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In this article, the authors suggest a method to utilize the existing innovative potential of online communities by integrating its members virtually into new product development. The introduced concept of community based innovation (CBI) which is founded on groundwork of social exchange and interaction theory was explored, tested and refined in several already conducted business projects in the consumer goods sector. As result of this action research the authors illustrate CBI as a practitioner's guideline consisting of four systemized steps along one case study in the automotive industry. The presented study helps to get a deeper understanding and a more detailed overview concerning the procedures and activities used in practice.