CEC - Assignment Final 26nov

CREATING ENTREPRENEURIAL CHANGE
DECEMBER 2020
STUDENT ID: XXXXXXXX

Creating Entrepreneurial Change – Dec 2020
Student ID: xxxxxxxx
Table of Contents
1.1 Company Background of ODEL PLC.......................................................................................................6
1.1.1 Products and services.....................................................................................................................6
1.1.2 Customer base and the key customer segment..............................................................................6
1.1.3 Key competitors..............................................................................................................................7
1.1.4 Key Stakeholders............................................................................................................................7
1.1.5 New product development at ODEL...............................................................................................7
1.2 Evaluating Macro environmental aspects that has impacted ODEL in the recent past..........................8
1.3 Disruptive innovation at ODEL and the critical assessment based on competitor, risk and impact
analysis on market sector..........................................................................................................................10
1.3.1 Evaluating the potential impact of disruptive innovation on the clothing market........................10
1.4 Conclusion...........................................................................................................................................12
2.0 Entrepreneurial Innovation - Report....................................................................................................14
2.1 Innovation Audit of ODEL to implement a new clothing line...............................................................15
2.1.1 Innovation Audit (Drummond & Ensor, 1999)..............................................................................15
2.1.2 McKinsey’s 7S Framework to assess organisational culture.........................................................15
2.2 Evaluating three entrepreneurial approaches to support the new product development at ODEL....18
2.2.1 Innovation Process........................................................................................................................18
2.2.2 Effectuation theory to drive new product development..............................................................19
2.2.3 Opportunity recognition for new product development..............................................................20
2.2.4 Identify opportunities for innovation within the organisation.....................................................21
2.2.4.1. Horizon Scanning......................................................................................................................21
2.2.4.2. Mind Map for ODEL clothing....................................................................................................23
3.0 Transformational Change – Strategic Report.......................................................................................25
3.1 Two annotated value proposition canvases that evaluate two innovations........................................26
3.2 Two measurement techniques to measure the potential impact of the implementation of two
innovations within ODEL...........................................................................................................................28
3.2.1 Balance Score card........................................................................................................................28
3.2.1.1 Critical Evaluation of the Balance Score Card............................................................................28
3.2.2 Cost Benefit Analysis.....................................................................................................................28
3.2.2.1 Critical Evaluation of the Cost Benefit Tool................................................................................29
3.3 Recommended change management strategy for improving the innovation culture in ODEL to
identifying the potential benefits and barriers to implementing the strategy..........................................29
3.3.1 Barriers, benefits and challenges when implementing a change strategy....................................30
2
3.3.2 Strategy evaluation - FSA model by Johnson and Scholes............................................................31

Appendix 1 – PESTEL..................................................................................................................................32
Appendix 2 – Porters 5 Forces analysis......................................................................................................33
Appendix 3 – Competitor Analysis.............................................................................................................34
Appendix 4 – McKinseys 7 S......................................................................................................................35
Appendix 5 – Stakeholder Analysis............................................................................................................36
Appendix 6 – Gantt chart on time line.......................................................................................................37
Reference..................................................................................................................................................38
3
List of Figures
Figure 1:Key competitors.............................................................................................................................7
Figure 2:Key Stakeholders...........................................................................................................................7
Figure 3:company performance..................................................................................................................7
Figure 4:Impact analysis............................................................................................................................11
Figure 5:Innovation Audit..........................................................................................................................16
Figure 6:Value Creation model..................................................................................................................18
Figure 7:Innovation Process......................................................................................................................20
Figure 8:Opportunity recognition..............................................................................................................21
Figure 9:Horizon Scanning.........................................................................................................................22
Figure 10:Mind Map for ODEL clothing.....................................................................................................24
Figure 11:Innovation One – Unisex organically produced T shirts.............................................................27
Figure 12:Innovation Ones analysis...........................................................................................................27
Figure 13:Innovation 2 – Self designing T-shirts........................................................................................28
List of Tables
Table 1:Customer Base................................................................................................................................7
Table 2 :Macro environmental aspects Social factors...............................................................................10
Table 3:Macro environmental : Environmental factors.............................................................................11
Table 4 :Impact of disruptive innovation on the clothing market..............................................................12
Table 5:Innovation Audit...........................................................................................................................17
Table 6:McKinsey’s 7S Framework............................................................................................................17
Table 7:Innovation Process........................................................................................................................20
Table 8:Effectuation theory.......................................................................................................................21
Table 9:potential innovation options.........................................................................................................23
Table 10:Balance Score card......................................................................................................................30
Table 11:Cost Benefit Analysis...................................................................................................................31
Table 12:Change management..................................................................................................................32
Table 13 : Barriers and challenges.............................................................................................................33
Table 14 :Strategic Evaluation FSA model.................................................................................................33
Table 15:Pestel Analysis............................................................................................................................34
Table 16:Porters 5 Forces analysis.............................................................................................................35
Table 17:Competitor Analysis....................................................................................................................36
Table 18:McKinseys 7 S.............................................................................................................................37
Table 19:Stakeholder Analysis...................................................................................................................38
Table 20:Gantt chart on time line..............................................................................................................39
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TASK ONE
WORD COUNT:
1370
5
1.0 Briefing Paper
Prepared for: The Senior Management team of ODEL
Prepared by: XXXXXX
Date: 5 November 2020
Subject: Critical evaluation of the macro environmental factors and industry evaluation
on innovation that has impacted the retail industry
The retail industry has seen significant change over the recent past due to many factors. Although, it can
be understood that the industry has seen a booming phase where many retailers have entered the
industry and today, it is one of the most highly fragmented industries in Sri Lanka.
To better project the future trends and to create growth in ODEL, this report will analyse the
organisational background, industry analysis over the past 5 years, macro factors that have impacted the
retail industry, disruptive innovation and the impact of the competitor innovation.
6
1.1 Company Background of ODEL PLC

