Product design through research and development A Syngenta case study
Page 5: Challenges and benefits of R&D
R&D plays a huge role in Syngenta's business growth. However, there are a number of challenges involved in any research and development activity:
High costs - Syngenta spent $1 billion on R&D in 2009.
Long timescales - it typically takes Syngenta ten years to bring a new product to market.
Uncertain outcomes - there are always uncertainties about whether the product will meet the original brief and customer requirements. For example, pests may develop resistance to the product over time.
Difficulties in anticipating how conditions will change in the market and whether customer needs will change during the long R&D process. Competitors may come up with a rival product that is just as effective.
However, businesses gain considerable benefits from investing in research and development:
Unique products - these can give businesses a unique selling point (USP). They can then acquire patents for these products. The patent is a legal protection that prevents other companies from copying them.
Competitive advantage - through R&D Syngenta is able to build advantage over its competitors by bringing innovative products to the market.
Long term income - once a product has been developed it can generate a strong stream of profits for many years.
Ongoing research also leads to new opportunities - researchers cannot always anticipate what the results of their research will be. Often chance discoveries open up whole new channels of research.
Enhanced reputation - engaging in research helps to build Syngenta”s brand. Farmers and growers are more likely to trust a company with a strong scientific research and development base.
In order to enhance its research base, Syngenta also participates in exchanging technology with other research organisations. Although patents protect a business' intellectual property, they can slow down the speed of research. By agreeing to exchange technology with similarly placed organisations, Syngenta and the agrichemical industry keep R&D moving forward and gain mutual benefit.
Syngenta | Product design through research and development