Before embarking on the lengthy and risky process of performing our own R&D, we prefer to perform a ‘make or buy’ analysis and decide whether or not the new R&D project is justified. Factors that influence our decision include the ability to protect the innovation, its timing, risk, and cost. For a successful product line with relatively long life, acquisition of technology is more costly, but less risky, than technology development.

If the market growth rate is low or moderate, in-house or contracted R&D may be the best means to obtain the technology. On the other hand, if the market is growing very fast and competitors are rushing in, the ‘window of opportunity’ may close before the technology has been developed by the new entrant. In our case, we are fully prepared to acquire the technology and related know-how, in order to enter the market before it is too late.