Research and development (R&D) is a major part of the business in the 21st century. Most companies are taking any solutions based on research and development. It is very important as the level of competition and production processes, especially in the field of marketing where firms are paying attention to customers and competitors to keep up with all the new trends in order to continuously meet the needs of customers. From the other hand, research and development are very hard to control, so high costs of R&D (spendings on R&D) does not guarantee high profits, and hence the proportion of high creativity or occupied in the market. Overall, R&D activities are a group of specialized people who belong to the company and can be passed on a contract basis for a short time for research organisation. In context of profit, R&D attach linked to long-term perspective in the work of science and technology, using the same methods of scientific research but aims for a good result with a large financial income.
However, the main point is how much their assets company could spend for R&D, what is the frequency of reinvesting in R&D to make firm more profitable and guarantee high level of technology.
As shown by A. Cuervo-Cazurra and C. Annique Un each company has three main strategies in case of the frequency of investing in R&D. First one is 'always invest in R&D', second one is 'never invest' and the last one is 'sometimes invest'. 'Firms which choose third strategy could also follow several substrategies: (a) start investing , where a firm that did not have R&D investments starts making them on a continuous basis; (b) stop investing, where a firm that had continuous R&D investments stops investing; and (с) vary investing, where a firm has R&D investments in some years, not in others, and yet again in others.' According to internal knowledge resources, that are published in Strategic Management Jouranl (2009) it could be seen that firms which do not have...