Factors Affecting Essay Example for Free

Factors Affecting EssayFew markets avoid change, which involves new products or new shipway of making existing products. Some industries are more likely to undergo substantial changes brought about by new technologies and new adaptations of existing technologies. The IT, computer and vigorous phone markets are experiencing more innovation than most. How do businesses benefit from introducing radical new products and what factors influence the range and pace of innovation? Spending on query and development (RD) is growing globally and in most industrial sectors. The benefits to a country of encouraging RD spending includecreation of high-tech jobscreation of high-added-value products that whitethorn then be manufactured in that country prestige a country being linked to scientific and technological breakthroughs Attraction of investment by multinational corporations.Several factors may influence the level of research and development (RD) and innovation by a business The natur e of the industry. Rapidly changing technologies and consumer expectations in pharmaceutical products, defense, computer and software products and motor vehicles lead to the postulate for substantial investment in RD by leading firms. Other businesses, such as hotels and hairdressing, would need to spend often less as the scope for innovation is more limited.The RD and innovation spending plans of competitors. In most markets, it is essential to innovate as much as or more than competitors if market share and technical leadership are to be maintained. However, a monopoly may limit RD spending if it believes that the risk of a more technically advanced competitor entering the market is limited. On the other hand, profits from a monopoly could be used to finance research into progressive products if the risk of competitor entry into the industry is high.Business expectations. If business managers are optimistic about the future state of the economy and the rate of economic emers ion and consumer demand,then they are more likely to agree to substantial budgets for RD and aim to introduce more innovative products.The risk profile or culture of the business. The post of the management to risk and whether shareholders are prepared to invest for the long term will have a significant effect on the sums that businesses can dart into RD programmes. Short-termism is an accusation made towards many major UK financial institutions and the need to satisfy these investors could discourage managers from investing in RD. Government policy towards grants to businesses and universities for RD programmes and the range and scope of taxation allowances for such expenditure will influence decisions by businesses.Finance is needed for effective RD. In many firms this may be limited and will circumscribe the number of new innovations that could be made.Referencehttp//classof1.com/homework-help/operations-management-homework-helpView as multi-pages