ODEL is the first ever clothing retail company to be listed in Sri Lanka.
Founded by Otara Gunawardena in 1990 as a small-scale retail trade
venture, later developed in to one of the largest luxury department
stores in Sri Lanka. Subsequently in 2014, the ownership was transferred
to Softlogic Pvt Ltd. (Source: ODEL Annual Report, 2019) Type of organisation:
Public Limited Liability
Vision - To inspire the world company
Size of organisation
Mission - To provide a complete Mind, Body and Soul experience as 64 Retail stores island-wide
the premier fashion and lifestyle retailer promoting sustainable and Net sales for 2019:
LKR 8,160 Million
unparalleled levels of retail experience.
Staff Strength:
1214 - 58% males & 42%
Values - ODEL is guided by strong share values. We love, we serve, females.
we style, we innovate, we give, we save, we enjoy and we inspire.
1.1.1 Products and services

As a retail giant in the country, ODEL has
partnered with many international Casual Work Kids & Sports
brands apart from the ODEL Brand and
other local brands. The store is segmented
Wear wear Other Wear l
and can be categories in to the sub
sections depicted. The products are mostly catered to the mass affluent and affluent customer
segments and the pricing method used is the premium pricing method. Moreover, local collaborations
with jewellery, wellness products and services, perfumes, kids’ toys and food outlets are some of the
key partnerships ODEL has partnered which attracts high footfall to the outlets.
1.1.2 Customer base and the key customer segment

The key customer segment of ODEL can be categorised as mainly Mass Affluent and Affluent customers
as they are of higher purchasing power and are able to purchase the mid to high end brands. However, it
can be seen that the company does not directly target the young adult segment, mainly the Gen Z
customers.
Table 1:Customer Base
Young Adults – Gen Z Mass Affluent Affluent

Demographic Age 20-24 25 – 35 36 and above
Occupation Student/ Newly Professional/ Middle Senior
Lifecycle employed Managers Managers/CEO
Young & unmarried Unmarried & Married Married
Geographic Region Urban & Suburbs Urban & Suburbs Urban & Suburbs
Behavioural Benefits Digital & convenience
Psychographic Social Class Middle & Upper middle Middle & Upper Middle & Upper
middle middle
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Therefore, this campaign will be targeted at the Gen Z customer segment and they will be the key
segment for the campaign. This customer segment perform these retail and other purchases through
online and social media hence the communication mix will be skewed towards digital marketing
platforms in order to promote the given products and services.
8
1.1.3 Key competitors
Perceived
Quality
DC H O
H
GF
CP
HF
NL
L
L H Price
Figure 1:Key competitors
The current market share is highly fragmented with

many players in the market. This consist of a number
of small, medium and large enterprises who are
competing with each other. The key competitors for
ODEL (O) has been identified as below with 6 major
players and a strategic group map of these
competitors are shown. They are No Limit (NL),
GFlock (GF), Hameedias (H), House of Fashion (HF),
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Cool Planet (CP) and Dilly & Carlo (DC). However, it is important to note that the competition from
international players too are impacting the industry. eCommerce websites such as Ali Express, eBay and
Amazon has opened up the global marketplace for many consumers which are redefined the retail
industry and consumers are able to purchase retail items such as clothes at a much reasonable price in
comparison to the local stores.
1.1.4 Key Stakeholders
Level of Interest ODEL heavily relies on its key stakeholders and
High Low they are categorised in to three key segments.
These stakeholders play a crucial role in
Level of Power
High Key Player Keep Satisfied

Shareholders Government managing the eco system of ODEL.
Customers Regulatory bodies  Internal – employees
Low Keep Informed Minimal Effort  Connected - the customers,
Employees Wider community shareholders and vendors.
Vendors Pressure group  External - Community, government,
Media other regulators and pressure
Figure 2:Key Stakeholders groups
1.1.5 New product development at ODEL
The company performance of last 3 years reflects that

the net profit of ODEL has plummeted over the years.
Though there is a slight increase from 2018 to 2019, it
has continued to decline. As per the ODEL Annual Report
(2019), the main reason for the decrease in net profit is
Figure 3:company performance
due to the changes in macro-economic as categorised
Source: ODEL Annual Report 2019
below.
1. Shopping has not shifted to online and social media
platforms
2. Due to the low switching cost between the competitors, the bargaining power of consumers are high.
3. Consumers preference of moving to organic clothes however unavailability of same.
In order to align with the macro and micro environments, ODEL has aligned its strategy and will be
focussing on new product development by creating an ethically approved organic clothing line targeting
the key segment customers of Gen Z with more focus towards changing the distribution channel to
online/ social platforms.
1.2 Evaluating Macro environmental aspects that has impacted ODEL in the recent past
Table 2 :Macro environmental aspects Social factors
PESTEL Implication to ODEL Illustration

Factor
10
Social Changing consumer behaviour has been reflected

in the recent past with customers being more
conscious on the brands they purchase clothes
from. More concerns is placed on the quality of
the product as oppose to the quantity of clothing.
Sri Lanka Institute of Textile Association has
Table 3:Macro environmental : Environmental factors
PESTEL Factor Implication to ODEL Illustration

onmEnvir
Growing interest in ethical fashion has

opened new avenues for the retailers.
Consumers prefer ethical fashion retailers
as oppose to fast fashion brands. Globally,
the research suggests 56% of 18-24-year
1.3 Disruptive innovation at ODEL and the critical assessment based on competitor, risk and
impact analysis on market sector
As per Clayton (2008), Disruptive
Innovation describes a process by which a
product or service initially takes root in
simple applications at the bottom of a
market—typically by being less expensive
and more accessible—and then
relentlessly moves upmarket, eventually
displacing established competitors. The
innovations can be categorised as
architectural innovation, radical
innovation, incremental innovation and
modular innovation. Figure 4:Impact analysis
Globally, it can be noted that the retail industry is making headway with sustainable and ethical
fashion movement such as resale of clothing, ethical supply chain and raw materials, less wastage on
water consumption etc. while in Sri Lanka the pace of change is not parallel to the global levels. When
analysing ODEL, it can be noted that the new product development of organic clothing line is classified
as incremental innovation given that the changes will be gradual and will be implemented to improve
the existing product and process to derive a competitive advantage. ODEL has identified that sustainable
innovation is the critical factor to sustain and drive growth and profitability.
1.3.1 Evaluating the potential impact of disruptive innovation on the clothing market
Table 4 :Impact of disruptive innovation on the clothing market
Innovative Website Mobile App Mobile App for Website
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practice loyalty customers

