PixelPark (PP) develops mobile games. After R&D, it has created a new game engine and a distinctive game title and logo. PP is considering copyright and trademark protection before launch.

Financial data for the first year:

MobiMeals (MM) is an online food delivery business. Customer complaints suggest an unmet need for faster delivery in city centres. MM has used R&D to test drone delivery, which could be a disruptive innovation in its market.

Data for the drone delivery trial:

AquaPure (AP) has developed a new water filter mechanism after two years of R&D. AP is deciding whether to apply for a patent. Managers believe that without a patent, competitors could copy the mechanism immediately and reduce AP's contribution.

For this calculation, assume that competitors copy the mechanism immediately if AP does not apply for a patent, and that the patent prevents copying during the three-year period.

Monetary amounts are in thousands of US dollars; percentages and time periods are stated as shown:

VoltVelo (VV) manufactures electric bicycles. It is comparing two R&D options: an incremental battery upgrade to its existing bicycle and a disruptive subscription-based bicycle-sharing platform.

Forecast first-year data, in thousands of US dollars except where stated:

Assume that the forecast average of 1 200 subscribers remains constant in each month of the first year.

SanaSkin (SS) is a start-up that produces skincare products for people with sensitive skin. After two years of R&D, SS has developed a new plant-based formula that reduces skin irritation for many users. SS also created original online videos explaining how the formula works, and a distinctive leaf-shaped logo used on all packaging.

SS plans to sell through pharmacies in its home country and then enter two overseas markets. Large cosmetics companies have greater financial resources and may imitate successful products quickly. The founder is considering whether SS should spend a significant part of its launch budget on intellectual property protection, including patents, copyrights and trademarks, or use the money for promotion and production capacity.

EcoInk (EI) produces environmentally friendly printing ink. EI is considering an R&D project to develop a lower-temperature production process. The finance director wants to compare the expected financial gain from the R&D project with an alternative staff training programme.

Data for the R&D project, in thousands of US dollars:

HarbourStay (HS) is a medium-sized hotel chain operating in coastal cities. Its occupancy rate has fallen because several larger hotel chains now offer digital check-in, personalized room settings and lower prices. HS has a strong reputation for friendly staff, but recent online reviews show that business travellers are dissatisfied with slow check-in and inconsistent room service.

The operations director proposes investing in research and development (R&D) to develop an app-based service that would allow guests to check in before arrival, choose room settings and request services from their phone. The marketing director argues that HS should not take the risk of R&D and should instead spend the money on promotion and refurbishing hotel lobbies. HS has limited retained profit and would need a bank loan for part of the R&D project.

Selected forecast financial and market information for the two options is shown in Table 1.

LumaFit (LF) is a medium-sized manufacturer of home exercise equipment. LF's sales of treadmills and exercise bikes have declined as customers increasingly use cheaper online fitness classes and compact equipment suitable for small apartments. Customer reviews suggest that many users stop using LF's products because they are difficult to store and do not connect well to fitness apps.

The operations director wants LF to invest heavily in research and development (R&D) to design a foldable exercise bike with built-in app connectivity and a quieter motor. This would require hiring software engineers and delaying a planned expansion of LF's retail showroom network. The finance director is concerned that LF has limited retained profit and that competitors may copy any new features quickly.

NutriTag (NT) is a start-up that has completed R&D on a reusable food label scanner. The scanner connects to a phone app and alerts consumers with food allergies when a packaged product may contain unsafe ingredients. NT's engineers developed an original scanning mechanism and software code. Its marketing team created the brand name NutriTag and a distinctive green shield logo.

A large supermarket chain is interested in selling the scanner under NT's brand. However, NT's directors are concerned that competitors could copy the scanning mechanism, imitate the app design or use a similar brand name. NT is considering applying for a patent for the scanning mechanism, registering a trademark for the brand name and logo, and formally registering copyright for the app interface and training materials. The finance director argues that NT should launch quickly without spending heavily on intellectual property (IP) protection.

Selected forecast financial information on launch with and without IP protection is shown in Table 1.

QueueLess (QL) develops systems for entertainment venues such as theatres, museums and sports arenas. Its current product is a ticketing platform used by 60 venues. Customer feedback shows that venue managers want shorter queues at entrances and better data on visitor movement inside venues.

QL's R&D team has proposed two innovation options. Option A is an incremental innovation: improving the existing ticketing platform by adding faster barcode scanning and a dashboard showing peak arrival times. Option B is a disruptive innovation: creating a new subscription-based crowd-management system using wearable visitor passes and live movement data, which would change how venues manage visitor flow. Option B would require new specialist staff and could raise privacy concerns.

The managing director believes QL should choose only one option because it cannot finance both. Selected forecast information for the two R&D options is shown in Table 1.

ReWear Pathways (RWP) – a social enterprise

Read the resources and answer the questions that follow.

Resource 1 — Background

ReWear Pathways (RWP) is a social enterprise that collects donated business clothing and adapts it into affordable interview outfits for unemployed young people. RWP also runs workshops on interview confidence and basic garment repair. Its mission is to increase employability while reducing textile waste. RWP currently sells through charity partners and a small online store. Demand is increasing, but many customers say they find it difficult to judge fit and style online.

