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Issues in dealing with innovative business ideas

by on January 20, 2010

We are living in an industrialized century in which innovation is a must for an organization to survive. Innovation is now a key for the growth and survival of most of organizations (IBM, 2006). After reviewing several prominent real industrial case studies, I will only discuss the two common types of faults most innovation managers make when they are faced with a business innovation. These two categories are not mutually exclusive.

Faults in evaluating Business Innovations:

In the past few years, a handful of organizations have fallen behind the others in a certain market due to their inappropriate responses in evaluating, perceiving and understanding new business ideas or innovations. These inappropriate responses cause organizations not only to fall behind others, but also to blind to unexplored markets. In evaluating process, there are two ways organizations could make mistakes in evaluating innovations: under-estimating or over-estimating, leading to bad decisions in choosing which innovations to invest in. When an organization under-estimates an innovative idea, they strategically miss a chance to advance their competitors. On the other hand, when an organization over-estimates an innovative idea, it mistakenly invests huge resources into developing the idea, which will not yield the falsely expected results. In both cases, the inappropriate evaluation could lead an organization into serious problems, perhaps even bankruptcy.

Faults in exploiting business innovations:

Exploiting business innovations means not only its innovation technologies, but also the partnership it has with its customers. This paper argues that even though managers have everything in place: an innovative idea, a dominated market and key knowledge information, they sometimes cannot realize the potential value of the idea.

Reference of this summary:
o IBM. (2006). Business model Innovation – The new route to competitive advantage. Retrieved January 8, 2010, from

Tien Nguyen


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