Business Context for R&D_GCM

Category: Education

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Business Context for R&D


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Business Context for R&D:

Business Context for R&D Dr. G C Mohanta, BE( Mech ), MSc( Engg ), MBA, PhD(Mgt) Professor Al-Qurmoshi Institute of Business Management, Hyderabad - 500005

Business Context for R&D :

Business Context for R&D Research and development (R&D)  is more important for some companies than others.  A software company would spend more money on R&D than a retail sales company. Technology companies survive by developing more effective technology than their competitors. A company like Apple, has many employees that work in R&D , because Apple competes in its market by first developing and then releasing the devices that are better and more appealing than those created by its competitors.

Business Context for R&D (Contd.):

Business Context for R&D (Contd.) The high tech., software or pharmaceutical companies need to pay more attention in R&D , to develop state of the art products or services. Since Revenue is generated by these companies by selling their products/services. These products/services should be more useful and advanced than its competitors, These companies need more investment in R&D for innovation .

Why R&D is Important :

Why R&D is Important Fast changing environment Continuous technology change Competition Changing consumer preferences To survive in market To gain advantages in market by: Understanding what market needs Having technology suitable for making the products Having efficient production processes

Strategic Role of R&D :

Strategic Role of R&D

Typical R&D functions in Business:

Typical R&D functions in Business Typical R&D functions in business are: Development of New Products/Services - This usually is the primary function of R&D. Product Maintenance - It is the most important secondary function of R&D- short term income is important. Product Enhancement - It helps to keep the company’s products ahead of the competitors and extend the life of its products. Regulatory Compliance - It is a legal requirement- products sold in a country must ensure compliance to laws of the country. Quality and R&D Interface - The quality is a major issue and R&D is heavily involved in ensuring new products attaining the required level of quality.

Strategic management of R&D :

Strategic management of R&D

Business strategy :

Business strategy To provide support infrastructure to ensure business success To match R&D to market realities and opportunities To study and forecast the state of operating environment To have capacity to adjust to changes, e.g., climate change Risk analysis Capability analysis

Integrating R&D to overall business strategy:

Integrating R&D to overall business strategy R&D should not be independent of business strategy R&D is part of the business support infrastructure It’s aims should be: To provide support to existing businesses by keeping them competitive and improving efficiencies and effectiveness To drive new businesses and opportunities To broaden and deepen technological capability for long-term benefits

R&D in Business: An Example :

R&D in Business: An Example Let's say a company XYZ is a pharmaceutical company that produces pain relieving medicine . XYZ has several competitors, so the efficient production of medicine is essential for it to maintain or expand its share in the market. In order to continue producing effective medicine, XYZ needs to allocate much of its resources , both financial and human, to the development of more effective pain relieving medicine .

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