competitors from reproducing, reselling or using an innovation is referred to as patents. A patent is a very important tool in the development of an organization it is able to develop new and better processes that give them an advantage over other competitors.  Copyrights normally deal with the protection of literature works such as films, books, pictorial, dramatical and graphical works among others. With copyrights, only the author has exclusive rights to create, modify, copy display or perform the work (Raman, 2004). 

Task Eight

Organizations spend a lot of time and resources in coming up with the products they offer in the market. A good example is a pharmaceutical industry that does extensive and extremely costly tests and procedures in coming up with drugs they offer for human use. Their contributions can therefore not be taken for granted. The industry thus has to make patents to their innovations in order to protect their investments from the competitors who can produce an exact replica of the product. (de Beer, 2016).  According to a report by the Institute for Information Law at the University of Amsterdam, copyrights assists in assessing the economic contributions of intellectual property. The trade secrets, according to empirical evidence have been found to be more inclined with the small and medium enterprises. The patenting process has also been found to hamper innovations but is more preferred when used strategically in higher revenue SME’s.

References        

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