How do you get competitive advantage?
Offer consumers greater value - lower prices and/or gretare benefits and services
So R&D can improve the product - protect your investment through a patnt. Important in fast changing markets
But....
Expensive
Low rate of commercial success
Should not be seen in isolation - market research may be very important...
&&&&&&&&&&&&&&&&&&&&&&
Research and Development plays a critical role in the innovation process. It’s essentially an investment in technology and future capabilities which is transformed into new products, processes, and services.
In industry and technology sectors R&D is a crucial component of innovation and a key factor in developing new competitive advantages (Heneric, Licht, and Gofka in Europe’s Automative Industry On The Move: Competitiveness In A Changing World).
One company in particular has devoted itself to R&D and as a result constantly soars ahead of its competition. If you want a great example of an innovative firm…
Research and Development departments are common in many larger companies, especially those working with newer products or technologies subject to important shifts. While research and development work can be instrumental in creating new products or adding features to old products, the work that the department does is more complex than simple innovation. R&D is connected to marketing, cost management and other parts of business strategy.
Leaps in Market Participation
Market participation refers to the ability to attract new customers and win customer interest. At its core, research and development is about innovation, about offering consumers something they have never seen before. When R&D can pull off such a product offering, the interest that consumers have can cause a sharp leap in market participation and sales. It may even create an entirely new market for the company.
Cost Management Benefits
Research and development does not produce value directly in relation to how much funding the department receives. It is unique in this property; the success of R&D depends more on the practices, talents and innovations of the people working there than on how much money the department receives. This means that a company can actually spend less money on research and development than many competitors but work to secure talented employees and proper goal orientation and still produce good results.
Marketing Abilities
Research and development strategies allow companies to create strong marketing campaigns and advertising strategies. The two work together very well. The research and development department works to make new product designs or add features, and the marketing department interprets these changes in the most exciting light possible in order to attract customers, creating synergies between the two branches.
Trend Matching
Many times a market is already embracing a trend, and the research and development department can be used to make the business active in that trend and increase sales. For example, in markets rapidly embracing green products, a company can use research and development to make products out of natural ingredients, recycled materials or biodegradable substances, allowing for the release of an eco-friendly version of the product that increases sales. When R&D can catch up with trends, the business is seen as adaptable and profitable.