and a website
Description ODEL operates an User friendly Cool Planet has a Dilly & Carlo too
online platform mobile app has wide array of has an online
where customers been introduced products however website where
can purchase by GFLOCK. The does not seem to customers are
items and pay app is up to date have a systematic able to purchase
online or with cash with a wide range order on the clothing with
on delivery. of products. website. The online payment
mobile app offers options and cash
the latest offers on delivery.
and arrivals along
with the loyalty
information.
Innovation type Incremental Radical Incremental Incremental
Risk & Impact While catering to Improves the user Customer reach is A limited number
the key customer experience and limited as the of items are
segment through the convenience accessibility is available on the
an online platform, of the customer. given to the loyalty website. The user
ODEL has not Might expose the customers only experience is
implemented the customer and despite the hampered given
mobile experience information investment the that the
to enhance through cyber- ROI is low. The customers will
convenience. This attacks hence rate of success need to visit the
will have a risk focus should be cannot be physical outlet in
element as given to protect determined given order to view the
customers might the customer the lower number full collection
move to other data. of users. Low ROI available.
competitors who will risk the Customer
offer convenience potential satisfaction and
during the shareholder the convenience
shopping investments. is hampered
experience. exposing the
innovation
towards a high
risk of losing
consumers.
Critical The clothing lines Has met and The company has Organic material
evaluation does not cater to exceeded the not moved are being used
the Generation Z Generation Z towards the however the
customers. customer ethical fashion organisation is
However, the expectations on market and is not aggressive in
delivery channel is the user focussing on fast selling its organic
somewhat in par experience. fashion. The user products. The
with the market Moreover, plastic experience on the user experience is
with room to recycles clothing website is in par hampered and
improve in line has been with the industry has room to
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enhancing the introduced in while the mobile improve in order

purchase cycle. order to cater to app acts as a CRM to cater to the
the key customer tool. As Cool key customer
segment. Planet caters to segment.
the mass customer
segments, they
will be in the fast
fashion domain
during next 2-3
years.
Market Impact 3 5 4 3
(1-5)
Innovation 3 4 2 3
significance
score (1-5)
1.4 Conclusion
 Generation Z consumers are moving towards conscious purchasing decisions which includes
clothing manufactured under ‘garments without guilt’, ethical supply of raw materials and less
wastage to drive sustainability.
 As oppose to previous generations, the given key customer segment is moving towards a
minimalist concept and are moving away from the fast fashion concept to drive sustainability.
 The purchasing behaviour is mainly through online and this customer segment is more versatile
in using eCommerce platforms which reduces the physical customer interactions between the
organisation and the consumer.
 ODEL has a competitive advantage with the suggested new product development of organic
clothing line and creating a radical disruption as the competitors have not yet moved to this
arena. This will provide ODEL with a first mover advantage as the leading clothing outlet in the
Sri Lankan domain.
Failing to embrace the new trends will impact the sustainability of the brand and also impacting the
competitive edge.
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14
TASK TWO
WORD COUNT:
1750
Prepared by: XXXXXX
Subject: Critical analysis of the Innovation culture and capability of ODEL for developing
and managing change.
This report will undertake an innovation audit of ODEL’s culture, skills and resources to implement
innovation. The report will further analyse innovation opportunities to develop a new product line to
drive growth. Moreover, the innovation audit will further analyse ODEL’s ability to develop and manage
change in order to face the unforeseen future and the face the challenges that will arise in the external
and internal environment.
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2.0 Entrepreneurial Innovation - Report
Prepared by: XXXXXX
Subject: Conducting an innovation audit to critically analyse the ODEL’s innovation

capability and evaluating three entrepreneurial approaches for new product
development
The report will evaluate the innovation capability of ODEL in relation to the culture, agility, skills,
leadership and resources. The report reflects that the internal strategy and the leadership is geared to
deliver innovations in terms of new product development the relevant resources such as the systems
and skills should be upgraded to meet the requirements. Based on same, relevant entrepreneurial
approaches have been suggested such as the new product development process, opportunity
recognition and effectuation theories to execute the new product development idea. Finally, the report
will evaluate how best ODEL can identify and exploit opportunities in the internal and external
environment through horizon scanning and a mind map.
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2.1 Innovation Audit of ODEL to implement a new clothing line
2.1.1 Innovation Audit (Drummond & Ensor, 1999)

The innovation audit assess the current ability of ODEL absorb the new product development process.
Innovation audit is a robust tool which critically evaluates the organisation’s innovation track with a
purpose of assisting the organisation to enhance its entrepreneurial skills (Diasz, 2017).
Odel's Organisational Evaluating current Reviewing policies balance of Senior

climate performance and practices Management Style
Figure 5:Innovation Audit
Table 5:Innovation Audit
Element Current situation Innovation Rank (1-5)

supportiveness
rating
Organisational The climate enhances productivity and HIGH 5
Climate creativity for innovation and change.
Hard Measures - While the rate of product development MEDIUM 3
Current Performance is quite low and can be categorised as a
‘Migrator’, the organisation should move
to the Pioneer status to drive more
innovation.
Policies and Practices The structures and policies are in line MEDIUM 3
with the innovation language however
there is room to improve.
Balance of Senior The management style encourages MEDIUM 3
Management Style innovation however, is also limited by
the resources such as the cost and time.
2.1.2 McKinsey’s 7S Framework to assess organisational culture

Table 6:McKinsey’s 7S Framework
S Factor Description Rating (1-5)

