lecture 08- managing research technology and intellectual property

8/13/2019 Lecture 08- Managing Research Technology and Intellectual Property

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An introduction to New

Product Development (NPD)

New products Development:

Managing Research,

Technology and Intellectual

Property
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Module Code and Module Title Title of Slides

New Product Development- Considerations

when developing NPD strategy

Learning Objectives

1. Recognize that R&D management is context dependent

2. Recognize that the R&D function incorporates

several very different activities3. Explain that formal management techniques are an

essential part of good R&D management

4. Recognize that certain factors are necessary but

their presence alone is not sufficient to achievesuccessful management of R&D projects
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What is Research and

Development?

R&D is the purposeful and systematic use of

scientific knowledge to improve mans lot even

though some of its manifestations do not meet with

universal approvalKnowledge and concepts

Applied Research

Development

Technical Service

Physical

Product

Product TangibilityLow

High

Basic Research
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R&D Management and the

Industrial Context

There is no single best way to manage

R&D

R&D expenditure is frequently expressedas:

R&D as % of sales = R&D expenditure/total

sales income x 100%


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R&D Management and the

Industrial Context

Industry Sector R&D expenditure as % of

sales

Pharmaceuticals and Biotechnology 14.9

Software and computer 10.4

Technical Hardware 8.2

Leisure goods 7.0

Electrical and electronics 4.8

Aerospace and defense 4.6

Automotive and parts 4.2Chemicals 3.2

Industrial engineering 2.7


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The Operations that Make Up

R&D

Basic Research

General work nature intended to apply to broad

range of uses or new knowledge about an area

Fundamental science and is usually only

conducted in laboratories of universities and

large organization

Outputs will result in scientific papers for journals E.g. antibiotics in the 1940s


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R&D

Applied Research

Use of existing scientific principles for the solution of a

particular problem

Application of science May lead to new technologies e.g. Patent

Research typically conducted by large companies and

university departments

E.g. Centrifugal forces spin dirt out of the air stream in 2stages at air speed of 924 miles an hour.




R&D

Development

Similar to the use of known scientific principles, but

differs in that activities centre on products

Usually involved in overcoming a technical problemassociated with a new product

May involve exploratory studies to improve product

performance




R&D

Technical service

Focuses on providing a service to existing products and

processes

Involves cost and performance improvements to existingproducts, processes or system

E.g. design changes to products to lower the

manufacturing cost

Dyson appliances reduce the cost of manufacturing itsvacuum cleaner, leading to increased profit margins for

the company



R&D Management and its Link

with Business Strategy

Planning decisions are directed towards the

future

Predicting the future is extremely difficult and

R&D managers have to build into planningprocess a conscious view of the future:

1. Environmental forecasts

2. Comparative technological cost-effectiveness3. Risk

4. Capability analysis
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Environmental Forecasts

Primary concerned with changes in technology

that will occur in the future

Cannot be considered in isolation to economic,

social and political factors

Who will be our competitors in five or ten years time?

What technologies do we need to understand to avoidtechnological surprises?

What will be the new competitive technologies and

businesses?





Comparative Technological Cost-

effectiveness

Technologies have life cycles and after a period

further research produces negligible benefit

New branch of technology is likely to offer far more

promising rewards

Require significant shift in resources E.g. Car manufacturers are increasing their research

efforts in electrical power technology





Risk

The culture and the attitude to risk within an

organization will influence decision

Diversification of risk over portfolio of projects into highrisk and low risk developmental ones

Planning cannot eliminate risk but can ensure that

decision are reach using a process of rational analysis

Capability Analysis Consider strengths and weaknesses

Help ensure they have necessary capabilities for the

future
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Integration of R&D

R&D needs to be fully integrated with strategic

management process of the business

Three strategic areas can be broken down into

operational activities Defend, support and expand existing business

Drive new businesses

Broaden and deepen technological capability



Strategic Pressures on R&D

The Technology Portfolio

Core technologies (e.g. Photocopying industry

photographic technologies are core)

Complementary technologies (e.g. paper handlingtechnology in photocopying industry)

Peripheral technologies(e.g. Using software, such as

security, in photocopying industry)

Emerging technologies (e.g. telecommunicationstechnologies may soon be incorporated as standard

features of the product)



Technology Leverage and R&D

Strategies

Research by Scholefield (1993 suggests that there

are essentially two forms of activity for a R&D

department

1. Growth

2. Maintenance

These categories are subdivided into 4 differentcategories 1) Survival 2) Technology Mastery 3)

Break the mould 4) Using the model




Strategies

Survival

This type of activity is conducted if decision

has been made to exit the business

Ensure interim survival against technological

mishaps to process or products

Reactive problem-solving role and termed

survival research




Strategies

Competitive

Intention to sustain the business

Make improvements to both product and process

E.g. Automotive industry invested heavily in their

own processes and vehicle quality improved to the

extent that car buyers take it for granted

Amount of research activity required to maintain ahigh-technology leverage position is significantly

greater than that required to maintain a low

technology position


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Strategies

Technology Mastery

Incremental growth of a business in a strong position

involves improving the product and process relative to

competition High level of R&D expenditure will be required

Break the Mould

Aim to create a technological advantage

Higher order of novelty and creativity is required

Involve developing new patentable technology and

higher level of basic scientific research


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Strategies

Using the Model R&D expenditure on activities would normally be

reviewed annually or quarterly

Model is used as a guide to establish theappropriateness of its position

Without guide, research will drift over time

Essential for continual analysis, adjustment and

realignment

E.g. Business executive to meet quarterly to discuss

quarterly result


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Allocation of Funds to R&D

Setting the R&D Budget

Expenditure by competitors

Companys long-term growth objectives The need for stability

Distortions introduced by large projects


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Allocation of Funds to R&D

Inter-firm Comparisons

A fix relationship to turnover

A fixed relationship to profits Reference to previous levels of

expenditure

Costing of an agreed program Internal customer-contracture relationship


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Tutorial

1. Discuss the variety of ways of funding

R&D.

2. Discuss some of the strategic pressureson R&D.

lecture 08- managing research technology and intellectual property

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