In the contemporary business environment, research and development approaches for implementing strategies play the key role in the overall business success. Companies have to develop innovations and introduce them successfully to compete successfully. However, often companies face problems, while choosing an effective and reliable approach to research and development. In this respect, companies have to take into consideration their needs, resources and capabilities to choose the approach that meet their resources and potential the best.
Today, one of the most popular research and development approaches is the first firm to market new technological products. This approach focuses on the development of original, new, unique products, which appear first in the industry and have no direct rivals in the industry (Katz & Aakhus, 2002). As the matter of fact, this approach is very effective because it provides companies introducing first products with ample opportunities to take the lead in the industry.
On the other hand, the practical implementation of this approach is associated with numerous risks and threats. First of all, the company using this approach has to be bold enough to introduce new products, being first in the industry because there is always a risk of the failure of the new product, if it is introduced in the market and fails to gain interest of customers (Katz & Aakhus, 2002). Another risk is the risk of emergence of substitutes, as was the case of emergence of mobile phones, which have replaced pagers. In addition, the company introducing the first product in the industry has maintain it up-to-date to maintain the leading position in the industry. Otherwise, the company can fail to benefit from its innovative product.
Another widely-spread approach to research and development is an innovator imitator of successful products which minimizes risk and start-up costs (David, 2008). In fact, this approach is relatively cost-effective but companies using this approach are followers but not leaders in the industry. Nevertheless, on the condition of the effective promotion of the product in the industry and wise and effective business policies, companies can succeed with imitator innovator products, which already exist (Grinols, 2003). At the same time, companies need to hold their own niche in the market with their products to compete with major rivals.
The third research and development approach is similar to the previous one and this approach is the low cost producer by mass producing products similar to but less expensive. What is meant here is the fact that companies manufacture similar products but offer lower price (Schneiderman, 2002). In such a way, they can outpace rivals, which could have introduced the product first in the market but sell it at the higher price, which is unaffordable for a large number of customers. This approach is the simplest in terms of research and development but it also decreases the uniqueness of the product and depends entirely on pricing policies conducted by companies in the market.
Thus, taking into account all above mentioned, it is important to place emphasis on the fact that the three research and development approaches discussed above are effective, although their implementation depends on the background of companies, their goals and resources and capabilities. In fact, the first approach is the most effective because it provides companies with the possibility to introduce new, first product in the industry and hold the lead.
David, F.R. (2008). Strategic Management, Concepts and Cases. 12th edition. New York: Random House.
Grinols, E. L. (2003). Modern Telecommunication Technologies. New York: Routledge.
Katz, J. E. & Aakhus, M., eds. (2002). Perpetual Contact: Mobile Communication, Private Talk, Public Performance. Chicago: Routledge.
Schneiderman, R. (2002). Technology Lost: Hype and Reality in the Digital Age. New York: Touchstone.