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Analyze Research and Development Activitiesf

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Analyze Research and Development Activities

Importance of R&D

Research and Development (R&D) is critical to the success attained by an

organization. R&D is even more critical in today's environment where businesses are

committed to enhancing their competitive advantage while at the same time addressing the

demands for new products and services of the target customers. To some extent, some

companies do not attach much value to R&D as they consider it to be expensive. Indeed,

R&D requires a commitment of huge finances, but it is critical as it leads to the company's

long-term viability (Miremadi et al., 2021). Research ought to be treated as an investment for

an organization that does not yield immediate returns but end up increasing the profitability

of an organization in the future.

The Initial Strategy

The initial strategy of R&D is to invest in a research process that is aligned with the

company's aims and objectives. If this strategy, which aims to fulfill organizational goals, is

implemented, the research approach will be successful. It also depends on the culture that the

company develops. Many organizations that have made it to the top simply by having a solid

and dependable research process have since incorporated innovation as part of their

organizational culture. The initial strategy of Andrews company has been successful to some

extent, but there are several changes that can be made to improve the competitive advantage

of the company.

The initial strategy of Andrews Company consists of price leadership as well as

differentiation. The Traditional and Low-end segments are seen to be important for the

company due to the sheer amount of the existing demand. Furthermore, in order to compete

in the High-end, Performance, and Size segments, a significant amount of R&D, sales, and

advertising resources are required, putting a strain on overall profitability. As a result, it is

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critical to start with the Traditional and Low-end segments to build strength and pave a way

leading to later expansion into the profitable High-end, Performance, and Size segments. In

the future.

Analysis of Andrews R&D Strategy

Andrews' general business strategy is to supply high-quality sensors to the global

electronic sensor sector. It uses established market-specific R&D methodologies to

manufacture a variety of sensors in various segments and prices them reasonably in this

competitive market. The company is stuck to its original plan, which comprises cost

leadership and differentiation. In each segment, adjustments are made in the R&D,

marketing, and production departments in response to existing market conditions. As a result

of the high material costs, the product's profit margin would be squeezed, making it less

appealing to businesses (Barney, 1991). Due to its low contribution margin, Andrew's

Company does not invest many resources in the high-end category. The company ended up

losing money in this division in 2021. However, the company has stated that it will not

withdraw this product line as long as the loss can be kept under control, as the company does

not want to make it easy for its competitors to invest in this product line.

Probable Changes in Regard to R&D

For the purpose of capturing market share, it is recommendable that the new

product (Ace) be released to the market within the shortest time possible. The company has

committed a lot of money to promotion strategies and sales, making every attempt to increase

client awareness and accessibility as quickly as possible. It is also a good idea to invest in

incremental plant capacity expansion as the company's market share keeps on growing. The

performance of the first product, Agape, appears to be deteriorating. This was due to a lack of

marketing spending and Agape's weak standing position. Agape's profit was insignificant,

and it is critical that the company considers removing it.

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References

Miremadi, A., Golchobian, M. M. A., & Ghanadiof, O. (2021). Requirement and Architecture

of Organization Development. European Journal of Business and Management

Research, 6(4), 55-64.

Barney, J. (1991). Firm Resources and Sustained Company Advantage. Journal of

Management, 17 (1), 99-120.