- creating new products and processes (how things are done)
R&D includes: investment (funding), test marketing, prototypes, market research research: new ideas + products development: take research to commercialize a product
Internal forces:
- to be competitive
- extra revenue
- first mover advantage
- market orientation (keep with the times)
external factors
- changes in consumer habits + tastes
- government legislations (i.e. EU!!)
- innovative products launched by rivals (Tesla autopilot, electric cars)
advantages to R&D
- CSR may improve
- first mover advantage
- premium products with high margins
- production process can cut costs ⇒ set more competitive prices
- improve longevity + competitiveness of organization
- prolong life cycle
disadvantages to R&D
- COST
- time consuming
- may not be fruitful
- failure rate
