Question

Suppose you want to develop an entirely new product, which requires enhancement of your creative skills. You have two option: your own R&D and coordination with some other research active company. What will you prefer and why? You are required to give at least three reasons.

Answer 1

Ans: In my opinion I wil prefer coordination with other research active companybecause of the following reasons:

1. By collaborating with other research active companies it will increase creativity and efficiency and we can focus more on core activities; given the nature of R&D activities; by externalising the activity will enhance increased interaction and collaboration.
2. By externalising the process of R&D firms can attain flexibility gains and having access to external knowledge and knowlege transfer through R&D alliances will increase the learning capacity of firm as well as its partners.
3. The studies have proven that external R&D activities complement the internal R&D activities; there has been a positive relationship between the external technology sourcing and internal R&D; in- house R&D activities enhance the level of R&D outsourcing.
4. By partnering with different alliances firms can achieve the assimilation, integration and exploitation of that external knowledge obtained as a result of this economies of scale in R&D activities can be set in if all the firms partner with major partners, by externalising the activities costs to the company can be reduced.