Sunday, August 30, 2015

Framework for Trans-national R&D strategy

Multinational companies generally tend to have R&D concentrated at their parent company location. Having a closed setup in one place has its obvious advantages in terms of better coordination, efficiency and information security. 

However, multinationals do want to break the mould and connect with and learn from broader ecosystem around the world. The approach though has been more or less ad-hoc,
  • captive centres to fulfill an offset obligation or for access to cost effective talent
  • sponsoring research in relevant areas 
Some multinationals just do it since other are doing the same. 

A more structured and strategic approach can not only deliver operational benefits but can also build competitive advantage. This blog post would highlight a strategic approach to R&D setup and partnerships in different regions of the world.

A regional R&D strategy would be aligned and in sync with corporate and R&D strategy of the company. And it would have following three objectives as its corner stones:
  • Leverage strengths of the geographic region
  • Provide advantage over competition
  • Build strategic relations/assets for the company in that region

To build the above strategy, a broad based research would be required covering various aspects of the given region. 

To analyse the research data and derive meaningful insights, one could use a matrix layout to analyse and rank on multiple criteria. The outcome of the analysis has to be actionable insights related to the three corner stones mentioned above.

However, a strategy is never complete with an executable plan. Following framework is a good tool to derive and communicate the action plan.

For many companies, decision for expanding R&D outside home location is driven by operational and obligational considerations. However, companies gain to benefit more by treating it as a strategic move and putting more thought and diligence behind it.

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