Managing Innovation in Business


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The term “Innovation” refers to the procedure of translating an invention or idea into a product or service that creates value for end-user or for which consumers are willing to pay. For businesses, this could mean employing new ideas, improving existing services or creating dynamic products  (Andriopoulos and Lewis, 2010). It act as a catalyst for business growth and success and help firm to grow and adapt in the marketplace. The given report is based on ASDA which is a leading British Supermarket Retailer. The main purpose of this report is to cover past, present and future innovation capabilities and activities of given firm through conducting innovation audit.

Company Overview

ASDA is globally renowned British supermarket retail merchant, since 1965. It is founded by Fred and Peter Asquith.  Besides its core supermarkets, the organization also deals in providing number of other services including financial and mobile services. In 1999, it become a subsidiary of Walmart which is an American retail giant. Today, ASDA falls in the category of most -well and reputed brands of UK. Currently, it operates in more than 25 countries with over 642 stores all across the world.

Innovation Audit

Before we undertake the innovation journey of ASDA, it is better to know from where we are starting. Thus, an accurate and genuine assessment of company's innovation, creativity and agility capacity is necessary. An innovation audit take a glance at various issues to perceive what is functioning well and what is obstructing development or innovation in the business. The primary objective of this audit is to identify the exact strength and weakness of company's innovation practices & processes and also to discover best possible ways to improve overall performance. Five key aspects of innovation audit are discussed below:-

  1. Innovation Strategy: It includes to what extent the innovation strategy is effective, clear and communicated (Seebode, Jeanrenaud and Bessant, 2012). But before developing strategy, it is important to identify what key problems were overlook by company and how it can be solved through embedding innovation.


ASDA has gained popularity for its innovative practices & consistently tried to bring new technology into its business model. During 2012, ASDA faced several issues like increased cost of transportation, high use of fleets and drivers which adversely affected it's overall operations and logistic department.


The retail market is changing and that too at a faster rate. This enable ASDA to embed innovation in its existing business process model.


Strong competition is growing in retail industry which makes ASDA to do frequent innovation in their businesses so as to attain high competitive advantage in the market place.

  1. Idea Generation: It defines the extent to which there is positive and collaborative approach towards developing customer-centered ideas (Lundstedt and Colglazier, 2013). This means idea generated by firm must provide high level of satisfaction to customers.


Considering the problem aroused in 2012, idea is generated by ASDA keeping in mind to improve its delivery process so that goods can be reached  on time. The idea generated must utilise vehicle and driver resources in an effective manner.  During 2012, company projected to improve its supply chain operations so as to delivered transport efficiencies for supermarket giant. As a result, overall transportation cost of goods were reduced by using advanced map-based transport optimisation software. This system provide better routes & make use of drivers and fleet more efficient. Paragon's Multi-Depot software is strategically used by ASDA to precisely design routes of delivery and use of vehicles across its twenty two depots. By encouraging transport efficiency in this manner, ASDA had a chance to reduce road miles via enhanced use of its 1600 trailer units and more than 1000 fleet of tractor units.  


In order to cope up with present situation, ASDA must focus on meeting customer requirement in a structured and thorough manner. Here the idea generated must provide high level of satisfaction to end-users. Presently, ASDA is trying 360 degree laser check-out at its Yok Store so as to provide convenient shopping experience to its target consumers. The new check-out system called Rapid Scan is introduced by ASDA who very easily picks up bar code from every angle, moving belt and cameras. At a moment, it scan more than 100 products in a minute and it is 3 times faster than manual scanning.  Every customer wishes to save maximum amount his/her time while doing shopping. By fulfilling this desire of customer, ASDA become the first one to invent this amazing machine to its shoppers. 


For anticipating future projections, ASDA must improve its online capacities related with a new cutting edge technology. Along with this, company needs to focus on monitoring all interaction and traffic on its global website i.e. 24 hours a day, 7 day in a week.  ASDA will become the first one to install parcel vending machine in United Kingdom. Taking the advantage of high end technology, company has decided to implant automated parcel vending machine. It is  8ft wide and 16 ft tall that can hold up-to 500 parcels at a time. 

Simultaneously it allow customer to collect online order as well as take returns. In future when customers visit ASDA store, they can simply scan a product barcode sent to their smartphones at the Parcel Tower  and gets it order within 60 seconds. In-fact for capturing high market share, company has decided to provide its service to third party partners as well such as Decathlon, Missguided and Asos. By implementing this service, ASDA aims to increase its per day customer visits by 40 million by 2019.

Prioritisation: It defines the extent to which most suitable ideas are selected for implementation (Tschirky and et. al., 2010). There are many ideas generated by company but selecting most appropriate and suitable among them is a challenging task.


The innovative software used by ASDA is Multi-Depot (part of Paragon Software System). With the application of this system, company aims to provide benefit to both customers and environment. Using fleet capability in an optimum manner results in decreasing vehicle emission and fuel usage. In total, 5-10% of transportation cost were saved by implanting this software. Further, the cost was re-invested into the business to reduce overall costs to shoppers. ASDA not only able to minimise its capital expenditure with the application of this system but also use existing resources in a cost efficient manner.


