Research & Development
Research & Development refers to the investigative activities a business conducts to improve existing products and procedures or to lead to the development of new products and procedures.
R&D can be defined as where the tasks of innovation management meet the tasks of technology management .It covers activities such as basic research, fundamental research, technology development, advanced development, concept development, new product development, process development, prototyping, R&D portfolio management, technology transfer, etc.
To create your own product with specific features and advantages.
We need to follow the strategy of product life cycling：
Stage 1: Introduction
This is where the new product is introduced to the market, the customers are unaware about the product. In order to create demand, investments are made with respect to consumer awareness and promotion of the new product in order to get sales going. At this stage, profits are low and there are only few competitors. When more items of the product are sold, it enters the next stage automatically.
For example, a new product invented in the United States for the local consumers will first be produced in the United States because that is where demand is located, and these firms will wish to stay close to the market to detect consumer response to the product. The characteristics of the product and the production process are in a state of change during this stage as firms seek to familiarize themselves with the product and the market. No international trade takes place.
Stage 2: Growth
In this stage the demand for the product increases sales. As a result, the production costs decrease and high profits are generated. The product becomes widely known, and competitors will enter the market with their own version of the product. To attract as many consumers as possible, the company that developed the original product will still increase its promotional spending. When many potential new customers have bought the product, itstage.
Stage 3: Maturity
In the maturity stage of the Product life cycle, the product is widely known and is bought by many consumers. In the maturity phase of the product life cycle, demand levels off and sales volume increases at a slower rate. There are several competitors by this stage and the original supplier may reduce prices to maintain market share and support sales. Profit margins decrease, but the business remains attractive because volume is high and costs, such as those related to development and promotion, are also lower. The industry contracts and concentrates — the lowest cost producer wins here.
In addition, foreign demand for the product grows, but it is associated particularly with other developed countries, since the product is catering to high-income demands. For instance, in the case of the newly invented product, this rise in foreign demand (assisted by economies of scale) leads to a trade pattern whereby the United States exports the product to other high-income countries. Other developments also occur in the maturing product stage. Once the American firm is selling to other high-income countries, it may begin to assess the possibilities of producing abroad in addition to producing in the United States. With a plant in France, for example, not only France but other European countries can be supplied from the French facility rather than from the U.S. plant. Thus, an initial export surge by the United States is followed by a fall in U.S. exports and a likely fall in U.S. production of the good.
Stage 4: Decline
By this time in the product’s life cycle, the characteristics of the product itself and of the production process are well known; the product is familiar to consumers and the production process to producers. This occurs when the product peaks in the maturity stage and then begins a downward slide in sales. Eventually, revenues will drop to the point where it is no longer economically feasible to continue making the product. Investment is minimized. The product can simply be discontinued, or it can be sold to another company. Production may shift to the developing countries. Labor costs again play an important role, and the developed countries are busy introducing other products. For instance, the trade pattern will show that the United States and other developed countries have now started importing the product from the developing countries.