Final answer:
The question focuses on how Gillette's commitment to research and development led to the creation of customer value via their Fusion and Mach 3 shaving systems. R&D is intrinsically linked to a company's ability to innovate and maintain market competitiveness, thereby creating superior products that fulfill consumer requirements. Also, investments in R&D that encompass social benefits reflect a growing trend in combining business objectives with societal good.
Step-by-step explanation:
The student's question explores how Gillette's core competency in research and development (R&D) led to the creation of superior customer value through the development of the Fusion and Mach 3 shaving systems. In business, R&D is a critical function for companies that aim to maintain a competitive advantage through innovation. Notably, Gillette's investment in R&D enabled them to design cutting-edge products that aligned closely with consumer needs for high-quality shaving experiences, thereby exemplifying the direct connection between sustained R&D investment and the generation of enhanced customer value.
Given the importance of R&D, a firm like the Gizmo Company may invest in new product development expecting financial returns and societal benefits. If a company pursues investments that offer additional social benefits, they are not only contributing to their bottom line but also to the overall well-being of society. For example, an investment yielding a 6% return for the company and adding a 5% social benefit would effectively have an 11% return when considering the broader impact. Such an approach to R&D can be particularly appealing to socially mindful investors and customers who value corporate responsibility.
In the context of product improvements leading to a 'consumer treadmill,' there is an ongoing push for companies to continually innovate due to market pressures, customer expectations, and economic demand. This scenario underscores the vital role of R&D in fostering business growth and addressing consumer desires for improved or new products. While important for economic activity, it also raises questions about sustainability and the implications of consumption patterns on society.