5.8 Research and Development

Research and Development

the process of bringing new products to market. It involves high levels of spending and is not always successful

Research and Development benefits

lower costs

product development

diversification

brand image

Research and Development limitations

risk

lower short term profits 

corporate espionage

benefits are not guaranteed 

importance of research and development 

product development and diversification

lower production costs 

unmet need

a particular desire, issue, function or problem that has not been addressed by society. It could be that a solution has not been found, or that it is not yet affordable

Gap in the market

an unmet need that can be addressed by a business. If a business can find and fill this gap, they may earn a profit by selling a product or service to customers to meet this need

Intellectual Property

refers to creations of the mind such as inventions, artistic works or brand names. It is an intangible asset and can be protected through patents, trademarks and copyright.

Businesses protect intellectual property because:

unique selling point

market share 

valuable assets 

protect investments in research and development 

Patents

a license or a grant that gives an inventor the exclusive right to make, use or sell a product. If a business files for and gets a patent approved, then it has ownership of that invention for approximately 15-20 years

Trademarks

a symbol, word or phrase that is recognisable and associated with the business. Examples include, brand names or logos that can help customers identify a product from competitors

Copyright

protection that is available for creative artists, writers, musicians and contributors. It is given without application to any authority and is granted for a significant number of years

Innovation

refers to the concept of creating or developing new ideas and turning them into something commercially viable

incremental innovation

a series of small, minor adaptations that happen steadily over a period of years. It is when products or services are regularly updated and improved without changing the core of what it is

disruptive innovation 

involves creating entirely new products and processes. It tends to involve radical changes that can totally change the landscape of the industry