Developing New Products and Services

CHAPTER 14

Re-priming the Business Using Real Options Concepts

It does not matter how innovative or how much money the current business is making. There is a life cycle for products and technologies, and eventually, the business will decline unless it can find new opportunities. The business needs to be constantly re-primed with new products and services or it will fade and dissolve (see Figure 14.1). Critical in re-priming a business is scalability of the business. Scalability means that the business can shrink or grow very quickly with minor changes in the cost structure. Ideally, the ability to grow will not require a large change in variable costs, perhaps even decreasing variable costs and little increase in fixed costs. In addition, a ...