The creation of value through innovative

processes of digitalization in times of

crisis
–Covid 19-

Basma Chakir
Casablanca Higher School of Technology
Bachelor degree in accounting finance audit
Professional English
December 8, 2021
 Abstract
In today’s world, there’s new urgency to innovate as a matter of survival. While innovation has
long been an integral part of businesses, one of the facets of it, digitalization is changing the
very nature of the innovative process. Most importantly, it’s providing companies new
opportunities to evolve, avoid and overcome crisis and mainly to create value. In fact, remaining
profitable and competitive is essential for businesses. There are many challenges to achieving
the financial goals especially with the unprecedented impact of the COVID-19 pandemic on
these latter. In this research, my problematic revolves around the following question: How
business creates value through innovative processes of digitalization in time of crisis -Covid
19-? The focus is on highlighting the importance of innovative processes to keep up with the
constant change of the environment, also heightening the need of digitalization in order to
overcome business disruptions in which the real purpose is the creation of value. Central to
these affirmations is the case of Unilever, a consumer goods holding company headquartered
in the U.K that has shown resilience and agility throughout the pandemic thanks to digitalization
and innovating its way out of the Covid crisis by the adoption of e-commerce.

Keywords: Innovation, digitalization, business, business value, crisis.

 Introduction

To survive or grow, businesses must now be able to create value and innovate in all aspects of
their organization, especially in a constantly changing and unpredictable environment, it is
important for business leaders to foster a culture of innovation, digitalization, to encourage
agility and initiatives .These different actions must be deployed and coordinated by defining
and implementing a real innovation strategy.

In fact, in the complex context of business, innovation refers to the creation, development and
implementation of a new product, process or service, it has many facets each of which can look
quite different and can involve very different things with differing aims. One of them is
digitalization, which is defined in the same context as the use of digital technologies and of data
in order to improve business, replace/transform business processes, create an environment for
digital business and most importantly to create value which in the financial aspect it represents
an increase of the wealth of the managers and shareholders of a company through better
profitability. As a matter of fact, The COVID-19 crisis has heightened that a well-defined
innovative processes and a digitalization strategy allows you to overcome crisis and add value
to your business.

This topic falls within the scoop of my Bachelor's degree of the English language, the choice
and my interests in the topic are motivated by the need to understand how businesses create
value through innovative processes in the digitalization era as the Covid-19 pandemic started
to wreak havoc around the world. In fact, this accelerated adoption of certain innovative
processes raises the question of how this current wave of digital transformation will impact the
future of the business. Therefore, one of the fundamentals interests of this topic layers in given
my colleagues and other students a background discussion and a reference for upcoming
projects.

In order to answer the research question of this paper I deem it relevant to start with a theoretical
part in which I will proceed in defining the main concepts which are innovation and
digitalization, the second part is a discussion in which I highlight the importance and the need
of innovative processes of digitalization in order to create value in times of crisis –Covid 19-
.Finally, in order to concretely treat the research question, The third part is a case study of the
company Unilever.
 INNOVATION AND DIGITALIZATION
Section1: INNOVATION

1. Innovation: History

As with most concepts, the meaning of innovation has evolved over time. In fact, “Innovation”
was first a derogatory term. In the 13th century, the word “novation” appeared in legal texts as
a term for renewing a contract “renewing an obligation by changing a contract for a new debtor”
[1].

In the 16th-century religious environment, it gathered negative associations thrown at people

who sought to rewrite religious texts. Innovators were jailed and even put to death.

With the Industrial Revolution, the idea of innovation became associated with science, the
invention of new machines and products. As governments began to emphasize research labs
and patents as a source of economic advantage, innovators were elevated as positive
contributors. Change, once bad, was now good.

In the twentieth century the political scientist and sociologist Godin [1] argues that the meaning
of the term innovation has been a resolution between the two contrasting terms of imitation and
invention which have evolved through the centuries from ancient Greek philosophy. Invention,
Joseph Schumpeter argued, was the creation of something new (e.g., a new product), while
innovation related to the adoption of that new thing (e.g., the bringing of a new product to
market).

However, Imitation has been considered as invention at different points through history, during
the sixteenth and seventeenth centuries in England patents were given to importers of existing
inventions to stimulate economic growth instead of to inventors [2] [3] .