Current Desired
Strategy  The organisation strives to be innovative in the market place 3 4
however it has been able to upgrade the current portfolio
instead of driving innovation.
CURRENT STRATEGY
DESIRED STRATEGY
Create the most efficient
Seamless product flows
and flexible product flow;
with sustainability at the
from locally developed to
core operations
franchise labels
17
 In order to achieve the desired strategy creative destruction

and innovation is essential
Structure  The senior leadership team is responsible for the overall 2.5 5
strategic direction hence, most of the decisions are based on
the financial outlook of the company and lacks integration with
lower levels.
 The tone of the senior management is democratic style and the
management is open to absorb new ideas
 The structure should focus more on creating a creative climate
at all levels where agility and effective team working will drive
innovation.
5 member BOD
Chairman/ MD
SM1 SM2 SM3 SM4 SM5 SM6
SM7 SM8 SM9 SM10 SM11
Systems  Effective customer relationship management system and 2 5

market intelligence systems are in place to engage with the
existing customers on offers and new brand franchise
introductions.
 Should focus more on systems to understand the latest trends
and innovative production such as plastic recyclable
equipment which produces fabric etc.
 Moreover, resources should be aligned for innovations and
latest trends.
Style DEMOCRATIC LEADERSHIP STYLE 3 4
 Democratic leadership style and affiliate style can be
observed where staff and leadership teams engage in order
to generate customer insights and idea generation
processes.
 However, more agile and innovation leadership style is
recommended to drive innovation in ODEL.
Skills  The skills of existing employers reflect that the training and 2.5 4
development is provided such as on the job training,
leadership development and communication skills.
 The organisational learning culture should be embedded
to think out of the box and on to continuously learn which
in turn will derive an innovation mindset.
Staff  Staff are empowered to create a lasting impression on the 3 4
customer and to drive customer satisfaction.
 Collaboration and
18
alliances with third parties should be optimised to create a

work flow to record the front-line customer insights which
can be used for innovations.
Shared  Shared values are embedded in the vision and drives the 3 5
Value ‘we’ mindset. The value creation model is the centre of all
business implementations.
 The culture encourages innovation however the platform
and the workflow should be encouraged to thrive on an
innovation culture.
Figure 6:Value Creation model

(Source: ODEL Annual Report)
The above audit reflects that ODEL has an innovative climate and a culture however, there is room to
improve to derive the optimum levels of innovation and to achieve the set objective of new product
development.
19
2.2 Evaluating three entrepreneurial approaches to support the new product development at
ODEL
2.2.1 Innovation Process

The innovation process currently practiced at ODEL will be evaluated below. The process will be
evaluated based on 8 steps and the current evaluation of ODEL for innovation.
Table 7:Innovation Process
NPD Phase Current practices at ODEL Probability Rank (1-5)

of value
addition
Idea Generation  The Senior Management team drives for innovation however Low 2
the middle manager segments are poor at execution of
driving for new ideas.
 Front line staff share customer feedback and process
improvements however a clear bottleneck can be seen at the
middle manager levels.
Idea screening  Due to the lower number of idea generation, innovative ideas Low 2
are passed down from the senior management based on the
latest trends in the industry
 A pulse check will be carried out among the middle managers
and the frontline staff members.’
 Based on the cost benefit analysis and the feedback from the
staff members concept development will be carried out.
Concept  The research team in-house together with an external Moderate 3
development and research agency (Ex: Nielson) will further evaluate and
testing analyse on the concept.
 A concept will be developed by the production team in order
to identify the customer responsiveness to the product.
Marketing  The new clothing line will be targeted at the key customer High 4
Strategy segment of Gen Z as they have been identified as the most
profitable customer segment and also the organic products
will appeal more to this customer segment.
 A line of T shirts for both male and females made of cotton
will be introduced as the first step.
Business Analysis  A detailed cost benefit analysis and the investment required High 4
will be analysed. Moreover, a feasibility studies based on the
financial and production capabilities will be further evaluated.
 As there is an unmet need in the market, the first mover
advantage will also be considered.
Product  Based on the prototype developed, further fine-tuning and Moderate 3
Development production will commence.
 Strategic partnerships formed will be key in developing the
product such as the organic raw material suppliers and the
production companies.
 The organic t-shirt line which will be unisex will be
20
introduced.
Test Marketing  Prior to launching the product test-marketing should be done. Low 1
 However, given the intense competition and the ability of the
competitors to copy, test marketing will not take place.
Commercialization  The product will be launched at the main outlet in Alexandra High 4
Place, Colombo 7. Based on the responsive rate it for the
organic t shirt line it will be available at other stores island-
wide.
Figure 7:Innovation Process

Source: Diasz, L., 2016, 9.292
2.2.2 Effectuation theory to drive new product development
As per Sarasvathy (2008), effectuation theory reflects that entrepreneurs take a different route to
identifying and exploiting opportunities under certain conditions. Core to effectuation is the idea that
entrepreneurs ‘fabricate’ opportunities from the mundane realities of life.
Table 8:Effectuation theory
Principle Description Innovation Rating

(1-5)
1. Bird in ‘Start with your mean’ by  Enhancing the online platform and the 3
hand imagining possibilities digital eco system at ODEL as customers can
with the available means purchase items without visiting stores
during the COID-19 pandemic
 As the pandemic has limited the store
operations existing resources have been
diverted to R&D on the organic clothing line
to be introduced.
2. ‘Focus on the downside  Production of sustainable clothing is 4
Affordable risk’ refers to limiting risks expensive given that the sourcing of
loss by understanding what material and the entire production should
can become a loss at each be carried out to ensure that they are
step organically produced. This is a cost ODEL is
21
willing to incur in order to move in the

correct direction.
3. ‘Leverage contingencies’  The COVID-19 pandemic impacted the 1
Lemonade by welcoming unplanned sourcing of materials and other operations
factors and being flexible at ODEL and the organisation does not have
contingency plans to carry out operations
during a pandemic or to carry out the new
product development process. Recommend
to create contingency plans and move
towards mobile optimised eCommerce
platforms and focus on indoor planting
systems such as grow rooms and vertical
plantations.
4. ‘Form Partnerships’ by  ODEL has formed meaningful partnerships 3
Patchwor self-selecting stakeholders mostly to focus on the organic clothing line
k quilt by obtaining pre- suppliers. Sourcing the raw materials to the
commitments and final production is a step by step process
reducing uncertainty where pre-commitments have been
obtained to deliver organic clothing.
5. Pilot in ‘Control Vs. Predict’ by  ODEL has identified that the organic 4
the plane focusing on activities clothing is an unmet need of the Sri Lankan
within the entrepreneurs’ consumers and have started on the research
control which will yield phase to deliver organic clothing by 2021.
desired outcomes
Source for description: Effectuation.org, 2018
2.2.3 Opportunity recognition for new product development

