R&D & Innovation Flashcards
whats innovation
coming up with the ideas and bringing them to market
introducing a new idea/method of production/new equipment into the production process
- a new/better idea that can
= lead to productivity increase
=raching market needs - will come about AFTER R+D through employee suggestion/problem solving in the production process
whats research + development
where the money is - testing + improving
essential for many businesses (particularly in a highly competitive/technical market)
^^^ phones/drugs/airplanes spend lots on R+D to beat competition
R+D importance has grown because of globalisation incease
lots of money is spent on R+D for global competitive markets to gain technological advancements
why do R+D and innovation
- launch new products successfully to ensure they meet customer needs
- to examnine + improve the production process and its efficiency
- to explore alternative (greener/cheaper) materials to produce goods
- reduce amount of waste generated in the producion process
- to gain competitive advantage - decreased efficiency, profitability, demand for products
whats product innovation
introducing a new/better product to market > brand new or revised
whats process innovation
new ways of doing things > more environmentally friendly
introducing a new production process involving improving productivity + lowering costs OR producing improvements to the original product/produces an entirely new product
R+D aims
- explores alternative materials to produce goods
- aims to reduce production waste
- looks at how to improve production + efficiency
- launch them successfully to meet consumer needs
R+D problems
COST
-expensive depending on the nature of the product
RISK
- no guarantee of success from investing
- cost without any revenue to cover these costs i.e. high cost cancer drugs
COPYING FROM OTHER BUSINESSES
- if its successful, copying initiatives from competitiors can happen
- patents on research dont last forever so not protected forever
- competition able to charge less as they havent got to cover R+D costs in price
LIMITED PROTECTION OF NEW IDEAS
- copying and patents
RAPID CHANGES IN TECHNOLOGY
- hard to keep up with the market without R+D
CONSTANT CHANGES IRRITATING CUSTOMERS
- old parts and accessories unavailable
- forced to update product
TECHNOLOGICAL CHANGES
- advanced communications means changes to wrokforces
SHIFT FROM LABOUR-INTENSIVE PROCESSES TO CAPITAL-INTENSIVE PROCESS = UNEMPLOYMENT
factors affecting R+D
- level of competition (pricing + international markets)
- product type (more sophisticated the more R+D is needed)
- external environment (fuel consumptions + lower carbon emissions)
- state of the economy (recession means business cut backs + less R+D)
- responding to a particular product (solutions for reducing costs)
the R+D and innovation process
1) idea
2) analysis + screening
3) development
4) value analysis
5) trial marketing
6) launch
1) idea
business comes up with new ideas, explored and develops existing ideas/modifies competitor’s ideas
news ideas coming from brainstorming, employee suggestions, reverse thinking or morphological study
new ideas also discovered through market research to find out what customers want
2) analysis and screening
the business wants to see if a product can be produced or sold at a profit
all aspects of the idea are investigated - where there is a potential market or where the technology/resources exist to develop it
whether a competitor has an existing patent on a similar idea at a stage a prototype may be developed to see what it’ll be like
3) development
R+D department develop a working prototype
test it scientifically, tweak the design and test ir functionally/aesthetically
4) value analysis
the business tries to make the prodcut good value for money - look at how the product is made/warehoused/distributed to make sure the whole process is efficient + value for money
5) trial marketing
business sometimes sells the item in a limited geographical area - then analyses customer feedback on the product, price and packaging
allows for modifications to be made before a wider launch
6) launch
a successful launch requires enough stock of the product to be distributed across the market
also needs effective advertising and promotional campaigns to persuade retailers and consumers to buy