From the 1950s, the frequency of the term “invention” in texts began steadily declining as the
term “innovation” rose, and by the 1980s, “innovation” took the lead. In facts, Innovation was
seen in the mid twentieth century as an instrument of economic growth [4] and economic
survival for organizations” [5] [6]. By the late twentieth century the term innovation had
become entangled with advancement, technological change, social change and development
across many strands of knowledge, across society and personalized to the individual [1]. In the
twenty first century the term innovation signifies a myriad of meanings and concepts influenced
by different factors over the centuries and some of these definitions are looked at in the next
section.

2. Innovation: Definition

There are a significant number of definitions of innovation that are used across different fields
in academia, industry, government and service provision .For this Major paper, it is important
to have a definition of innovation that is suitable for the topic being undertaken. To do this,
different definitions of innovation in the literature has been examined to establish an
understanding of the components that make up the concept of innovation and specifically in
relation to business:

“In the complex context of business, an innovation is an idea that has been transformed
into practical reality. For a business, this is a product, process, or business concept, or
combinations that have been activated in the marketplace and produce new profits and
growth for the organization. I differentiate radical and disruptive innovation from the
incremental kind, since the latter can happen if the company is simply great at what it
already does. True innovation is far more than an extension of what is done normally,
and while being different, uses capabilities that exist in a company or are augmented by
strategic alliances. Therefore, something is an innovation not simply because it is new
to that company, but because it is simply new”

— Dr. Makarand “Chips” Chipalkatti, Osram Slyvania.

Concise an Innovation is the practical implementation of ideas that result in the introduction of
new goods or services or improvement in offering goods or services [7].

A well-defined innovation:

 Brings novelty: in the product, the service, the technology,the characteristics of the
offer and also internally at the levels of management, organization, distribution,
marketing, etc.
 Creates value: at economic, financial, strategic levels, for the efficiency of the
company’s internal processes, for the consumer, etc.
 Generates an undeniable gain (efficiency, time, sales, etc.)
Section 2: DIGITALIZATION

1. Digitalization: Definition

throughout history technological advances have reshaped how business is operated from the
first Industrial Revolution businesses are always challenged with adapting .Today the digital
revolution is reshaping the way businesses manufacture communicate and provide services and
products to their customers, our lives are becoming more and more guided by data, 94% of all
the world's information is digital.

Digitalization has been identified as the most significant technological trend that is changing
both, society and business [8] [9]. In fact, digitalization is the process that aims to transform an
object, tool, process or business into a computer code in order to replace it and make it more
efficient. The digital transformation began with appearance of internet, mail was replaced by
emails, fairs by web forums, stores by e-commerce sites. We are now experiencing a wider and
more efficient digitalization, such as automatic cash registers, automated answering machines
and communication via social networks. Digitalization has become a natural phenomenon that
combines the appearance of the Internet and the daily advances in computing.

To establish a deeper understanding of the term we suggest the following definitions:

“Digitalization is one of the most significant on-going transformation of contemporary

society and encompasses many elements of business and everyday life. Digitalization
refers both to a transformation from “analogue” to “digital” (e.g. a shift from cash to
electronic payments) and to the facilitation of new forms of value creation (e.g.
Accessibility, availability, and transparency) “[10].

-Hagberg et al, 2016

“Digitalization is defined as the use of digital technologies and of data in order to create
revenue, improve business, replace/transform business processes and create an
environment for digital business, whereby digital information is at the core”[11].

-Clerk, 2017.
 2. Digitalization: How to digitize your business

The customer relationship is one of the major axes of corporate digitalization. However, it must
be made clear that it must not be the only element to consider if you want to digitize your
business. The digital transition of the customer relationship mainly concerns the points of
contact. The goal is to make it easier for customers to reach you. Moreover, a digital company
must have a multi-media dialogue space that is accessible at all times, as well as an easy-to-use
customer space that gathers all the information shared between customers and the company.
The third pole of a company’s digitalization is database. The digitization of the data aims to
improve the management and exploitation of the data at the company’s disposal and those to
come. This is essential to evaluate the market positioning and also to optimize the marketing
strategy. In addition, to ensure the success of the digital transition, it is essential to properly
secure the data against potential disasters or computer crashes, protect access to the computer
servers, and to make sure of the use of appropriate programs to secure internal and external data
sharing.

Furthermore, the most indispensable tool for the digitalization of a company is a website. A site
that is very easy to access, fluid, pleasant to use, with an attractive design and especially visible
on the web, that is, well referenced on search engines and on social networks.

