Research And Development (Quick Revision)

Question 1

Define: Research And Development (R&D)

Answer 1

Research and development is the process of inventing and producing new products and processes

Question 2

State three factors that might influence the amount spent on research and development.

Answer 2

• The need to innovate
• The spending of competitors
• The funds available

Question 3

State two ways in which R&D might help a firm’s competitiveness.

Answer 3

• May provide a unique selling point (proposition)

* May reduce the costs of producing

Question 4

State two problems in budgeting for R&D.

Answer 4

• May have to wait long term for rewards.

* Uncertain whether it will succeed.

Question 5

State four reasons why a new product may fail.

Answer 5

• Poor marketing
• Reaction of competitors
• Poor market research
• Difficulties with a new production process

Question 6

What is the Examiner’s note for Research and Development (R&D)?

Answer 6

R&D is not the same as market research. Market research focuses on finding out what customers want, while R&D develops ideas.

Question 7

What is the Evaluation point for Research and Development (R&D)?

Answer 7

The importance of research and development depends on the rate of change in the industry and the need for new products and processes.