This paper describes a decision-making framework for Research and Development (R&D) strategy development using an adaptation of quality function deployment (QFD). Many manufacturing companies are facing challenges in strengthening their competitiveness to survive in an uncertain and fierce competitive businesses environment. Decision-making on R&D strategy, not only for incremental innovation, but also for radical innovation, is essential for the sustainable future of the company. There are well-structured methodologies for routine product development tasks that help planning and decision-making. QFD is one of the most well known tools for product development that uses matrices to identify relative worth of product requirements from market information and flow the requirements down to more detailed decisions. However, in the R&D strategic planning process that occurs prior to product development, there is little work utilizing structured methodologies such as QFD. This paper presents a new usage of QFD in the R&D strategy development process to cover both incremental and radical innovation. Market-pull R&D leads to incremental innovation of the company, and QFD helps identify new technology requirements using future market predictions. On the other hand, technology-push R&D seeks radical innovation; an inverse usage of QFD that defines new customer needs from new technology development can support a step-by-step approach for future business creation in this context. The paper includes a detailed example from the medical device industry that demonstrates the utility of the method in R&D strategy decision process.

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