RWP has no formal research and development (R&D) department. Product improvements are usually suggested by volunteers. The founder is considering creating a small R&D team for 18 months to develop a low-cost digital fitting service and a redesigned modular clothing range that could be altered more easily.

Resource 2 — Selected market research from RWP customers and partners

Resource 3 — Financial and operational information

RWP has a small annual surplus and limited cash reserves. A grant-making foundation has offered up to 60% of the cost of an R&D project if RWP can show that the project addresses an unmet customer need. The R&D work would require a part-time software developer, a garment technician and customer testing sessions. Some volunteers are worried that using digital tools may make RWP feel less personal.

Resource 4 — Options under consideration

Option A: incremental R&D to improve the existing online store, including better sizing guides, customer videos and a more consistent alteration process.

Option B: more ambitious R&D to develop a digital fitting service using customer measurements and a modular clothing range. This could differentiate RWP but would require new skills, data protection procedures and possible trademark protection for the service name “FitForward”.

Resource 5 — Statement from RWP’s founder

“R&D must not become innovation for its own sake. We need to solve the real barriers stopping young people from accessing clothing that gives them confidence at the right time.”

HearBridge Access (HBA) – a social enterprise

Read the resources and answer the questions that follow.

Resource 1 — Background

HearBridge Access (HBA) is a social enterprise that designs low-cost hearing support devices and training materials for adults in low-income communities. HBA sells devices to community health clinics at close to cost price and uses donor funding to train local health workers. Its mission is to reduce social isolation caused by untreated hearing loss.

HBA’s R&D team has developed a prototype hearing-support device that uses a simple noise-filtering process. It also created original training videos and a distinctive name and logo for the service: “ClearCircle”. The device is not as powerful as premium hearing aids, but clinic trials suggest it is easier to maintain and much cheaper.

Resource 2 — Prototype trial results from 12 clinics

Resource 3 — Intellectual property issues

A university partner says the noise-filtering process may be patentable, but patent applications and legal advice would be costly. Copyright already applies to HBA’s original training videos, although enforcement online may be difficult. A marketing adviser recommends registering “ClearCircle” as a trademark before HBA expands to other regions. Some board members argue that HBA should keep the design open-source to increase access quickly.

Resource 4 — Financial and partnership information

HBA has been offered a low-interest social-impact loan for manufacturing equipment. A medical technology company has offered to license HBA’s design and manufacture the device at scale, but wants exclusive rights in two countries for five years. Several NGOs want HBA to expand rapidly and are willing to help with distribution if prices remain low.

Resource 5 — Quotation from a community health worker

“Patients do not need the most advanced device. They need something affordable, reliable and available now, with training that local staff can understand.”

HarbourStay (HS) operates six budget hotels near airports. HS competes mainly on price and convenience. Customer feedback shows that guests dislike slow check-in, inconsistent room cleaning and lack of flexibility when flights are delayed. HS has a traditional management culture and most employees have worked there for many years.

HS's directors are considering two R&D projects. Project A is an incremental innovation: improving the existing booking system, introducing digital room-cleaning schedules and adding self-service check-in kiosks in hotel lobbies. Project B is a disruptive innovation: replacing some hotel rooms with small sleep pods rented by the hour through a mobile app, targeted at passengers with long flight delays. Project B would require a new pricing model, different operations and negotiations with airport authorities.

SoilSense Commons (SSC) – a social enterprise

Read the resources and answer the questions that follow.

Resource 1 — Background

SoilSense Commons (SSC) is a social enterprise that helps small urban farms and community gardens improve crop yields while reducing water use. SSC currently sells simple soil-testing kits and provides free workshops in low-income neighbourhoods. Its social objective is to make sustainable food production more accessible.

SSC has carried out R&D for two possible innovations. The first is an incremental improvement to its existing soil-testing kit: clearer colour indicators, recycled packaging and a faster instruction process. The second is a potentially disruptive service: shared sensor boxes placed in community gardens, connected to a subscription platform that gives watering and planting advice. The platform would move SSC from selling kits to providing data-based advice.

Resource 2 — Selected information on the two R&D options

Resource 3 — Customer and community insights

Workshop participants like the simplicity of SSC’s current kits but often forget to test soil regularly. Several community garden coordinators say they do not want “another complicated app”. However, younger volunteers have posted social-media videos asking for real-time advice on watering because drought restrictions are becoming more frequent.

Resource 4 — Competitor and technology information

A commercial agriculture technology company has launched expensive sensor systems for large farms. SSC believes its community-based subscription platform could be a disruptive innovation for small gardens because it would change how customers access advice and pay for support. However, technology costs are falling quickly and competitors may enter if SSC proves the market.

Resource 5 — Statement from SSC’s operations manager

“Our current kit is trusted, but it does not change behaviour enough. The sensor platform could create more impact, but it would require skills and cash that we do not yet have.”