5.8 Research & Development

Question 1

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Research and Development

Answer 1

the scientific research and technical development of new products and processes
may involve:
* creating new product
* updating products
* new methods of doing things
* creation of new industries

Question 2

why R&D is important

Answer 2

advantage over competitors
* more desirable products

meet consumers’ unmet needs
* e.g. through market research

customer loyalty
* brand image and publicity

higher prices (less price sensitivity)
* e.g. allow premium price

creates property rights
* intangible assets
* could potentially sell these

lower costs of production
* e.g. more efficient ways of production

Question 3

incremental innovation

Answer 3

when the innovations are relatively small and the updated product is a small improvement on the previous version

Question 4

disruptive innovation

Answer 4

when the innovation is much larger and can create a new product or market

Question 5

intellectual property rights (IPR)

Answer 5

legal rights assigned to the owners of works related to human creativity

Question 6

patent

Answer 6

IPR relating to inventions
stops anyone else making use of the innovation

Question 7

trademark

Answer 7

IPR relating to brand, image, logos, name
stops anyone using these

Question 9

Copyright

Answer 9

IPR relating to artists, writers and musicians
stops anyone using their work

Question 10

factors that may infleunce research and development

Answer 10

• nature of the industry
• organizational culture - might take years to see the benefits of R&D
• access to finance