Business Strategy Analysis A) Key issues and actionable consequences 1) Invest more in R&D department of RLKa. If Lars decided to invest about $6 million more in research and development, it would be highly risky since the company's survival depends largely on the success of launching Ray's new product into the market.b. Since customers associate RLK with high-end audio-video design, investing money in research and development would increase their brand value and live up to consumer expectations of their highly innovative products.c. However, RLK's competitors are downsizing and outsourcing R&D and exploiting cost advantages. If RLK decides to invest more money in research and development and if the new product stalls at launch, it is in danger of going bankrupt. 2) Collaborate with Inova to work on the new product - IVida. Lars could get the software skills he needed from Inova for a fifth of what they would cost in the United States. The huge cost savings will be beneficial to the RLK in the short term, although there were also transaction costs and royalties to consider.b. One potential obstacle to outsourcing could be Ray, who has long opposed external involvement in research and development operations. He may not be satisfied with external ideas that compete with his own and therefore refuse to collaborate with Inova.c. RLK's organizational cultures are radically different from Inova. The huge cultural disparity can cause difficulties in cooperation. Additionally, time zone differences and distance will contribute to even more problems at hand. 3) Invest in marketing to develop brand value and meet customer needs. Keith suggested investing more in marketing to find out more about customers' wants and needs. However, this is not the root of the problem and marketing will not help solve the current crisis facing RLK.b. The question is whether RLK should leverage its brand value as it is known for its innovation and innovation capabilities. However, Lars must understand that outsourcing is not the only option and should consider more options and possibilities. B) Evaluation Criteria 1) Impact on RLK's R&D department – ​​Ray may have adverse reactions to the idea of ​​collaborating with Inova and therefore refuse to cooperate with them.2) Long-term feasibility and risk reduction of any possible action : The solution must be beneficial in the long term with the least risk involved instead of only achieving short-term cost benefits.3) Impact on financials – ability to generate revenue and increase profits with the launch of the new RLK product and the ability to achieve greater cost savings.