Exploring the R&D and profitability relationship in the cosmetics industry

Abstract

Research and development (R&D) is a fundamental business activity to enable efficient transformation according to MOEST, or Model of the Organization as an Efficient System of Transformation, by Mella (Mella, 2022; Mella & Gazzola, 2015). The R&D objective is to manage the production factor of ‘knowledge’. The innovative attitude allows the company to influence changes in the environment, realizing inventions (ideas) and proposing their implementation (Puddu, 1996). The R&D function must be integrated with other company activities, as marketing, production, financial management and in particular strategic planning, organization, planning and control. The aim of the present research is to analyze the relationship between R&D investments and company profitability in the cosmetics industry. Analyzing its fundamental features, it is considered significant to investigate their correlation, with particular reference to the Original Design Manufacturer (ODM) cosmetic companies. Afterwards the evaluation will concentrate on Intercos Group, a leading Italian company in Europe, even comparing its results with Asian companies, which are considered global leaders in the cosmetics industry.