Combining Innovation and Diversification Strategy: The Case of <I>PosteMobile</I> in Italy

Abstract

During the last decades, innovation and diversification increasingly gained the attention of both scholarly and business communities as valuable strategies for achieving sustainable competitive advantage. From a strategic management perspective, firms need to develop the capacity to formulate business ideas, to assess and select them, and to implement them effectively if they are to develop economically viable and high-growth business ventures. Firms, however, may not necessarily possess the requisites for effectively innovating and diversifying their business activities. The entry of the Italian incumbent postal operator – Poste Italiane group – into the mobile telecommunication industry – through the subsidiary PosteMobile – stands as an exemplar case of innovation and diversification strategy implementation. Established in 2007 as a Virtual Mobile Network Operator (VMNO), PosteMobile exploited strategic assets and capabilities of Poste Italiane group to generate a unique offer through the convergence between communication and financial services. Based on this case, the aim of this paper is to develop a theoretical account of the process of diversification into related business industries, and to contribute to practical argumentation about the strategic behaviour of postal industry incumbents.