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5.6: Research & Development (Intellectual Property Rights…
5.6: Research & Development
Importance
innovation
: the practical application of new inventions into marketable products
research and development (R&D)
: the scientific research and technical development of new products and processes
Benefits to a country
creation of high-tech jobs :arrow_right: increase average income level
creation of high-added-value products
prestige
attracting investment
Benefits to a business
competitive advantage
creation of intellectual property rights
customer loyalty
high & premium prices
publicity
lower costs
Limitations to a business
doesn´t always lead to invention or discovery
it's expensive & has an opportunity cost
inventions don't always lead to successful innovative products
competitors' R&D spending
ethical issues
Intellectual Property Rights
intellectual property
: refers to creations of the mind such as inventions, literary and artistic works and symbols, names, images and designs used in business
it's intangible
intellectual property rights
: legal property rights over the possession and use of intellectual property
property rights
: the rights to possess, use, license, sell and financially benefit from property
set a business apart from competitors :arrow_right: increase sales
can be sold or licensed to provide revenue stream
form a part of the branding process & assist in marketing
can be given financial value :arrow_right: increases net assets
copyright
: legal right to protect and be the sole beneficiary from artistic and literary works
trademark
: a distinctive name, symbol, motto or design that identifies a business or its products – can be legally registered and cannot be copied
can be damaged by bad publicity
the ability to download digital versions (illegal downloading), has made the task of protecting intellectual property even more difficult
Types of Innovation
4Ps Innovation Model
Product Innovation
new, marketable products
developing and improving existing products
these products are trying to satisfy consumers’ unmet needs
Process Innovation
new methods of manufacturing a product or providing a service
offer benefits to the business/customer
Positioning Innovation
involves ‘relocation’ of the customer’s perception about a product
Paradigm Innovation
a distinctive change in what a business does
change in the nature of goods/services available
EX. social media
adaptive creativity
innovative creativity
Factors Afecting R&D Practices & Strategies
R&D Strategies
min. R&D spending & focus on traditional products/processes
min. R&D spending & patents
patent
: legal right to be the sole producer and seller of an invention for a certain period of time
high R&D spending & gain competitive advantage
Factors
nature of the industry
R&D spending plans of competitors
business exprectations
culture of the business (risk profile)
Government policies
Finance
Ethical considerations
Cecilia Martínez A01197738