Effective innovation strategies for incumbent firms

How can incumbent firms effectively pursue their innovation strategy and journey by making the right choices in terms of time, location, technology and path?

This dissertation focuses on effective innovation strategies for incumbent firms or innovation strategies that pay off. How can incumbent firms reconcile exploration and exploitation as part of their innovation strategy? For example, should they invest in both activities simultaneously or can they first invest in one activity and then in the other, i.e. sequentially? Another question is where these activities should take place? Should exploration and exploitation take place in spatial proximity such that exploration and exploitation activities occur close to each other in terms of geographical distance? Or should firms spread their exploration and exploitation activities around the globe where exploration takes place in one region and exploitation in another? Lastly, which other factors play a crucial role for effectively pursuing innovation within incumbents? How decisive is technology in terms of technology leadership and a firm’s technological portfolio? And what about the innovation journey from idea generation until introduction on the market?

This dissertation entails four studies that focus on different aspects of firm’s innovation strategies. First, we apply a multilevel approach. Chapters two and three focus on the firm and its overall innovation behavior, chapters four and five focus on a particular innovation within the firm. These different views, i.e. broad and narrow or general and detailed, enable a comprehensive and thorough analysis concerning effective innovation strategies. Besides, we study firm strategies and practices in its geographical and industry context. Second, we look at four perspectives on effective innovation strategies: timing, location, technology and path to obtain in-depth insights into the complexity of managing and executing a firm’s innovation strategy.

Examining the four perspectives on innovation strategies (timing, location, technology and path) requires the application of more than one methodological approach. In order to identify effective innovation strategies in terms of financial, technological and market performance, longitudinal datasets are statistically analyzed in different ways (see Chapters 2, 3 and 4). Although these analyses provide valuable insights about the strategies that firms can enact to balance exploration and exploitation, a more thorough understanding is possible through case study research (see Chapters 2 and 5).  In this respect, chapter five examines the innovation journeys of two competing firms through a detailed comparative case study design.