Research and Development

This is really part of product development.

So what's good about R&D?

• You can create a competitive advantage by having a product that outstrips rivals (i-Pod?)


• company image is improved if it is seen as innovative and forward thinking (Virgin, Apple?)


• you can get a PATENT which then again increases competitive advantage due to limiting imitators


• Prototypes can be developed and tested to try to satisfy customer needs


• R&D could also mean that the firm becomes more productive with the development of new technology which in turn could mean they become more efficient and also reduce costs.


• New production techniques can be created and implemented (again increasing production and lowering costs)


• Staff may be highly motivated because they are being creative

Interestingly...
99% of products don't reach market
Dragons' Den deals with much of the R&D as they meet inventors who need cash to turn their prototype into a reality
R&D is very expensive, but if firms want to be around in the future they have to invest in their future or be left behind