Research and Development (r&d)

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TITLE: In order to remain competitive and profitable, companies need to constantly develop their product range. In many cases profits need to be reinvested, providing Research and Development (R&D) teams with the budgets to carry out their important work. Compare how important reinvestment in R&D is in different industries, and what the consequences are for companies who fail to reinvest. Provide real examples from the world of business in your answer.

                                 NAME: Ellie(Li Jiawei)

                                 P NUMBER: 14023368
                                GROUP: 22

                                 DATE: 30/08/2015

In recent years, companies in different industries have started to reinvest their profits into R&D and many of them have gained success. Research and development has been known as one of the most effective ways by which companies can gain more profits and make progress by developing new products or simplifying producing processes to improve their performances. (Helfat, 1997) With the arrival of the new economic era and the acceleration of the pace of economic globalization, the enterprise and the world economy become increasingly close, the market competition becomes more and more intensified, research and development are becoming the driving force of company development. Using examples of companies in different industries and different countries and with reference to economic social, the importance of R&D will be indicated below.

In the fierce market competition, enterprises have to not only face the competition of domestic enterprises, but also face the threaten of the multinational Companies, whether the enterprise can develop new technology and new products with the market demands and changes is the key for enterprises to survive and develop in the competition. Reinvestment is really important in all industries, such as medicine, electronics, clothing, cosmetic, furniture and so on.

R&D is often thought of as more important in electronics industry which is on the cutting edge of new technology. Hardware, software and internet companies tend to spend large amount of money on improving the existing products and create new kinds of products. For example, Apple spends quite a bit on R&D each year in ongoing attempts to design and carry out new products.(Guoqing, 2012) In 2014, Apple surpassed Google to become the world's most valuable brand.

Reinvestment in R&D is also very important in the medical industry. In medical equipment enterprises many new equipments can be create and improve the therapy pathway and therapy process. Practice Fusion spends quite a bit on R&D and created a special medical software which is called Electronic Medical Record (EMR). In September 2013, the company already has 65 million patients with electronic medical records, According to statistics, a doctor in California spends up to $ 2.5 million on this each year. And most doctors use the system for about 6-8 hours a day. On the understanding that it will not affect doctor’s work, Practice Fusion publishes a small medical advertising at the bottom of each page of records, with the exact keyword matching, advertising is very accurate. Medicines Companies also willing to pay for such ads. pharmaceutical enterprise may develop new medicaments to protect people from new disease by R&D. The Middle East respiratory syndrome (MERS) has recently been spread in South Korea, which has a high mortality rate of up to 40%. Since three years ago, the disease has been found in Saudi Arabia, people have not been able to treat it. Under R&D, researchers in University of Maryland and other institutions recently developed two antibodies which can treat MERS.