Evaluation of innovative business models: Results

  • Goal of the project was to set up a sustainable evaluation logic for new business ideas and business models to ensure the targeted allocation of funds
  • Insights gained from the strategic logic of successful business models (e.g. fit with own competencies vs. market attractiveness, repeatability, scalability) were used to define the evaluation logic
  • New business models competing for corporate funds have to satisfy 6 key questions as part of the evaluation process. Hurdle rates are driven by the risk profile of the business model (primarily determined by the proximity to the core business and the development phase of the new business model)
  • Available capital was allocated to 5 risk groups. The average return across all 5 risk groups mirrors the company’s expected return of capital

 

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