How to renew business strategy to achieve sustainability and circularity? A process model of strategic development in incumbent technology companies

Abstract

AbstractStrategic development to promote sustainability and circularity challenges incumbents to fundamentally renew their way of doing business. However, the management of this type of strategic development process, that is, strategic renewal aiming at achieving sustainability, remains largely unknown. Therefore, we investigated what constitutes incumbents' strategic renewal aimed at achieving sustainability and how to manage each stage of this process. We conducted a single‐case study of the incumbent tech company, Neste Oyj, which is renewing from a fossil‐based business to a sustainable and circular business. We analyzed multisourced interview‐ and document‐based data collected from a 25‐year longitudinal case study by applying a processual approach and the critical incident technique. We proposed an empirically based process model of business strategy renewal comprising five stages, each of which follows the subprocesses of strategic formulation, implementation, and evaluation. The findings and the process model extend the theoretical understanding of incumbents' business strategy development to achieve sustainability and circularity. The proposed model will enable managers to understand what management issues to focus on and what actions are needed at each stage of the strategic renewal process.