Research and development

The importance of research and development
1. research and development is a form of innovation directly associated with the technical development of existing products or processes, or the creation of new ones
2. large businesses spend vast sums of money on R and D
3. R and D is important in all industries from pharmacies to household goods
4. R and D is important because it can help extend the product life cycle by developing new ways to use existing products or by indicating new strategic directions for the company
5. there is no one single way to conduct R and D, but to be at its most effective R and D requires good planning, teamwork , communication and leadership.
6. there are many number of stages between thinking of an idea and launching a product
Steps:
1. think of an idea—concept test—research the market—cost the idea—build the prototype—carry out a test launch—launch—review
2. this process can take a long time for example up to 15 years for a new drug in pharmacy
3. many ideas do not get to the production stage because it is too costly or the market does not seem large enough
Advantages of R and D
1. gives the business a competitive advantage
2. extends the life of an existing product
3. opens up new markets
4. enhances the prestige of the company
5. motivate the workforce
6. leads to improvements in quality
7. reduce costs
Disadvantages of R and D
1. there may be opportunity costs
2. R and D may be in the wrong directly
3. R and D is time consuming— the R and D workforce is tied to a project for years for the company during the time
4. R and D can be fiercely competitive
5. R and D can become bureaucratic and non-productive
6. there may be ethical issues involved
Marketing aspects of R and D
1. innovation is essential for any business
2. quality can be improved through methods such as Kaizen or approaches such as TQM, but most businesses do not simply develop a product and then leave it unchanged for ever.
3. if business fails to innovate, they may lose market share against existing competitors who innovate, or against new entrants with refreshing ideas and new products or services
4. in the Boston matrix of their product portfolio their ‘cash cows’ may become ‘dogs’
5. R and D can also allow the business to find gaps in existing markets, or to open up new markets entirely
6. it is also important to develop goods and services that address customers’ unmet needs, which is why the marketing department and the R and D department should work together
7. this information can then help the R and D department develop the items for which there is a market demand
8. the absence of a dialogue between the marketing and R and D could have unfortunate, costly consequences
9. this is a key premise of market orientation, as opposed to product orientation
10. marketing and R and D also overlap on the important issue of intellectual property rights
11. those property rights fall into different categories: patents, copyrights, and trademarks
12. their ownership by the business constitutes a valuable asset that needs to be protected; without this protection, the business could lose its edge and the competition may be able to develop identical products
Patents
1. when individuals or businesses invent products or production processes, they should take out a patent to protect their idea
2. once the patent has been bought, it gives the individuals or businesses undisputed rights to exclude anyone else from making the product exactly to the specifications laid down in the patent, usually for a period of up to 20 years
3. after that time, the individuals or business can of course renew the patent
4. a patent on one product does not stop anyone producing similar products, but they must not be exactly the same
Copyrights
1. copyright is similar to a patent
2. it originally applied to written material but has now been extended to cover other artistic forms of media presentations such as cartoons, music and films
3. the individual or business is protected for a period of time from the unlawful copyright of the material
4. nowadays,s it has become a major source of concern for major records companies and film procures, especially with the introduction of file-sharing sites on the internet
Trademarks
1. a final form of intellectual property rights is that of trademarks
2. conventional trademarks include logos, slogans, design, and phrases
3. these are split into two general forms
4. there are non-conventional trademarks, which are qualities that are distinctive to the design
All these intellectual property rights help to ensure that the business can:
1. have first mover advantage
2. increase profit margins
3. safeguard continuity of production
4. develop brand loyalty
5. have time to develop new products
6. financially benefit form tis creativity, innovation and R and D.
Types of innovation
1. although all innovations are different, it is possible to distinguish between types of innovation
2. the two types of innovations that are the easiest to understand are about the product itself (product innovation) and (process innovation)
3. Product innovation
  1. a type of innovation when new products are created, or improvements to existing products are made
  2. example: tv to flatscreen tv
4. Process innovation
  1. a type of innovation where some parts of the manufacturing or service delivery are improved
  2. example: JIT system
  3. if it is services, it can involve both types of innovation
  4. example: e-commerce, the ability for customers to track online the progress and location of an item they have purchased
  5. the others refers to the impact the new product or service may have on the whole industry and is called ‘paradigm innovation’
5. Positioning innovation
  1. refers to the use or perception of a new product or service
  2. the word positioning means (the marketing sense, in relationship to competitors) as with a product position map
  3. the focus is on the business environment and the competitive context
6. Paradigm innovation
  1. refers to an innovation so important that it may change the industry itself
  2. the focus is on the impacts, both short and long term of the new product or services
Forms of creativity
1. faced with a new situation or an unknown problem you could apply methods and approaches that you have used before, or try new methods and new ways of thinking
2. the type of creativity is adaptive creativity and innovative creativity
3. one form is not better than the other- they are complementary
4. they correspond to different creative styles some people tend to display an adaptive style of creativity and others an innovative style of creativity
5. Adaptive creativity
  1. a form of creativity that transfers and applies existing forms of thinking and problem solving to new scenarios or different solutions
6. Innovative creativity
  1. a form of creativity that generates new forms of thinking, addressing problems form an unusual perspective
7. Characteristics of adaptive style of creativity
  1. takes a disciplinary approach
  2. shows systematic, linear thinking
  3. needs more structure
  4. prefers incremental changes
  5. solves problems by adapting, refining and improving the current paradigm
  6. thinks ‘inside the box’
Characteristics of innovative style of creativity
1. takes a interdisciplinary approach
2. shows divergent thinking
3. needs less structure
4. prefers radical changes
5. solves problems by breaking, modifying, and replacing the current paradigm
6. thinks ‘outside the box’
Factors affecting R and D
1. many factors affect the ability of an individual, a team, or a business to innovate successfully
2. organisational structure
  1. if an organisation has a rather low-risk, role-based, bureaucratic or autocratic culture, innovation may then be very limited
  2. the fear of failure can outweigh the rewards of success, on the other hand, democratic or collaborative organisational cultures may foster risk taking and view creative input as a valuable resource
3. Past experience
  1. a proven track record of innovative practices can help develop the expectations for future changes and can act as an archive of ‘what has worked in the past’
  2. it shapes and frames the R and D strategy of the organisation
4. Technology
  1. it can play a leading role in the development of ideas, especially with computer-assisted design and the use of the internet
The place of change
1. some industries are more responsive to change than others
  1. Finance
    1. the amount of finance available
    2. and particularly the R and D budget, can limit the amount of innovation a business may be able to achieve
2. in high-tech industries, businesses may be less able to stay ahead of the market for long, as the pace of development is so fast
3. The level of competition
  1. the more competition there is in a market, the more of an incentive there is for businesses to create the competitive edge brought about by innovation
4. HR
  1. the number of workers, their skill sets and the amount of time allocated to innovation will all have an impact on their ability to innovate
  2. tied into the availability of finance is the related field of available workers to innovate
5. Legal constraints
  1. whether in the development stage or in the implementation stage of a product, there are many legal concerns that a business must take into account
6. Ethical considerations
  1. even when some innovations are possible legally, some stockholders may have strong ethical concerns about testing new cosmetic products or animals

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	Created by Nathalia Maria Veit about 8 years ago