In this competitive era, every company aims to deliver best product or services that gives high satisfaction level to its target consumers. Taking the advantage of this, company aims to provide convenient shopping experience to its end-users by implementing 360 degree laser check-out system. Knowing the fact that shopping habits of consumers are constantly changing i.e. people are looking & shopping around for greater convenience that ultimately saves their time, efforts and energy. By using high end technology, ASDA ensure a smooth shop for its potential buyers. 


ToYou (Innovative Parcel Delivery Option) will act as a game changer in forthcoming period. Interest for internet shopping is consistently expanding, with it develops the hunger from online retailers to have physical impressions their clients can get to. With this, ASDA bridges the gap between consumer who what to return or collect their online orders while carrying out their weekly shop. Also it gives a reason to customer to visit ASDA stores.


  1. People and Organization: It defines to what extent is there a innovation culture(Gillier and et. al., 2010).


In 1979 barcode system was added to organisation which helped to track the quantity and volume of inventories. This was also the part of key marketing in Spalding, Lincolnshire and market changes. This was the easier option in terms of managing the order level, sales targets, level of recording the structure, improving the stock and management with in the organisation. Clubcard facility was also one of the customer attractive and exploring factor of retail culture in world wide in past decades. It develop the purchasing and investing power of customer and motivate them towards purchasing the goods and getting discounts and memberships. ASDA also started attractive schemes and offers to enhance the sale graph and purchase power of customers.


There are a revolutionary changes seen in terms of innovation and cultural change in retail sector. ASDA is one of the retail sector organisation which also adopted some innovative changes in terms of exploring and emerging the business structure at next level. At present ASDA is adopting artificial intelligence, online trading and exporting goods and services to enhance the digital marketing. There are efforts were putted by ASDA in the direction of putting customer interest first and enhance the basic structure at next level.


Technology has been shaping and disrupting traditional retail models for decades. There are new dimension and innovative changes are to be implemented in ASDA as introducing advanced customer support system, effective search engine and analytical tool for filter quality products are the main innovative changes to be done in proper manner. Local based marketing technology, virtual reality, personalised promotion, virtual mirrors, Haptic technology are the upcoming innovations which are to be implemented by ASDA.   


  1. Output: It describes to what extent the number of new goods and services developed are sufficient enough (Nambisan and Sawhney, 2011).


In total, there were 21 depots of ASDA all across the globe covering main region including North East, North West, South East, South West and Midlands. It is obvious to have issues related with transportation when company is operating with such large fleet. In order to overcome these issues, ASDA optimise its supply chain operations by transforming its routes and logistics.  However, the system used proved to be effective for the company as it was in total saving 5-10% of total fleet cost of transporting products to stores. In-fact it comes out as a major success for ASDA in terms of reducing capital expenditure via better and optimum use of driver and fleet availability.  


With the application of 360 degree laser checkout, ASDA is collectively saving time, efforts and energy of its end-users. This has the make the process of shopping easier and convenient for customers. Presently, ASDA is the only store in UK that is using this technology. Shoppers only need to unload their items onto the conveyor belt, then groceries are scanned through to bagging. This makes the check out time three times more faster than manual scanning. Additionally, it also improve the overall efficiency and performance of company and enables them to gain high competitive edge in the market place.


ToYou ASDA's latest parcel delivery service is going to provide high competitiveness level to company in forthcoming period. It has been estimated that by implementing this system, ASDA will be able to increase 40 million extra visit of customers per year. Along with this, projected profits going to be increase by 1.5 billion on annual basis.  


According to above-mentioned report, it can be concluded that success and growth of any firm depend upon how effectively it fulfil diverse needs and requirement of customers. For sustaining long term in market & gaining high competitive edge, it is important to do innovation on constant basis. Before embedding innovation, it is important determine exact strength and weakness of firm by conducting Innovation Audit. Along with this, past, present and future innovation capabilities of chosen organization is also taken into account which further indicates how company improvize its operations and performance via undertaking innovation.   


  • Andriopoulos, C. and Lewis, M.W., 2010. Managing innovation paradoxes: Ambidexterity lessons from leading product design companies. Long range planning. 43(1). pp.104-122.
  • Seebode, D., Jeanrenaud, S. and Bessant, J., 2012. Managing innovation for sustainability. R&D Management. 42(3). pp.195-206.
  • Lundstedt, S.B. and Colglazier, E.W. eds., 2013. Managing innovation: the social dimensions of creativity, invention and technology. Elsevier.
  • Tschirky, H. and et. al., 2010. Managing innovation driven companies: approaches in practice. Springer.
  • Gillier, T. and et. al., 2010. Managing Innovation Fields in a CrossIndustry Exploratory Partnership with C–K Design Theory. Journal of product innovation  management. 27(6). pp.883-896.
  • Nambisan, S. and Sawhney, M., 2011. Orchestration processes in network-centric innovation: Evidence from the field. The Academy of Management Perspectives. 25(3). pp.40-57.
  • Bieraugel, M., 2015. Managing library innovation using the lean startup method. Library Management. 36(4/5). pp.351-361.
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