Opportunity recognition determines the successful opportunities for the entrepreneur to opt for. Gaglio
(2004) explains that recognizing an entrepreneurial opportunity perceives a possibility to introduce
innovative goods or services to a marketplace by founding a new venture. Opportunity recognition
appears to include three distinct processes: (1) sensing or perceiving market needs and/or
underemployed resources, (2) recognizing or discovering a “fit” between particular market needs and
resources, and (3) creating a new “fit” between separate needs and resources (Hills, 1995; De Koning &
Muzyka, 1999). In the contrary Lim and Khin (2018) believes that opportunity recognition will be leaving
a gap in understanding their outcome such as entrepreneurs’ new venture success.
Prior knowledge of
market
Opportunity
New Venture success
recognition
Prior knowledge of
technology
Figure 8:Opportunity
Authors own work (Adapted from Hills et al., 2014: Liang et al., 2015) recognition
22
When evaluating the opportunity recognition for the retail industry and ODEL it can be noted that
unexploited opportunities lies in the industry and can be shown as below.
1. Sustainability clothing change
2. Minimalist clothing trends
3. Moving from fast fashion to slow fashion
4. AI production with seamless work flows
Based on above opportunities in the fashion retail industry, ODEL has embarked on the first
opportunity of sustainability clothing with the introduction of cotton and unisex t-shirts.
2.2.4 Identify opportunities for innovation within the organisation

2.2.4.1. Horizon Scanning
In the recent past, horizon scanning has garnered a number of definitions however, the basis of same
reflects that any organisation should be systematically predicting the potential threats, risks and
emerging opportunities. As per Blank (2019), The Three Horizons allowed senior management to
visualize what an ambidextrous organization would look like — the idea that companies and
government agencies need to execute existing business models while simultaneously creating new
capabilities — and helped to prioritize innovation products and programs.
Figure 9:Horizon Scanning

Source: Institute of Risk Management, 2017
Below table will evaluate the potential innovation options of ODEL’s ability to sustain with the future
shifts and trends.
Table 9:potential innovation options
Potential Description Probability of Recommended
opportunities impact to ODEL action for ODEL
(Refer appendix (Refer appendix
for rating) for rating)
Fading of fast  The impact on the environment and Very Clear - 7 Act - 7
fashion and sustainability actions have identified
move towards fast fashion to be one of the key
Sustainability sources contributing to the pollution
and climate change.
23
 The Gen Z consumers who are more

concerned about their
environmental impact is now moving
towards slow fashion and organic
clothing
Technological  Many retail outlets are moving
disrupters towards digitisation of the customer
service and production
Reasonably Clear Plan and
 A number of jobs will be impacted
-3 prepare 5
and the human capital of the
organisation will need to be carefully
planned
Minimalist  Gen Z Consumer behaviour has
clothing shifted towards a minimalist mindset
Reasonably Clear Consider
as they are more concerned about
-1 Response (-3)
their impact on the external
environment
24
2.2.4.2. Mind Map for ODEL clothing

Competition Chat bot stylists
from global
eCommerce Self-designing
platforms and production
Reduced time to
Ability to create Self-modelling market
differentiation for brands
Cost effective
Diversity suppliers
Competitors Innovations
Job security due Ethical raw
to technological material
advancements
Employees Supply Chain
Clothing
Industry
Delivery Channel Technology

High tech
Cashless production such
Environment
transactions as 3D
Chatbots as Maintain Fabric

customer balance alternatives as
service between plant barks/
environment peels/ plastics
Less no of Vs. fabric
physical stores production
AI driven
machinery
Clothes with no
chemicals and
use of natural
dyes (ex: plant
based)
Figure 10:Mind Map for ODEL clothing
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TASK THREE
WORD COUNT:
1750
26
3.0 Transformational Change – Strategic Report
Prepared by: XXXXXX
Subject: Value proposition canvasses and measurement techniques to evaluate the

innovation implementation and a change management strategy for ODEL
The Strategic report will discuss about the value proposition canvasses for the suggested innovations
which in turn will achieve the underlying objective. ODEL will then move on to the measurement
techniques to measure the potential impact of the suggested innovation implementations. At the last
phase, ODEL will be implementing a change management strategy to yield the optimal results of the
innovation implementation.
27
3.1 Two annotated value proposition canvases that evaluate two innovations
Innovation One – Unisex organically produced T shirts
In order to drive growth and profitability ODEL has identified that a new line of unisex organic T shirts
will be attracting the key customer segment of Gen Z while entering in to the sustainability quadrant.
Due to the association and changing consumer behaviour of the Gen Z customers, ODEL foresee that
they are able to attract a new customer segment with this breakthrough which will in turn increase the
profitability and overall growth.
Figure 11:Innovation One – Unisex organically produced T shirts
Figure 12:Innovation Ones analysis
100% organic T-shirts are an unmet need in the Sri Lankan market and this will open new avenues for a
number of stakeholders including suppliers and consumers. As most of the Gen Z customers prefer
products that are supporting the sustainable causes, there is a high probability that this product will
appeal to the given customer segments. Moreover, customers will be supporting the fair-trade
agreements, organic farming and being more socially and environmentally responsible resulting in
increased customer satisfaction and the feel-good factor.
28
Innovation 2 – Self designing T-shirts
Currently, there is a gap in the Sri Lankan market for self-designing T-shirts as none of the leading
clothing wear companies offer this service. Hence, customers have limited choice in customising the
designs and have to buy from the available designs. ODEL foresees that this is an ideal opportunity
create this innovation in order to attract the Gen Z consumers. Customers can either pre-design the t
shirt and upload on the ODEL website or visit the outlet and share the designs and collect the product
with shorter lead time as 24 hours. Currently, these customers purchase self-designing T shirts from
foreign e-commerce platforms which results in a waiting time of over 2 or 3 weeks to receive the
product.
Figure 13:Innovation 2 – Self designing T-shirts
The product is identified as unique by Gen Z customers and the customer satisfaction levels will exceed
due to the shorter lead time and the ability to personalise and express one’s creativity. However, the
29
product design can be easily copied which will impact the customers perception of ‘uniqueness’ of the
product.
Refer Appendix 6 for Gantt Chart on timeline.
3.2 Two measurement techniques to measure the potential impact of the implementation of
two innovations within ODEL
Innovation implementation require measurement in order to identify the effectiveness to the overall
process. Therefore, it is imperative to identify the overall strategic objectives of the organisation as the
innovations should be a stepping stone to achieve the given objectives. At ODEL the key strategic
objective is to drive growth and profitability and therefore two innovations have been identified.
3.2.1 Balance Score card

