UNIVERSITY OF SOUTH AFRICA
College of Economic and Management Sciences
⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄⋄
MNE3703: Management of Innovation
Assignment 2 — Semester 1, 2026
⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄⋄
MNE3703
Module Code:
Management of Innovation
Module Name:
Assignment 2 — BrewBot Case Study
Assignment:
March 2026
Due Date:
Submitted in partial fulfilment of the requirements for MNE3703 — UNISA 2026
,UNISA | MNE3703 Innovation Management — BrewBot
Question 1: BrewBot Case Study Analysis
1.1 Product Innovation and Service Innovation Defined
Product innovation refers to the introduction of a new or significantly improved good, includ-
ing changes in technical specifications, components, materials, software, user-friendliness,
or other functional characteristics (OECD/Eurostat, 2018). It encompasses both entirely new
products and meaningful improvements to existing ones. Product innovation generates value
by offering customers something they could not previously obtain or by delivering familiar
benefits more effectively.
In the BrewBot case, the Smart Brews range is the primary example of product innovation.
BrewBot introduced a new line of coffee blends infused with adaptogens, developed in col-
laboration with local herbalists and nutritionists, tailored to distinct functional needs: energy,
focus, relaxation, and immunity (BrewBot case study, 2024). This is a textbook product in-
novation: a new good with distinctive functional characteristics not previously available in
BrewBot’s product portfolio.
Service innovation refers to the introduction of a new or significantly improved service, includ-
ing changes in how services are delivered, the channels through which they are offered, or
the way in which they are personalised to individual customers (Tidd and Bessant, 2021). Ser-
vice innovation often involves changes to the customer experience rather than to a physical
product.
BrewBot’s AI-powered personalisation app is the primary service innovation. The app rec-
ommends drinks based on mood, weather, and purchase history; allows pre-ordering; tracks
loyalty points; and offers virtual barista consultations (BrewBot case study, 2024). Each of
these features changes how BrewBot delivers its service, making the interaction more person-
alised, convenient, and continuous than a traditional in-store visit.
Key Distinction
Product innovation vs service innovation: Product innovation changes what a busi-
ness offers. Service innovation changes how it is offered and experienced. Brew-
Bot pursued both simultaneously: Smart Brews changed the product, while the app
changed the delivery and personalisation of every product in the range.
Page 2 of 17
, UNISA | MNE3703 Innovation Management — BrewBot
1.2 How BrewBot Benefited from Combining Product and Service Innovations
Increased customer retention through a reinforcing value proposition: Combining a dis-
tinctive product with a personalised service delivery mechanism creates a compound value
proposition that is much harder for competitors to replicate than either element alone. A
customer who enjoys the Smart Brews range and also relies on the app for personalised
recommendations, loyalty rewards, and pre-ordering has two separate reasons to return to
BrewBot, and the cost of switching to a competitor is higher because they would lose both
the product and the accumulated app data that tailors their experience. This compounding
effect explains the 25% increase in customer retention observed within six months (BrewBot
case study, 2024).
Data-driven product refinement: The service innovation (the app) generates real-time data
about which Smart Brews products are most popular across different moods, weather con-
ditions, and customer segments. This data feeds back into the product innovation cycle,
allowing BrewBot to refine existing blends, discontinue underperformers, and identify gaps
for new products with greater confidence than traditional market research would provide. The
combination of product and service innovation therefore creates a self-improving system
rather than a one-time product launch (Tidd and Bessant, 2021).
3.3 The Biggest Challenge from the Traditional Customer Base
The biggest challenge BrewBot encountered was the alienation of traditional customers
who felt excluded by the technology-heavy approach. These customers, accustomed to a
straightforward in-store experience characterised by personal interaction with baristas and a
familiar product menu, found the AI app-driven model disorienting and impersonal (BrewBot
case study, 2024). The case study notes that this resulted in some of these customers losing
loyalty points, which suggests they were not engaging with the app at all, and were therefore
excluded from the loyalty programme in practice, regardless of whether they were excluded
by design.
This is a common tension in service innovation: digital channels can deliver significant ef-
ficiency and personalisation gains for tech-comfortable users, but they simultaneously cre-
ate friction for users who are less digitally engaged or who simply prefer human interaction.
BrewBot’s failure to provide a parallel non-digital engagement pathway for traditional cus-
tomers represents a gap in its implementation strategy.
