Fear of Loss of Revenues

If a firm’s innovation renders its existing products or services noncompetitive, the firm loses the revenues from the old product. Since a firm’s stock value usually depends on expected earnings, such a loss in revenues and accompanying profits may result in a drop in a firm’s value. The fear of such a loss may result in the firm being reluctant to adopt the invading innovation. Such a loss in  revenues can also have organizational consequences. If the source of power for the most powerful in the firm is the revenues from the old product, the political coalition may impede implementation.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact Asif J. Mir.