The above innovations and its impact will be measured based on the balance score cards as below.
Table 10:Balance Score card
Objective Measurement Target Rating (1-5)

100% Self-
organic design
T’s T’s
Financial Market Share growth Market share – Gen Z Increase by 10% 4.5 4
Growth in profitability Gross profit Increase by 7% 4 3
Return on investment ROI Increase by 10% 3.5 2.5
Customer Repeat purchase from Customer retention At 60% and 3 3
Gen Z customers rate above
Acquisition of Gen Z No of new customers Increase by 15% 4 2.5
customers
Customer satisfaction Net promoter score Increase by 15% 4.5 4
Digital platform Bounce rate Below 10% 3 3
performance
Internal Production efficiency Number of units 1200 shirts/day 2.5 3
Processes Economies of scale Unit cost Decrease by 15% 3.5 3
Learning Training and Number of learning 10 hours per 3 2
and development for hours quarter
growth innovative culture
Staff motivation for Number of innovations 2 per quarter 4 2
innovations
3.2.1.1 Critical Evaluation of the Balance Score Card

The above tool will provide an overview of the entire spectrum and therefore is able to generate better
strategic planning inclusive of innovations and an innovative culture however this tool will require the
full consent and cooperation of the senior management while the process is complex and require
resources to monitor the data on a daily or weekly basis constantly.
30
3.2.2 Cost Benefit Analysis

A cost benefit analysis for ODEL has been carried out in relation to the two innovations suggested.
Table 11:Cost Benefit Analysis
Criteria Key task description Quantity Cost (LKR)

Costs
Production Organically grown raw materials 150,000Kg 175,000,000
High speed machinery 10 25,000,000
Natural Dyes 10,000 litres 20,000,000
Natural yarn 2500 meters 500,000
Software tools 1 500,000
Staff and Expert staff 10 800,000
training Knowledge transfer – Training 10 sessions 1,000,000
Legal Patents 1 1,000,000
TOTAL COSTS 223,800,000
Benefits
Reduction in overall operational expenses by 10% 300,191,738
2019 Operating expenses – LKR 3,001,917,379
10% of above operating expenses – LKR300,191,738
Increase in gross profit by 7% (New customer acquisition and loyal customer 188,714,203
purchases)
2019 Gross profit – LKR 2,695,917,186
7% of above gross profit – LKR188,714,203
488,905,947
3.2.2.1 Critical Evaluation of the Cost Benefit Tool

The tool is a heavily relied upon by senior management who need to ensure that the innovations
implemented will generate a benefit to the organisation. The data generated from this tool will easily
buy-in the approval of the senior management and the shareholder as it is simple and a clear benefit is
reflected to the organisation. However, it should be noted that some of the intangible benefits such as
brand building and the positive word of mouth cannot be measured and will not be reflected in the tool
though the actual benefit derived could be much larger in scale.
3.3 Recommended change management strategy for improving the innovation culture in ODEL
to identifying the potential benefits and barriers to implementing the strategy
ODEL has been in the fast fashion industry over the years and have been identified as an innovative
brand which will deliver the latest and trendiest fashion to the Sri Lankan consumer. However, with the
changing consumer patterns and the focus on environment has created pressure for ODEL to move
towards protecting the environment and drive sustainability as clothing industry has been identified as
one of the biggest threats in the sustainability process. Therefore, in order to sustain in the long run
ODEL needs to adapt the sustainable practices and hence will be moving towards the production of
organic clothing. While globally, consumers are moving towards this concept in Sri Lanka, none of the
31
clothing merchants have shifted towards this trend. Therefore, in order to optimise the first mover
advantage ODEL will need to implement the new practice while the organisation itself should move
towards a sustainable culture.
In order to implement the change strategy Kotter’s 8 step change management model will be
implemented.
Table 12:Change management
Change Management Step Description

(8 steps)
Create a sense of urgency  The culture of innovation should be at the core and the senior
management should drive urgency towards adapting an innovative
mindset while creating a culture of innovation for staff members
to easily fit in to the new culture.
Build a powerful coalition  A change management team should be formed and should have
the vision to embed the innovative culture in ODEL.
 Create an open communication culture with staff to identify the
feedback and any barriers and criticism for the change
implementation project.
Developing a strategic vision  The strategic vision of ODEL should be recreated to include the
innovative culture of ODEL.
 Based on same forming a new strategic intent for ODEL will drive
the importance of innovation through sustainability among all
stakeholders.
Communicate the vision  Effective communication through a systematic marketing plan will
drive the message internally.
 Awareness of the importance of the new vision will create the
basis for the employees to understand the requirement of the
change management implementation.
Remove obstacles  Barriers to innovation should be identified and same should be
eliminated to support the innovations.
 The change management team should be at the forefront to
identify these at the inception and implement an action plan to
eliminate them.
Create short term wins  Set short term KPI’s and celebrate these wins with staff members.
For example, identifying the employee of the month who sold
more of the organic T shirts
Build on change  Measure the results and the progress and driving continuous
improvement is the key for the change implementation.
Build change in corporate  In order to optimise on the change implementation employees
culture should adopt and willingly drive the innovative ideas.
 Setting up the platform to build change within the corporate is
necessary.
32
3.3.1 Barriers, benefits and challenges when implementing a change strategy

Table 13 : Barriers and challenges
Potential Barriers/ Impact on innovation

Benefits
Technical Know- The technical know-how in terms of the machinery and staff skills is one of the
how more prevalent barriers for the innovation. However, ODEL can collaborate
with global partner chains to leverage on this area to overcome the given
barrier.
Organisational The structure of the organisation is another key barrier as the senior
structure management team is at the forefront and middle management acceptability is
somewhat dull. However, with the proper implementation plans and a clear
vision for the need for change is the only pathway to overcome this barrier.
Move towards One of the key benefits of moving towards sustainability for ODEL is the ability
sustainability to balance the Triple Bottom Line. ODEL will be able to balance the planet
aspect and be a driving force in changing the industry towards sustainability
options.
3.3.2 Strategy evaluation - FSA model by Johnson and Scholes
Table 14 :Strategic Evaluation FSA model
FSA Factor Evaluation