In addition to the website, we must also think about mobile, a widely used instrument for surfing
nowadays. The company can choose between developing a mobile-friendly website or creating
a mobile app for mobile users, or developing web apps that are a perfect combination of both.

Business software is also essential for the digitalization of a company. Customized to meet the
specific needs of companies, these software are designed to facilitate the daily life of your
employees. The importance of newsletters and landing pages, which have a crucial role to play
in the conversion of prospects, cannot be overlooked when we move to digitalization.
The creation of value through innovative processes of digitalization
in times of crisis –Covid 19-

Section 1: THE NEED OF INNOVATIVE PROCCES OF DIGITALIZATION

IN BUSINESS

1. The importance of business innovation

We know what happens when companies aren't innovative. They may have been industry
leaders decades ago, but their refusal to adapt to shifts in consumer behavior and technological
advances may turn companies into relics. To stand out in a crowded market, successful business
leaders require innovation to keep up with evolving demand and constant change of the
environment. This is the essential condition to boost its productivity and profitability but above
all to ensure its development and growth.

In fact, Innovation is an opportunity to reduce or stop waste, as well as an opportunity to put in

place a well-designed long-term strategy instead of responding to the various emergencies that
may arise. It’s about being proactive rather than reactive.

By choosing to innovate, the company anticipates any change that may arise in the market,
which allows it to be ahead of its competitors. We need to listen to the market, analyze trends
and data collected from customers, suppliers and partners. It is also important to keep an eye
on the activity of the competition and seize any opportunity that presents itself. It would be
useful to learn about the industry as a whole, whether nationally or internationally. Such an
approach makes it possible to develop new concepts and ideas, by probing what is happening
in the field of activity, even abroad.

Furthermore, innovation is what allows new revenue streams to flow across a constantly
evolving business landscape and increasing efficiency since having an efficient business model
is achievable with tech innovations. When business processes are streamlined with technology,
they are less expensive, save time, and more sustainable. These savings can be reinvested into
your company's growth or passed on to the customer, offering both an affordable and reliable
product.

Whereas, the decision of adopting innovative processes is made by the managers, it is best to
listen to the staff and involve the employees in product innovation, manufacturing processes
and operational efficiency. Their ideas can be a pillar for business development, while linking
a strong and rewarding relationship with them.

2. The importance of digitalization in business

Digitalization is one of the key success factors in almost all sectors of activity, particularly in
the sales of products and services. We note that all companies today turn to digital for a
thousand and one reasons.

Digitalization plays a key role in society, enabling the company to dematerialize its products
and services, expand its target and catchment area, understand its ecosystem and conduct
effective, sustainable and profitable marketing and sales actions. The importance of
digitalization is proven by the fact that it is a universal performance booster that remains within
everyone’s reach.

The importance of digitalization in the company’s activity is shown in the fact that
Digitalization brings the visibility of the company with the target, the potential target and also
with national and international partners. It opens doors and new opportunities for the company
to the international market, so that managers can develop their business and win new markets.
Digitalization saves time and money, and allows us to study the consumer’s behaviour in order
to present a seamless customer journey.

Promptly, Here are some of the benefits that digitalization can bring to your business:

 Employees work more efficiently through the dematerialization of internal services,

procedures and data;
 Digital enables faster access to critical data (all your files are grouped into one
application/site);
 Avoids certain errors since it is easier to detect and correct them;
 Faster and more efficient internal communication;
 The automation of repetitive tasks makes it possible to optimize working time and be
more productive. These factors result in improved working conditions for employees;
 It gives a modern image of your company, which attracts and retains customers;
 It allows you to increase your sales, according to the study «Profil du e-commerçant
2020 | Spécial PME» an e-commerce site would allow an increase in sales of the store
by 14% on average.
Section 2: THE CREATION OF VALUE THROUGH INNOVATIVE
PROCESSES IN TIMES OF CRISIS –Covid19-

1. Creation of value through innovation processes in the digitalization era

Remaining profitable and competitive is essential for businesses. There are many challenges to
achieving the financial goals. Value creation is about increasing the productivity of your
business to achieve profitability, so it goes hand in hand with the growth of your business.
Concretely, it is a set of levers that, properly operated, contribute to creating this value. So
what’s is value creation?

