Sustaining Industry Leadership Through Innovation Strategy Archetypes

Abstract

The ability to innovate and exploit innovations globally in a rapid and efficient manner is a significant source of competitive advantage. However, the management of innovation is made difficult by the complexity, unpredictability, and pace of turbulence in the environment, which compresses the time horizons for strategic planning. The main purpose of this study was to investigate innovation management practices in technology-intensive industries and to explore their relationship to company performance. A non-probability judgment sample of companies listed on the Johannesburg Stock Exchange (JSE) was taken. The study makes a contribution to the field of strategic management research by integrating the archetypes of several previous studies to derive a more comprehensive taxonomy of innovation strategy archetypes. Two distinct innovation strategy factors obtained with the analysis were proven to positively influence the company performance archetypes and were classified as New Product Innovation and Process Innovation factors. The results show that innovation strategy choices can significantly affect company performance. It thereby indicates which of the underlying archetypes have the strongest relationship with company performance. From an industry perspective, the greatest significance of these findings may be that they accentuate the importance of innovation policy in strategic management. The substantial differences in performance associated with the archetypes do not necessarily indicate that a given company should choose a particular innovation strategy, but rather indicates that innovation policy decisions may have a substantial leverage on a companys performance and should be analysed and exercised with care.