The Case Study On Company Performance Under The Influence Of R&D Investment And Selling Expenses Of A Co.,Ltd

Faced with the diversified economic environment, R&D and marketing, as the drivingforce for rapid growth of enterprises, is arousing more and more attention. R&D createsvalue, while marketing delivers value. If the enterprise wants to keep lasting competitiveedge, it should attach great importance to the combination of marketing and R&D. Therefore,doing case-study on the relation among R&D investment, selling expense and companyperformance with using the finance data, has profound significance.This paper chooses A Co., Ltd. as object of study. It focus on the influence of the R&Dinvestment and selling expense on company performance. A Co., Ltd. is a listed company inbiological vaccine industry with the core competitiveness-R&D competence and marketingcompetenece, side by side. However, the finance performance is deceasing in recent yearswith the inceasing R&D investment and selling expense. Therefore, this paper aims toresearch how the R&D investment and selling expense influence the company performance.The first part introduces the research background and significance, and also gives thedefinitions of R&D investment, selling expense and company performance. Then, based onthe previous theories, it defines the study methods and contents.The second part, the case introduction, describes the basic background of A Co., Ltd.,and the company performance. Then, through comparison, the paper discovers that most ofthe performance indexes are decreasing while the R&D index and selling expense index aregrowing. Therefore, this paper raises the question how the R&D investment and sellingexpense influence the company performance.The third part gives the deep analysis and reasons discussion of the question raised in thesecond part through the following aspects-the influence of the R&D investment, sellingexpense and its joint effect on company performance. The research presents that thestrenghthen of R&D investment is inadquate, that the progress of R&D programs is slowerthan the plan, and that the result of R&D is not obvious. But the selling expense is higher thanothers and the market shares of self-created products are decreasing. All of these problems result in the decrease of company performance.Based on the above analysis, this paper draws the conclusion. Firstly, although the R&Dinvestment is growing, the strenghth is lower than the domestic and international companiesin the same industry. Secondly, the selling expense is heavy and increasing, higher than theindustry average data. It puts burden on the company performance. Thirdly, as the fruit ofR&D investment and selling expense, the products have a high gross margin which improvethe profitability dramatically and change the construction of profitability.Therefore, the case enlightenments, summarizes the enlightments to A Co., Ltd. and toother enterprises in biopharmaceutical industry. To A Co., Ltd, it should not only manage theR&D funds and the progresses reasonablly, but also control the selling expense. To otherenterprises, they should not only enhance the technology content of products, but also avoidthe phenomenon of “paying too much attention on marketing and too less on R&Dinvestment”.