• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Consider the factors that might determine whether an increase in Research and Development would improve the financial performance of UK manufacturing firms.

Extracts from this document...


Consider the factors that might determine whether an increase in Research and Development would improve the financial performance of UK manufacturing firms UK manufacturing firms have many factors which influence their financial performance. Research and Development could be a key factor in determining a firms success, however it does not assure financial improvement in all businesses due to the extensive variety of business types. Research and Development can be defined as the scientific investigation necessary to discover new products and the process of bringing these products onto the market. A manufacturing firm, which generally refers to a business that makes or processes raw or semi processed materials into either a finished product or further processed materials, by using large-scale mass production by means of automation and production lines. Manufacturing firms tend to rely on economies of scale to lower costs and allow bulk-buying benefits, from this firms produce large volumes of products using specialised machinery, which can then be sold at low prices to finance the business. Research and Development can take many forms, for example, large international pharmaceutical companies spend huge amounts of money on Research and Development, this is because pharmaceutical companies rely heavily on new products which can be patented, and then used as a competitive advantage that allows premium pricing and increased profits. ...read more.


Also Research and Development could develop new methods to produce existing products, to lower average costs. However this depends on the skill of the scientists and researchers, because despite how much money is pumped into the Research and Development department, without ideas, invention and innovation the business will have no rewards. Furthermore, even if Research and Development does its job, this will be worthless if the manufacturing firm has too specialised equipment, which is unable to be flexible enough to change to creating this new product or process. With a manufacturing firm, and almost all companies there is a balance needed between, quality, price, and costs. If for example Research and Development produced a higher quality product, then this may cost more to produce, but may gain the benefits of been able to charge higher prices. However, say for example this manufacturing firm was producing scissors, and the R & D department produced a titanium sharpest ever pair of quality scissors. The quality would undoubtedly be higher, but their may not be a market or demand for a higher quality product, when steel scissors and low prices do the job practically just as well, and are ultimately cheaper. ...read more.


As is clear by now the businesses which are most likely to succeed in the future are those which develop more new products than their closest rivals, bring their new products to the market in less time than their rivals, compete in more product- and geographic-markets than their rivals, and provide very strong after-sales service to customers. The deciding factor in whether or not R & D may improve the financial performance of a UK manufacturing company could be many things, which depends on the type of product they are producing, its geographical location, the state of the economy, the firms flexibility to produce new products, the skills and funding put into the R & D process, the Corporate Culture, whether it encourages innovation and creativity, or whether it promotes more traditional tayloristic principles. Finally, the short term and long term objectives of the firm also affect its financial performance, whether its plans are to develop new products with short life cycles to continually adapt to the changes in consumer needs, or whether to economize and focus on long term survival. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Production - Location & Change section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Production - Location & Change essays

  1. The Role and Importance of Agriculture In the Carribean. Organisations involved in its ...

    The amount of moisture present will also affect the rate of soil formation, by influencing the rate of weathering and decomposition. (iii) Topography: the topography is the shape or contour of the land surface. Soils formed on slopes then to be thinner than those that are formed on gently sloping lands.

  2. Arthur Lewis's dual-sector model of development.

    which results in an even greater investment. Lewis points out that the growth in capitalist profits is crucial in this process and the share of profits in the national income is strategically important. As the capitalist sector expands and, the wage-price ratio remains constant, the share of profits in national income increases.

  1. Changing Locational Factors of Manufacturing Industry In the 20th century the factors affecting the ...

    Many 19th century industries can therefore be seen in areas that became known for the particular products made there. For example, the steel industries in Sheffield and South Wales, and the car industry in Birmingham. However, in the 20th century the switch from secondary industries to more quaternary industries, meant

  2. Assignment on Computer Integrated Manufacturing

    The most critical of the factors behind the growth and evolution of CIM has undoubtedly been the advent and subsequent growth of computers and computing power. The computer was and still is the most effective tool for carrying out repetitive tasks as well as storing large amounts of data and

  1. Scientific investigation of Antarctica

    It is probably a Precambrian shield, over 570 million years old, covered by thousands of metres of ice. West Antarctica, lying mostly within the western hemisphere, appears to be a continuation of the Andes of South America; glaciologists and geologists speculate that West Antarctica would become an island archipelago if the ice cover were removed.

  2. Protective clothing - A report for the YMI scheme on the manufacturing processes of ...

    of current market trends and the ability to translate these into marketable design ideas, which in turn will generate sales. The first role of the designer is to carry out intensive research on the trends which are forecasted within the industry.

  1. Everyone's Gasoline Problem. We are all familiar with fluctuating prices of gasoline at the ...

    In which case, if any, do you think the supply has increased more rapidly than demand? In which of the three cases, if any, do you think that the demand has increased more rapidly than supply? Explain your reasoning. Answer: The three farm products chosen are as follows: 1.

  2. Just in Time (JIT), as a survival strategy for the manufacturing industry against fierce ...

    Most of us who have heard of JIT also know that it is a Japanese philosophy dating from the late 60s and the very first name that strikes everybody's mind while recalling the concepts of JIT production philosophy is Tai-ichi Ohno, the ex-senior vice president of Toyota Motors.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work