Research and development

Question 1

Innovation

Answer 1

Innovation is when a new idea or invention is launched onto the market normally with a view to competitive gain.
Innovation is not cheap and resources have to be committed by the business to bring new products into the marketplace.
Is of a result of research and development

Question 2

Research and development

Answer 2

the scientific research and technological development of new products and processes.

Question 3

Product innovation

Answer 3

changing a product that already exists or developing an invention into a brand new product.

Question 4

process innovation

Answer 4

Changing a process of production that already exists or putting into practice a brand new production process.

Question 5

benefits of innovation

Answer 5

• Creates a USP for the product
• Less competition due to patent
• More efficient and cost-effective production process
• Likely to be a premium product with high prices

Question 6

Innovation costs

Answer 6

• Can be very costly in the R and D stage and therefore a drain on resources.
• For all innovations there’s an opportunity cost
• Few innovations see the light of day, so firm is effectively financing waste.

Question 7

Benefits of research and development

Answer 7

• Launch new products successfully and create star products to gain a competitive edge.
• Business can meet changing needs of the market
• Companies can gain a USP
• An improved working environment
• Reduction in the long term costs of production due to new developments of technology

Question 8

Drawbacks of research and development

Answer 8

• No guarantee of success
• Amount of money required to fund the R and D investment
• New ideas potentially open for competitors to copy

Question 9

Evaluation of research and development

Answer 9

• Depends on nature of industry – Some industries may require more R and D.
• Depends on money and time available
• Depends on competitors reaction