Page 3 of 17
College of Economic and Management Sciences
⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄⋄
MNE3703: Management of Innovation
Assignment 2 — Semester 1, 2026
⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄⋄
MNE3703
Module Code:
Management of Innovation
Module Name:
Assignment 2 — BrewBot Case Study
Assignment:
March 2026
Due Date:
Submitted in partial fulfilment of the requirements for MNE3703 — UNISA 2026
,UNISA | MNE3703 Innovation Management — BrewBot
Question 1: BrewBot Case Study Analysis
1.1 Product Innovation and Service Innovation Defined
Product innovation refers to the introduction of a new or significantly improved good, includ-
ing changes in technical specifications, components, materials, software, user-friendliness,
or other functional characteristics (OECD/Eurostat, 2018). It encompasses both entirely new
products and meaningful improvements to existing ones. Product innovation generates value
by offering customers something they could not previously obtain or by delivering familiar
benefits more effectively.
In the BrewBot case, the Smart Brews range is the primary example of product innovation.
BrewBot introduced a new line of coffee blends infused with adaptogens, developed in col-
laboration with local herbalists and nutritionists, tailored to distinct functional needs: energy,
focus, relaxation, and immunity (BrewBot case study, 2024). This is a textbook product in-
novation: a new good with distinctive functional characteristics not previously available in
BrewBot’s product portfolio.
Service innovation refers to the introduction of a new or significantly improved service, includ-
ing changes in how services are delivered, the channels through which they are offered, or
the way in which they are personalised to individual customers (Tidd and Bessant, 2021). Ser-
vice innovation often involves changes to the customer experience rather than to a physical
product.
BrewBot’s AI-powered personalisation app is the primary service innovation. The app rec-
ommends drinks based on mood, weather, and purchase history; allows pre-ordering; tracks
loyalty points; and offers virtual barista consultations (BrewBot case study, 2024). Each of
these features changes how BrewBot delivers its service, making the interaction more person-
alised, convenient, and continuous than a traditional in-store visit.
Key Distinction
Product innovation vs service innovation: Product innovation changes what a busi-
ness offers. Service innovation changes how it is offered and experienced. Brew-
Bot pursued both simultaneously: Smart Brews changed the product, while the app
changed the delivery and personalisation of every product in the range.
Page 2 of 17
, UNISA | MNE3703 Innovation Management — BrewBot
1.2 How BrewBot Benefited from Combining Product and Service Innovations
Increased customer retention through a reinforcing value proposition: Combining a dis-
tinctive product with a personalised service delivery mechanism creates a compound value
proposition that is much harder for competitors to replicate than either element alone. A
customer who enjoys the Smart Brews range and also relies on the app for personalised
recommendations, loyalty rewards, and pre-ordering has two separate reasons to return to
BrewBot, and the cost of switching to a competitor is higher because they would lose both
the product and the accumulated app data that tailors their experience. This compounding
effect explains the 25% increase in customer retention observed within six months (BrewBot
case study, 2024).
Data-driven product refinement: The service innovation (the app) generates real-time data
about which Smart Brews products are most popular across different moods, weather con-
ditions, and customer segments. This data feeds back into the product innovation cycle,
allowing BrewBot to refine existing blends, discontinue underperformers, and identify gaps
for new products with greater confidence than traditional market research would provide. The
combination of product and service innovation therefore creates a self-improving system
rather than a one-time product launch (Tidd and Bessant, 2021).
3.3 The Biggest Challenge from the Traditional Customer Base
The biggest challenge BrewBot encountered was the alienation of traditional customers
who felt excluded by the technology-heavy approach. These customers, accustomed to a
straightforward in-store experience characterised by personal interaction with baristas and a
familiar product menu, found the AI app-driven model disorienting and impersonal (BrewBot
case study, 2024). The case study notes that this resulted in some of these customers losing
loyalty points, which suggests they were not engaging with the app at all, and were therefore
excluded from the loyalty programme in practice, regardless of whether they were excluded
by design.
This is a common tension in service innovation: digital channels can deliver significant ef-
ficiency and personalisation gains for tech-comfortable users, but they simultaneously cre-
ate friction for users who are less digitally engaged or who simply prefer human interaction.
BrewBot’s failure to provide a parallel non-digital engagement pathway for traditional cus-
tomers represents a gap in its implementation strategy.
Page 3 of 17
