5.8 RESEARCH AND DEVELOPMENT

Question 1

Research and Development

Answer 1

A form of innovation directly associated with the technical development of existing products or processes, or the creation of new ones.

Question 2

Advantages of successful R&D

Answer 2

• Competitive advantages
• Extend life of an existing product
• Open up new markets
• Enhance the prestige of the company by being known as an innovator.
• Motivates workforce by designing new producing and appearing to be at the cutting edge of innovation
• Lead to improvement in quality
• Reduce costs

Question 3

Disadvantages of R&D

Answer 3

• May head in the wrong direction, a new product doesn’t necessarily mean there is a market for it
• Time consuming, the workforce is tied on a project for years with no ROI for the company.
• Can be very competitive
• There might be ethical issues involved, such as animal experiments for cosmetics

Question 4

Developing goods and services that address customers’ unmet needs

Answer 4

• If businesses fail to innovate, they may loose market share against competitors or new brands entering the market. Cash cows can become dogs.
• Allows the business to find gaps in the market or open un entirely new markets.
• However the marketing department and R&D should work together to make sure they are eeting needs. The marketing team acts as a guidance.

Question 5

Intellectual Property Rights

Answer 5

The rights given to persons over the creations of their minds. Their ownership by the business constitutes a valuable asset that needs to be protected so it doesn’t loose its edge and competition can’t develop identical products.

Question 6

Two Categories of Intellectual Property Rights

Answer 6

• Copyright: Copyright is a legal right granted to the creator of original works, such as writings, music, and art, which protects against unauthorized use or reproduction. It gives the copyright holder exclusive control over the reproduction, distribution, and adaptation of their work, for a given period of time.
• Industrial property (trademarks and patents): The protection of distinctive signs which distinguish a business from its competitors such as a logo. Ensures fair competition and safeguard consumers.

Question 7

Patents

Answer 7

Once patents are bought, it gives the business undisputed rights to exclude anyone else from making the product exactly to the specifications laid down in the patent, usually for a period up to 20 years. Patents can be renewed.

They don’t stop anyone from making similar products, but it gives an inventor first mover advantages in the sector.

Question 8

Trademarks

Answer 8

There are conventional and non-conventional. Conventional: logos, slogans, designs. Non-conventional: qualities that are distinctive to the design of something.

Question 9

IP rights help ensure that the business can:

Answer 9

• Have first-mover advantages
• Increase profit margins
• Safeguard continuity of production
• Develop brand loyalty
• Have time to develop new products
• Financially benefit from its creativty, innovation, and R&D

Question 10

Two main types of innovation:

Answer 10

• Product innovation
• Process innovation

Question 11

Product Innovation

Answer 11

New products are created or improvements to existing products are made.

Question 12

Process Innovation

Answer 12

Some parts of the manufacturing or service delivery are improved.

Question 13

Adaptive Innovation

Answer 13

Starting point is an existing product or process, which is then adapted: not radical innovation, but gradual, incremental one.

Refers to the modification and improvement of existing products, services, or processes that enhance performance or efficiency without fundamentally changing the industry’s landscape.

Question 14

Disruptive Innovation

Answer 14

Refers to an innovation so important that it changes the industry itself.

Involves creating new markets and value networks that eventually disrupt existing ones, typically by introducing affordability and convenience where complexity and high cost previously prevailed.

Question 15

Factors Affecting R&D and Innovation

Answer 15

• Organizational Culture: If culture is low-risk, role-based, bureaucratic, innovation may be limited. Fear of failure overweights the rewards of success.
• Past Experience: A proven track record of innovative practices can help to develop the expectations for future change.

-The Pace of Change: Rapid technological advancements force companies to innovate quickly to stay relevant, shortening product lifecycles and increasing competitive pressure.

• The Level of Competition: Intense competition compels companies to innovate for differentiation and market share, while low competition might lessen the urgency to innovate.
• Finance: Adequate funding enables significant investment in R&D, propelling innovation; limited funds can restrict research capabilities and slow progress.
• HR: A skilled and creative workforce is crucial for innovation; a lack of talent can hinder the development of new ideas and technologies.
• Legal Constraints: Intellectual property laws and regulatory compliance can shape the direction of R&D, protecting inventors but also potentially limiting innovation.
• Ethical Concerns: Ethical standards in innovation impact public acceptance and compliance; neglecting these can risk legal issues and damage reputation.