Impact

of Innovation and Creativity in Profitability in Coffee

Franchises. A Comparison between Costa Coffee and Illy Coffee.
Pratik Shrestha (21240206), Supervised by David Luigi
University of West London

Abstract Research Questions Literature Review

Innovation and creativity is a broad topic not 1. What models of innovation and creativity do (Arthur D Little, 2005) conducted the Global Innovation
just including development of new products. the two franchise apply and how does it affect excellence survey based on the top innovators where more
As one of the most innovative companies in the business spectrum and profitability for both than 800 companies form across the globe provided their
the World, Illy and Costa Coffee takes full the companies? insights on the issue of how companies use innovation to
advantage of utilizing innovative management 2. How comparing the two companies marketing improve profitability and growth. It concluded that top
to foster corporate entrepreneurship and strategy from each other sufficient to extract innovators have more than twice higher sales of new products
Profitability. This research proposal paper will their roles in innovation and creativity ? and get more than 10 times higher returns over the original
be covering a detailed analysis of how 3. How do consumers feel about the change in investment made on innovation. Plus innovation based profit
introducing innovation, creativity and rooted marketing strategy? growths are possible from a well-balanced innovation
knowledge of the business facilitates a huge 4. Will a new marketing strategy account to approach. Love et. Al(2009) did researches based on a panel of
turnaround for Costa Coffee and Illy Coffee in increase in innovation and creativity in any of manufacturing plants in Ireland accomplished relations
their marketing strategy . Both of the coffee the two coffee franchise ? between innovation, ownership and profitability. Their result
franchises have shown exquisite creativity and 5. What are the concerns the two companies are suggests that the efforts of promoting innovation activity
innovation in their marketing strategies such facing currently with the marketing strategies amongst the business proved to be a long-term investment
as Costa Coffees Costa Express service and they are using and what recommendations can with higher returns. Cefis and Ciccarelli (2005) did another
Illys Collaboration with Samsung in their be given to improve it? study in the UK for the time period 1988-1992, they discovered
Flagship store in Regent Street in London. 6. Is just analyzing the two companies innovators are more likely to be profitable. And the difference
comparatively sufficient ? between innovators and non innovators are persistently
greater. Cefis and Ciccarelli (2005) also find that over time
there is a decay effect on innovation and the positive effects of
that on profitability decreases in the duration.
Research Methodology
Research Philosophy : Research philosophy is going to be interpretative as the paper is trying to
interpret the available data and take sense of the information that can be collected Reference
Data Collection : Initially Qualitative research will be used to fine tune the aspects of examining and
Cefis E and Ciccarelli M (2005) Profit differentials and innovation,
identifying the possible impacts of innovation on profitability. This will be done via some primary
Economics of Innovation and New Technology, 14, 43-61.
and secondary data i.e. previously done studies and questionnaires. Quantitative data will also be D Little, A. (2005). In n o v a tio n E x c elle n c e 2 0 0 5. 1st ed. [Online].
examined that have been provided by the companies and that are available in literature and other Available at:
sources, this is to verify and critically analyze the existence and correlation between innovation and http://www.adlittle.com/downloads/tx_adlreports/ADL_Global_Innova
profitability. The findings will then be discussed and critically make a qualitative analysis of all the tion_Excellence_Survey_2005.pdf [Accessed: 15 May 2015].
claims that the companies have made in respect to their marketing strategies. Love, J., Roper, S.Du, J. (2009). Innovation, owners hip and
profitability. International Journal of Industrial Organization, 27 (3),
Data Analysis : Nvivo10 in drawing conclusion based of all the dependent and independent variables
p.424-434. Elsevier BV [Online]. Available at:
and perceived values, and SPSS for Qualitative Data. doi:10.1016/j.ijindorg.2008.11.001.