Value creation can cover several aspects, in the financial aspect it represents an increase of the
wealth of the managers and shareholders of a company through better profitability; whereas in
the marketing aspects it’s an increase of the psychological value of the products and services
offered to make them more and more attractive to customers. It is the entire experience that
must be optimized, which implies as much the quality of the products and services as the
methods implemented to ensure better customer satisfaction.

Value creation must be an integral part of the company’s strategy. The main interest, as we have
just seen, is to increase the profits of executives and the satisfaction of customers. Moreover,
the objective will be rather to create enough value, by operating a multitude of levers, to allow
the company to last over time and to impose itself in the face of competitors, crises and constant
changes in the environment.

Moreover, value creation takes various forms. It is not a question of taking a single action, but
of using all the relevant levers to improve the company’s profitability.

In fact, innovation can be a lever for value creation. Innovation and new technologies influence
consumer behaviour, their expectations change. Companies must adapt to these new needs in
order to remain competitive, but it is above all an opportunity for development to win new
customers, stand out from competitors and increase its turnover.

This may concern different axes:

 Internal to the company: new equipment to increase productivity and efficiency.

Technological innovations can concern the production chain, but also the organisation
 of the company itself, even in its offices, as with the automation of processes or the
development of new software.
 External to the company: like the Digitalization of sales outlets or customer service. We
will also think about the development of mobile applications that today have become
unavoidable, or the massive deployment of artificial intelligence.

Moreover, when it comes to innovation, it is essential during this era to talk about the lever of
digitalization since it is a major lever for value creation by optimizing the company’s processes.

Digitizing the company represents a considerable financial investment, but this plays a major
role in simplifying all the processes with a real saving of time and less errors .Also , it makes it
possible to keep a traceability since all data will be recorded and easily accessible. It is a real
help in making relevant decisions.

The lever of digitalization has other effects, which also has a major role in the creation of value,
since it directly impacts customer satisfaction:

For example, automated processes can reduce the time it takes to prepare and ship an order.

The data collected, when extended to the entire production chain, avoid losses, errors and delays
in orders, and thus generate a higher rate of customer satisfaction.

Centralizing the information facilitates access: when a consumer contacts the customer service,
for example, his request can be processed more quickly and efficiently, since all the information
concerning his order is accessible.

2. Innovative processes of digitalization in times of crisis – Covid 19-

In the fall of 2019, most of us would have scoffed at anyone predicting that the next months
would bring record-breaking unemployment levels, millions of shuttered businesses, the
cancellation or postponement of sporting events ranging from the Boston Marathon to the
Tokyo Olympics, and over 226M cases and 5M deaths worldwide in Yet, here we are, trying to
make sense of the effects of the COVID-19 pandemic that’s sweeping across the world.

For businesses, one consequence of the COVID-19 crisis has been a dramatic uptick in the use
of digitalization that help reduce face-to-face interactions and safeguard customer and
employee health and well-being. These digital transformation include consumer-facing
applications such as grocery and food delivery services, business-to-business e-commerce
applications, and applications such as videoconferencing that seem to have penetrated the
consumer, business, and not-for-profit worlds. Searches for terms such as “contactless”
increased 7x between November and late April 2019, while the stocks of technology companies
aligned with new-found customer health and safety concerns have skyrocketed.1

In fact, The COVID-19 crisis has heightened the import1ance of digitalization and served as an
accelerator of digital innovation. Firms have moved operations on line to remain in business
during lockdowns and overcome disruptions in supply chains, with online platforms playing an
instrumental role in connecting users to new markets, suppliers or resources. Smart working
solutions have bloomed with a view to tackling the almost total disappearance of face-to-face
and onsite business activities. In professional and consulting services, where onsite visits could
be an essential part of the job, the effects of social distancing have been sizeable. Early evidence
from business surveys conducted worldwide in the course of 2020 point to an estimate of up to
70% of businesses having intensified their use of digital technologies due to the COVID-19
pandemic. [12]

Case study: Unilever

Section1: The negative Impacts of Covid-19 on Unilever

Unilever is a consumer goods holding company headquartered in the U.K. The company was
founded in 1930 and became one of the oldest companies producing consumer goods in the
world. The company was started from the collaboration of Margarine Uni and Lever Brothers,
a British soap maker, to form a multinational company named Unilever to produce
numerous daily products through its subsidiaries. The company has created many product
brands including food and beverages, beauty and personal care, home care, cleaning agents,
personal care, refreshments, and more [12]. Unilever owns more than 400 brands in over 190
countries.[13] Its $15 billion worth top brands include Rexona, Knor, Lipton, Sunsilk, and
Dove, which expand 50% faster and more than 60% share of the company's total growth.

