5.8 (HL only) Flashcards
what is research and development?
Research and development (R&D) refers to the investigative activities a business conducts to improve existing products and procedures or to lead to the development of new products and procedures.
what happens if you dont have good reserch and development?
If businesses fail to invest in R&D the competition will overtake and outcompete them very quickly through numerous areas such as, consumer preference and costs savings.
R&D is not limited to product design but also how a product is made and how could it be developed.
how do you do development and reaserch?
There is no “single” way to conduct R&D, however it will require: planning, teamwork, communication and leadership
what are the benifits of reserch and development?
Growth opportunities
Increased productivity
Competitive advantage
Customer loyalty
Creation of jobs
Improved quality of life for customers
what are the disadvantages of reserch and development?
Expensive and time consuming
Requires skilled labour and capital
High failure rate
May be difficult to commercialize
Possible ethical considerations
what are unmet needs, how do firms learn about these needs, and is R and D product orinataed or market orinetated?
Consumers have needs that are unmet from the existing goods and services available on the market. Hence, businesses can find out about these unmet needs by usingmarket research.
Basically, firms use the information gathered by market research for its advantage hence the importance of communications between R&D and Marketing departments.
We already discussed the concept of market-led and product-led product development. Through R&D, business use its core competencies or skills and talent to create products that are noted through market research to be desirable or by creating a product or service that the consumer may not have known would be useful
what is it importnat to link reserch and devlopment with?
It is also important to relate marketing and R&D with the use of intellectual property rights to prevent the competition developing identical products.
Patents, Copyrights and Trademarks are key in this process which will help the business to…..?
Have first mover’s advantage
Increase profit margins
Safeguard continuity of production
Have time to develop new products
Financially benefit from its creativity, innovation and R&D
what is innovation?
Innovation can be defined as the commercial of a new idea in order to fulfil existing customer needs or to create an unmet customer wants (desires). Equally important, is to improve and existing product or idea.
Innovationalso refers to being able to bring your product to the market (otherwise it is just an invention sitting in your garage).
One of the goals of any business should be making everybody in the organization part of an innovation culture.
Even though all innovations are different, in business we can distinguish between two types of innovation, what are they?
Product innovation – a type of innovation where new products are created or improvements to existing products are made (i.e. iPod, Xbox, Microsoft, Sony’s Walkman, Kodak’s first digital cameras, etc.). Ideas for new products can come from the market or from the business itself. Additionally, Ideas for products can also come from slight or significant alterations or what the competitors produce.
Process innovation – a type of innovation where some parts of the manufacturing or service delivery are improved. Improvements are made through exhaustive and innovative studies and the outcome can be extremely beneficial
the types of innovation lead us to the following two categories of innovation, what are they?
Adaptive innovation and Disruptive innovation
expand on adaptive innovation?
is about making small adjustments and improvements to something that already exists, like a product or a process. Instead of completely changing it, you gradually tweak and enhance it over time. This could mean adding new features to a product or refining how a service is delivered.
These small changes are important because they help a business keep its customers happy and stay competitive. So, if a company doesn’t keep up with making these small improvements to their products or services, they could fall behind and lose customers to companies that do
exapand on disruptive innovation?
Disruptive innovation – refers to coming up with completely new and groundbreaking ideas or inventions that could completely transform industries. It is risky because there’s no guarantee of success, but if it works out, it can be incredibly rewarding.
Some examples of disruptive innovation are:
Email (1969), which totally changed the way in which people and businesses communicate.
Many factors can influence the R&D practices and strategies of an organizations, what are they?
Organizational culture – in an organization that is bureaucratic, has an autocratic approach and it is risk averse; innovation can be very difficult and is unlikely to happen. Conversely, democratic and collaborative organizational cultures are more risk takers and can appreciate R&D as a valuable resource.
Past experience – the firms uses “what has worked in the past” as an strategy for R&D.
Finance – since R&D is proved to be costly, the budget of the firm might or might not cover its costs.
Technology – this is a key factor for R&D since the use of Computer-assisted design (CAD) and the use of the Internet help immensely with the development of new ideas.
The pace of change – some industries are more responsive to changes than others. Some business may be more technological than others and that will affect their strategies and development of R&D.
The level of competition – the more competition there is in a market the more innovative for a firm to create a competitive edge through innovation.
HR – besides the financial costs, the availability of “skilled” workers to spend time in the project will have an effect in the firms HR.