Feasibility A key step for ODEL in implementing the new clothing line is the technological
and raw material sourcing requirement. However, ODEL can look at innovative
farming methods such as vertical farming to obtain organically grown cotton
for the purpose of this implementation. Moreover, importing the required
technological know-how can be executed therefore, this innovation is a
feasible option.
Suitability With the given customer change behaviour this innovation is much needed.
When analysing ODEL and the suitability for the company, it can be noted that
ODEL is already implementing the innovations in the fast fashion industry
hence this innovation is suitable in order to achieve the long-term objectives.
Acceptability As this innovation is the stepping stone in the sustainability path and shifting
towards this innovation will be a key in the long run the acceptability of the
shareholders and the senior management is a must. With the given change
management program implementing and obtaining the buy-in from employees
will be key while the target consumers will be able to meet an unmet need in
them.
33
Appendix 1 – PESTEL
Table 15:Pestel Analysis
PEST factor Implication to Commercial Bank Level of

O/T
Impact
Political 2020 has faced high level of political impact due to the global
pandemic. Therefore, the President has decided to halt the
imports to the country in order to give a boost to the local
industry. A high level of importance was given to locally
O High
made clothing such as Batiks and Handloom. This will be an
opportunity for ODEL to introduce the locally made organic
clothing line as the government provides subsidies for the
locally made clothing.
Economic A global recession has been declared by the IMF as a result of
the global pandemic which is ongoing at the moment. The
impact of the global recession is currently impacting the local
markets and the negative impact on businesses are expected T Medium
to continue until 2021 and beyond. This has also resulted in
unemployment and consumers reducing non-essential
purchases.
Social Changing consumer online behaviour is significantly visible
through the use of eCommerce platform usage. Internet
penetration at 10 million (47% of the total population) and O High
Increased mobile penetration which is at 31.8 Million users
(149% of the total population).
Technological Due to the increase in information, big data analytics can be
used to better target the consumers. Moreover,
technological equipment designed to ensure the quality of
the clothes and which are user friendly for the organic
O Medium
clothing can be seen in the industry. Moreover, use of social
media and eCommerce platforms provide ODEL with
opportunities to reach the key customer segments which
yields a better ROI and are effective.
Environment The fashion industry and the pollution and wastage created
by the industry has impacted the reputation and consumers
are moving away from fast fashion items. Therefore,
sustainability and environmentally friendly clothes and
T High
manufacturing processes should be adopted in order to
thrive in the given market. Additionally, waste disposal is
another threat which has been identified and organisations
should take innovative measures to tackle this problem.
Legal The constant changes in the regulations and the tax systems
impacts the clothing industry. Additionally, the taxes levied
T Medium
on environmental pollution too has impacted the industry
due to the improper waste disposal methods.
34
Appendix 2 – Porters 5 Forces analysis
Table 16:Porters 5 Forces analysis
Force Description Impact

Threat of new entrants Low barriers of entry has created a highly fragmented clothing industry High
market. Moreover, the industry expands as a global marketplace
where consumers are freely obtaining products locally and globally.
However, ODEL is able to leverage on the strong brand name which has
been able to stay on top despite the high levels of new entrants.
Threat of substitutes The substitutes are low in numbers however product enhancements Low
are common in the industry.
Bargaining power of the The international franchise operation has been able to reduce the Low
buyers bargaining power of the customers are these products are not
available locally in order places. ODEL has been leveraging on this
aspect the maintain the bargaining power of consumers
Bargaining power of the Due to the sales volumes which are generated at ODEL and the brand Low -
suppliers name has been one of the key reasons to manage the bargaining moderate
power of suppliers. However, over time this may change and will have
a significant impact on ode
Rivalry among the The level of competition is at extreme levels where consumers are able High
existing players to purchase the branded items through online platforms at a lower or
same level. Moreover, small scale home entrepreneurs too have
entered the market creating a wider choice for the consumer however
impacting the existing players.
35
Appendix 3 – Competitor Analysis
Table 17:Competitor Analysis
Critical Success Factor ODEL = 26 No Limit = 23 Cool Planet = 20

Brand Image 1 2 3 4 1 2 3 4 1 2 3 4
Market Share 1 2 3 4 1 2 3 4 1 2 3 4
Product satisfaction 1 2 3 4 1 2 3 4 1 2 3 4
Customer Satisfaction 1 2 3 4 1 2 3 4 1 2 3 4
Service Quality 1 2 3 4 1 2 3 4 1 2 3 4
Product portfolio range 1 2 3 4 1 2 3 4 1 2 3 4
Digital presence & activities 1 2 3 4 1 2 3 4 1 2 3 4
Market Position 1 2 3 4 1 2 3 4 1 2 3 4
36
Appendix 4 – McKinseys 7 S
Table 18:McKinseys 7 S
Stories Strong legacy for company which started in the 90’s and founded by a
woman entrepreneur who changed the industry standards and today has
over 1200+ employees
Symbols Head office in the heart of Colombo with an iconic building. The logo is
widely identified by the existing and potential customers. Strategic brand
partnerships with foreign designer brands have created an edge for the
ODEL brand
Power Structures Decision are made at top level, hierarchical structures after the merger
with Softlogic group. The drive has been changed from innovation to
more ROI driven initiatives
Organizational Structure Centralized control system with limited control given to the other outlets
Control Systems Power lies with the manager and lower level employees are not
empowered to take decisions
Routines & Rituals Planning and organising for the following year, team activities
Paradigm Innovative approaches and strategic partnerships have positioned the
brand as a premium brand in the industry. Acts as a corporate social
responsibility partner by contributing towards the society and
environment
37
Appendix 5 – Stakeholder Analysis
Table 19:Stakeholder Analysis
Stakeholder Expectation Power Interest

