The impact of a company's business strategy on its technological competence, network competence and innovation success

Abstract

This paper discusses the dual nature of the key to competitiveness in the network economy: On the one hand, a company needs technological competence in order to add value to products and processes. On the other hand, companies need to develop network competence in order to link their organization to other players in the market to allow interactions beyond organizational boundaries. In this paper, a basic framework for the successful implementation of a technology-oriented business strategy is developed, consisting of four elements: business strategy, network competence, technological competence and innovation success. The model is empirically tested using a database of 308 German companies. The results show that both network competence and technological competence have a significant positive impact on a company's innovation success. Furthermore, the results suggest that a company's technological strategy supports the development of both network and technological competencies.