A2 Business Studies Resources

1. Do Now – Gimme 3!
Write down three key learning
points from the previous
lesson.
Prepare to discuss what you
have written.

2. Operational Strategies: Innovation

3. Learning Objectives
By the end of the lesson you should be able to:
1. Understand the importance of innovation and research
and development to the competitiveness of larger
business.
2. Recognise costs and risks of innovation and research and
development
3. Analyse the implications of innovation to finance,
marketing and human resources.

4. Discussion Point
Innovation: The launch of a new product or process, an
What is meant by innovation?
invention, onto the market for commercial gain
Finish the following sentences:
The strategy of innovation has implications for other
The strategy of innovation has implications for….
functional areas.
The risk risk of heavy investment in R&D alsohas potential
The of heavy investment in R&D also has….
rewards.

5. What is research and development
(R&D)?
R&D is the scientific research and technological development of a new
product or process.
Questions Answers
1. Along with product development 1. Improve existing products or
what could R&D also improve? production process.
2. What does R&D enable a firm to 2. Competitive advantage with a USP
have? and greater efficiency.
3. Draw a product life cycle – where 3. At the start of the PLC.
does R&S appear?
4. Money only flow in one direction for
4. What are some of the downsides R&D so firms may want to keep this
of R&D? to a minimum.
5. Looking back at your PLC, what 5. Can prevent products going into
decline once they have matured in
else can R&D help to prevent? the PLC.

6. The process of R&D
Write a description based on your cue card. Place the card in the correct
order in process of R&D. You must be able to justify your reasons.
Idea Generation
Idea Screening
Concept Testing
Development of idea
Business Analysis
Product Development
Test Marketing

7. Using the following key words/ term, sum
up the purpose and cost of R&D….
New Products
or Processes
Costs
Maintain Market Share
Position Opportunity Cost
Competitive Advantage

8. Discussion Point
1. List the companies that you associate with the word ‘innovation’.
2. What industries are these companies in?
3. What are the characteristics of this company?
Decide - To which company would you award a
trophy to as ‘top innovator of the year’?

9. What are the risks and rewards of
R&D and launching new innovation?
Risks Rewards
Heavy time and resource Develop USP leading to
commitment with no competitive advantage.
guarantee of success.
Charge premium prices
Competitors reactions.
Improvements in efficiency
Loss of business direction. and production process.
Company image/ reputation Reputation of being
damaged. innovative.

10. What is the impact on marketing,
finance and human resources?
Marketing Finance Human Resources
May act to inform the Setting an monitoring Oversee R&D workforce
R&D department of a budgets for R&D. needs/ issues.
potential niche or
customer opinion – Costing new products. Increase or reduce
market-led. staffing numbers.
Work with marketing to
Play major role in develop pricing
promoting or getting structures/ profit.
the product to the
consumer.

11. Test Yourself!
1. What is meant by the term
innovation?
2. Why are patents often associated
with investment in R&D?
3. Explain one benefit of investment in
R&D.
4. If R&D is high risk then why do firms
undertake it?

12. Re-cap Learning Objectives
You should now be able to:
1. Understand the importance of innovation and research
and development to the competitiveness of larger
business.
2. Recognise costs and risks of innovation and research and
development
3. Analyse the implications of innovation to finance,
marketing and human resources.