3.13 oprational strategies - innovation - moodle
DESCRIPTION
A2 Business Studies ResourcesTRANSCRIPT
Write down three key learning points from the previous lesson.
Prepare to discuss what you have written.
Do Now – Gimme 3!
Operational Strategies: Innovation
By the end of the lesson you should be able to:
1. Understand the importance of innovation and research and development to the competitiveness of larger business.
2. Recognise costs and risks of innovation and research and development
3. Analyse the implications of innovation to finance, marketing and human resources.
Learning Objectives
What is meant by innovation?
Finish the following sentences:
The strategy of innovation has implications for….
The risk of heavy investment in R&D also has….
Discussion Point
Innovation: The launch of a new product or process, an invention, onto the market for commercial gain
The strategy of innovation has implications for other functional areas.
The risk of heavy investment in R&D also has potential rewards.
Questions1. Along with product development
what could R&D also improve?
2. What does R&D enable a firm to have?
3. Draw a product life cycle – where does R&S appear?
4. What are some of the downsides of R&D?
5. Looking back at your PLC, what else can R&D help to prevent?
What is research and development (R&D)?
R&D is the scientific research and technological development of a new product or process.
Answers1. Improve existing products or
production process.
2. Competitive advantage with a USP and greater efficiency.
3. At the start of the PLC.
4. Money only flow in one direction for R&D so firms may want to keep this to a minimum.
5. Can prevent products going into decline once they have matured in the PLC.
The process of R&DWrite a description based on your cue card. Place the card in
the correct order in process of R&D. You must be able to justify your reasons.
Idea Generation
Idea Screening
Business Analysis
Development of idea
Concept Testing
Test Marketing
Product Development
Using the following key words/ term, sum up the purpose and cost of R&D….
Cutting Edge
Opportunity Cost
Maintain Position
Market ShareCosts
New Products or Processes
Competitive Advantage
1. List the companies that you associate with the word ‘innovation’.
2. What industries are these companies in?
3. What are the characteristics of this company?
Discussion Point
Decide - To which company would you award a trophy to as ‘top innovator of the year’?
Risks Heavy time and resource
commitment with no guarantee of success.
Competitors reactions.
Loss of business direction.
Company image/ reputation damaged.
What are the risks and rewards of R&D and launching new innovation?
Rewards Develop USP leading to
competitive advantage.
Charge premium prices
Improvements in efficiency and production process.
Reputation of being innovative.
Marketing May act to inform
the R&D department of a potential niche or customer opinion – market-led.
Play major role in promoting or getting the product to the consumer.
What is the impact on marketing, finance and human resources?
Finance Setting an
monitoring budgets for R&D.
Costing new products.
Work with marketing to develop pricing structures/ profit.
Human Resources
Oversee R&D workforce needs/ issues.
Increase or reduce staffing numbers.
1. What is meant by the term innovation?
2. Why are patents often associated with investment in R&D?
3. Explain one benefit of investment in R&D.
4. If R&D is high risk then why do firms undertake it?
Test Yourself!
Re-cap Learning Objectives
You should now be able to:
1. Understand the importance of innovation and research and development to the competitiveness of larger business.
2. Recognise costs and risks of innovation and research and development
3. Analyse the implications of innovation to finance, marketing and human resources.