3.13 oprational strategies - innovation - moodle

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Write down three key learning points from the previous lesson. Prepare to discuss what you have written. Do Now – Gimme 3!

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Page 1: 3.13   oprational strategies - innovation - moodle

Write down three key learning points from the previous lesson.

Prepare to discuss what you have written.

Do Now – Gimme 3!

Page 2: 3.13   oprational strategies - innovation - moodle

Operational Strategies: Innovation

Page 3: 3.13   oprational strategies - innovation - moodle

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

Page 4: 3.13   oprational strategies - innovation - moodle

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.

Page 5: 3.13   oprational strategies - innovation - moodle

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.

Page 6: 3.13   oprational strategies - innovation - moodle

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

Page 7: 3.13   oprational strategies - innovation - moodle

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

Page 8: 3.13   oprational strategies - innovation - moodle

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’?

Page 9: 3.13   oprational strategies - innovation - moodle

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.

Page 10: 3.13   oprational strategies - innovation - moodle

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.

Page 11: 3.13   oprational strategies - innovation - moodle

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!

Page 12: 3.13   oprational strategies - innovation - moodle

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.