Abstract
A firm’s strategic orientation determine its business direction and scope of operation. Several researchers have tried to identify how strategic orientations affect business development. However, only a few scholars have explored how strategic orientations shape a firm’s organizational capability. In addition, the extent to which radical innovation contributes to a firm’s operations has not been well researched. Given these research shortcomings, this study explores the integration of firms’ strategic orientations, radical innovation, competitive advantages, and business performance within a conceptual framework. A sample of 86 cultural and creative firms was obtained. The results of the regression analysis and of the PLS SEM model are compared in this study. Our findings suggest that factors from either market orientation or entrepreneurial orientation add to a firm’s radical innovation capability and adoption. Lastly, the brand advantage is identified to be the most important factor in firms’ performance after a radical innovation capability and product advantage. This paper offers several contributions to the research. First, it advances knowledge of the strategic orientations of cultural and creative firms in a developing market. Second, it demonstrates the usefulness of radical innovation capability in profiling the development of competitive advantages. Lastly, it adds to our understanding of factors that facilitate the business performance of cultural and creative entrepreneurs.
Highlights
A business strategy provides the theoretical basis for firms to achieve a competitive advantage in order to surpass their competitors
The second-order partial least squares (PLS) SEM analysis is undertaken to understand whether the factors as perceived by managers are significant enough to influence and enhance the firms’ radical innovation, which leads to a competitive advantage and improved business performance
Given the social commentary on firms’ strategic thinking and innovation types, this study suggests that it would be valuable for firms to consider the application of strategic orientation features developed by this study for developing radical innovations, competitive advantages, and performances in their business operations
Summary
A business strategy provides the theoretical basis for firms to achieve a competitive advantage in order to surpass their competitors. The above reviews have displayed the predisposing factors (e.g., strategic orientations) and benefits (e.g., competitive advantages or business performance) when exploring and discussing enterprises’ radical capability development or adoption. When discussing the antecedents of radical innovation, researchers have contended that the strategic orientations of enterprises are important factors in the level of firm innovation capability and adoption. The present study, integrates strategic orientations in constructing a framework to identify the determinants of a firm’s radical innovation and further links radical innovation to competitive advantages and business performance via C&C industry practices. In terms of business strategy theory, RBV, ground theory, and NPD, the present study addresses this problem by discussing two strategic orientations including radical innovation and competitive advantages (defined as product advantage and brand advantage) and business performance. The study concludes with the management implications, theory contributions, and future research suggestions
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