Corporate Innovation Generates Shareholder Confidence

11 Pages Posted: 7 Oct 2019

See all articles by Louis Bouwer

Louis Bouwer

Innovation Management Research Institute (IMRI)

Date Written: February 1, 2019

Abstract

This article will illustrate how a Strategic Corporate Innovation Management™ system can generate shareholder confidence through the continued and timely introduction of newly anticipated inventive solutions that will successfully be adopted by a specified target market.

In this context, shareholder confidence is the result from a positive perception about a corporation, where the acquisition of shares is based on the expected or predicted financial performance of the corporation in the foreseeable future.

With the assumption that shareholder confidence has a direct correlation with share price, this research will illustrate there is also a direct correlation between the introduction of new inventions in the market (as corporate innovation) and the share price. With the share price as the common factor, there should then also be a direct correlation between corporate innovation and shareholder confidence.

Tesla Motors’ historic share price was analyzed in comparison with product release dates as a case study. It was possible to observe from the “share price vs corporate innovation” graph that shareholder confidence increased just before new inventive solutions were launched into the market. It was also observed that in order to sustain the share price value and market capitalization, it was important that the market successfully adopt the new inventive product as well.

As an additional benefit from this approach to deliver shareholder confidence through corporate innovation, the corporation itself will grow organically.

Keywords: Corporate Innovation, Innovation Strategy, Shareholder, Share Price Growth, Revenue Growth, Earnings Growth

JEL Classification: O30, O31, O32, O33, O40, O43, O44, O47

Suggested Citation

Bouwer, Louis, Corporate Innovation Generates Shareholder Confidence (February 1, 2019). Available at SSRN: https://ssrn.com/abstract=3334543 or http://dx.doi.org/10.2139/ssrn.3334543

Louis Bouwer (Contact Author)

Innovation Management Research Institute (IMRI) ( email )

Hartbeespoort, North West 0216
South Africa

HOME PAGE: http://www.imri.co.za

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