Analysis of R&D portfolio strategies for contract competition

The authors extend earlier technology assessment methods in two ways. First, multiple attributes of product quality and a firm´s innovative strength in the respective technologies are viewed in aggregate, so as to balance the R&D portfolio and to maximize the expected returns on the discretionary funds. Secondly, rational competitor strategies, are obtained through simulation based on relative technological capabilities and R&D budgets. Both discrete project portfolios and continuous capabilities and effort levels can be considered. These extensions are illustrated with an example drawn from defense contracting