Business – 8.1 Marketing analysis – Product development | e-Consult
8.1 Marketing analysis – Product development (1 questions)
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The following table outlines key risks versus rewards for a mature firm allocating substantial resources to R&D:
| Aspect | Risks | Rewards |
|---|---|---|
| Financial | High upfront costs with uncertain return on investment. | Potential for high‑margin new products that boost revenue. |
| Strategic | Diversion of focus from core profitable activities. | Diversification of product portfolio and entry into emerging markets. |
| Operational | Long development cycles can delay time‑to‑market. | Process innovations can improve efficiency and reduce long‑term costs. |
| Reputational | Failed projects may damage brand credibility. | Successful breakthroughs enhance brand prestige and attract talent. |
Overall, while the financial and strategic risks are significant, the potential rewards—especially in terms of long‑term growth and market positioning—can outweigh them if the R&D programme is well‑managed and aligned with the firm’s strategic objectives.