Knowing a winning business idea when you see one

Identifying which business ideas have real commercial potential is fraught with uncertainty, and even the most admired companies have stumbled. In this article, W. Chan Kim and Renee Mauborgne introduce three tools that managers can use to help strip away some of that uncertainty. The first tool, "the buyer utility map," indicates how likely it is that customers will be attracted to a new business idea. The second, "the price corridor of the mass," identifies what price will unlock the greatest number of customers. And the third tool, "the business model guide," offers a framework for figuring out whether and how a company can profitably deliver the new idea at the targeted price. Applying the tools, though, is not the end of the story. Many innovations have to overcome adoption hurdles--strong resistance from stakeholders inside and outside the company. The authors conclude by discussing how managers can head off negative reactions from stakeholders.