Following the outbreak of COVID-19, leading to unprecedented disruption worldwide. The

challenge was to evaluate potential losses and reforecast sales, and assess consumer and shopper

1 Amazon stock went from 1745.72 in November to 2764.41 in late June 2020. During this period, Zoom went
from 69.64 to 252.81, and Netflix went from 287.41 to 466.26.
behavior changes during and post COVID-19 for 6P optimization (place, product, proposition,
price, promotion, pack).

Unilever said the spread of Covid-19 has led to “extensive changes in the operating environment
in our markets”.

The lock-downs and restrictions that have been implemented in many countries have varied in
severity, but all have had some impact on consumer demand patterns and many have also had
a significant impact on the supply of goods widespread lock-downs have required closures in
out of home channels, resulting in little out of home consumption of ice cream and food. In fact,
foods & Refreshment underlying sales fell back 1.7%, with volumes down 1.8%.

The largest volume decline was in ice cream, as the seasonal sell-in for out of home
consumption in key markets such as Europe, Turkey and Latin America were heavily impacted
by lock-down measures and the reluctance of distributors to commit to buying ice cream stock
with an uncertain holiday and tourism season.

Unilever said there was also a sharp decline in food service, as restaurants in China and
elsewhere closed due to Covid-19 mitigation measures. This was offset by increased in-home
consumption and household stocking in some markets, particularly the USA and Europe.

Section2: Unilever ecommerce strategy during Covid 19

To innovate its way out of the Covid crisis, Unilever is making investment in connectivity,
Internet of Things (IoT), robotics, artificial intelligence (AI) and augmented reality (AR) to
connect its supply chain with partners and consumers.Unilever is driving digital through its
R&D organization, introducing new tools to increase the speed, efficiency and quality of
innovation processes. In fact unilever has automated over 700 processes in operations, saving
time and reducing cos. Its training programs are focusing on the digital up-skilling of people.

Actually Unilever focuses strategy on ecommerce as online sales grew by 61% in its latest
financial year in fact, Over 8% of Unilever’s sales are now made through e-commerce, up from
6% in 2019; and during the first half of 2020, and the company recorded e-commerce sales of
€2.2 billion, which compares to €3.12 billion for the whole of 2019.

The company’s VP of e-commerce, Claire Hennah, sees no reason for growth to fall to pre-
pandemic levels and, consequently, Unilever’s e-commerce strategy is evolving to cover tech
platforms, retailers and delivery apps.
The company also recently launched an online store, offering products direct to consumers,
which Hennah described as simply a way of offering more purchasing choice. “In the early
stages of lockdown, people wanted (home care) products that they couldn’t always get from the
place they usually go to.

Moreover, When Unilever bought snack subscription brand Graze in 2019, it said it planned to
use its technology and ecommerce expertise across its business. Now more Unilever brands are
selling their wares for home delivery. Ben & Jerrys launched ecommerce sales this year, while
shoppers can buy personalized jars of Marmite -as well as Marmite mugs and posters -on its
ecommerce shop.

To sum up, Unilever has shown resilience and agility throughout the pandemic thanks to
digitalization and specifically e-commerce. It is winning market share in more than 60% of its
business while setting “ambitious new targets” for its commitment to sustainability. They begin
the year in good shape and are confident in their ability to adapt to a rapidly changing
environment.

Today they are setting out plans to drive long term growth through the strategic choices of
digitalization, the business will invest about €1bn in 2022 and 2023 while volatility and
unpredictability will continue throughout 2023.
 Conclusion
There is no future in doing business in the same way as before the pandemic. There is a different
future, potentially a better future for everyone, and businesses have to ensure that their
innovations and the ways they innovate, see and grasp the opportunity it presents. In fact, the
global pandemic has shaken economies to their core, and showed the importance of
digitalization and innovative processes in order to create value in a constantly changing and
unpredictable environment. But innovation is never easy and if you want to make a major leap
forward, you need to understand that it’s a messy, unpredictable, serendipitous process.
Furthermore, it doesn’t matter if you are getting the ideas from outside the organization, through
brainstorming, combining of existing ideas, or radical new thinking within your field. But it
should be at the heart of your business and it should constantly be done to ensure business
survival taking into consideration that innovation is not necessary digitalization.
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