Internal Employees Benefits, recognition and rewards, job security,
L H
Senior Management fair wages, better working conditions.
Connecte Shareholders Capital growth, dividends, return on tangible
d equity, continuous growth, maximise profits H H
and the focus on net operating income
Vendors Continuation on strategic partnerships, CRM
data, opportunities for innovation, focus on L H
organic clothing
Customers Organic clothing, quality of clothing assurance,
clothes which are less harmful to the M H
environment.
External Government and Compliant frameworks, transparency, tax
H H
regulators income
Society Corporate social responsibility, employment,
environmentally friendly practices, low L L
wastage, sustainable products
38
Appendix 6 – Gantt chart on time line
Table 20:Gantt chart on time line
Activity Budget Q Q Q Q Q Q Q Q4
1 2 3 4 1 2 3
2021 2022
Idea Generation Rs. 850,000
Quantitative qualitative research
Idea Screening and finalizing
Senior Management approval
Design Process
Developing prototype Rs.600,000
Testing and feedback Rs.400,000
Sharing the results for final approval 0
Set KPI’s 0
Training and development Rs.250,000
Create Marketing Campaign Rs.2,500,000
Launch the final product to the market Rs.1,000,000
Analyze effectiveness Rs.100,000
Total Budget Rs.5,700,000
39
Reference
1. Blank, S., (2019), McKinsey’s Three Horizons Model Defined Innovation for Years. Here’s Why It
No Longer Applies, Harvard Business Review, https://hbr.org/2019/02/mckinseys-three-
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November 2020]
2. Clayton M. Christensen, 2008, Disrupting Class: How Disruptive Innovation Will Change the Way
the World Learns, New York: McGraw-Hill
3. Drummond, G., Ensor, J. & Ashford, R., (2008) Strategic Marketing: Planning and Control, 3 rd ed.,
p.96, Elsevier, USA
4. De Koning, A., & Muzyka, D. (1999). Conceptualizing opportunity recognition as a socio-cognitive

process. Centre for Advanced Studies in Leadership, Stockholm.
5. Demand for organic cotton apparel

https://www.ftc.gov/system/files/documents/public_events/975753/hustvedt_et_al_on_consu
mer_likelihood_2009.pdf [Accessed on 1 November 2020]
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new-rich-investment-trends-to-act-on-today/[Accessed on 15 October 2020]
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pager.pdf [Accessed on 29 October 2020]
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and self-identify, Journal of fashion marketing and management, DOI:
10.1108/13612020910939879
9. Gaglio, C.M. (2004). The role of mental simulations and counterfactual thinking in the
opportunity identification process. Entrepreneurship Theory and Practice, 28(6), 533-552.
10. Hills, G. E. (1995). Opportunity recognition by successful entrepreneurs: A pilot study. Frontiers

of Entrepreneurship Research, 15, 105-117.
11. Horizon Scanning: A Practitioner’s Guide Produced by the Innovation Special Interest Group of
the Institute of Risk Management
12. Khin, S. & Lim, T. H., 2018, Entrepreneurial Opportunity Recognition, Exploitation and New
Venture Success: Moderating Role of Prior Market and Technology Knowledge, International
Journal of Entrepreneurship, Vol 22, (Print ISSN: 1099-9264; Online ISSN: 1939-4675),
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13. McKinsey Survey

14. https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/fashions
%20new%20must%20have%20sustainable%20sourcing%20at%20scale/fashions-new-must-
have-sustainable-sourcing-at-scale-vf.ashx[Accessed on 20 October 2020]
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publishing, USA, ISBN: 978 1 84376 680 3
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[Accessed on 15 October 2020]
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https://internetretailing.net/sustainability/sustainability/consumers-demand-sustainable-
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41

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CREATING ENTREPRENEURIAL CHANGE

STUDENT ID: XXXXXXXX

3.3.2 Strategy evaluation - FSA model by Johnson and Scholes............................................................31

1.0 Briefing Paper

Prepared for: The Senior Management team of ODEL

Prepared by: XXXXXX

Date: 5 November 2020

1.1 Company Background of ODEL PLC

1.1.1 Products and services

1.1.2 Customer base and the key customer segment

Young Adults – Gen Z Mass Affluent Affluent

1.1.3 Key competitors

The current market share is highly fragmented with

High Key Player Keep Satisfied

1.1.5 New product development at ODEL

The company performance of last 3 years reflects that

Table 2 :Macro environmental aspects Social factors

PESTEL Implication to ODEL Illustration

Social Changing consumer behaviour has been reflected

Table 3:Macro environmental : Environmental factors

PESTEL Factor Implication to ODEL Illustration

Growing interest in ethical fashion has

Innovative Website Mobile App Mobile App for Website

practice loyalty customers

enhancing the introduced in while the mobile improve in order

Prepared for: The Senior Management team of ODEL

Prepared by: XXXXXX

Date: 5 November 2020

2.0 Entrepreneurial Innovation - Report

Prepared for: The Senior Management team of ODEL

Prepared by: XXXXXX

Date: 7 November 2020

Subject: Conducting an innovation audit to critically analyse the ODEL’s innovation

2.1 Innovation Audit of ODEL to implement a new clothing line

2.1.1 Innovation Audit (Drummond & Ensor, 1999)

Odel's Organisational Evaluating current Reviewing policies balance of Senior

Figure 5:Innovation Audit

Table 5:Innovation Audit

Element Current situation Innovation Rank (1-5)

2.1.2 McKinsey’s 7S Framework to assess organisational culture

S Factor Description Rating (1-5)

 In order to achieve the desired strategy creative destruction

SM1 SM2 SM3 SM4 SM5 SM6

SM7 SM8 SM9 SM10 SM11

Systems  Effective customer relationship management system and 2 5

alliances with third parties should be optimised to create a

Figure 6:Value Creation model

2.2.1 Innovation Process

NPD Phase Current practices at ODEL Probability Rank (1-5)

Figure 7:Innovation Process

Principle Description Innovation Rating

willing to incur in order to move in the

2.2.3 Opportunity recognition for new product development

1. Sustainability clothing change

2. Minimalist clothing trends

3. Moving from fast fashion to slow fashion

4. AI production with seamless work flows

2.2.4 Identify opportunities for innovation within the organisation

Figure 9:Horizon Scanning

 The Gen Z consumers who are more

2.2.4.2. Mind Map for ODEL clothing

Delivery Channel Technology