Abstract
PurposeWe address the following research questions: (1) Is the innovation trajectory of the acquirer affected by previous acquisitions? (2) In which direction knowledge recombination from the acquisition is pushed further? (3) Is the technological acquisition more a means for knowledge exploration and radical innovation or, on the contrary, a way for consolidating previous technological specialization?Design/methodology/approachThe nature of this study is exploratory; therefore, we opted for an inductive approach based on the L'Oréal case study analysis. Data were triangulated from different sources: (a) the L'Oréal website and press releases collected in the 2009–2015 period; (b) journal articles and books on the global cosmetics industry and the insightful work of Jones (2010); (c) the Questel Orbit database containing data on patents; and (d) the Zephyr – Bureau van Dijk database containing information on the acquisitions of firms.FindingsEmpirical evidence from a patent data analysis reveals a paradoxical path. On the one hand, acquisitions enable the company to explore new technological spaces; on the other hand, they allow it to reinforce a preexisting technological trajectory, even when the knowledge base of the target is distant from that of the acquirer. Thus, in our case study, the absorption and recombination of knowledge from a variety of domains support specialization more than diversification technology strategies.Originality/valueWe add to innovation management literature a new perspective, by offering a detailed analysis, through patent data, of the knowledge recombination process, led by technological acquisitions.
Highlights
Our work offers an original perspective of analysis on how technological acquisitions and knowledge recombination shape the innovation trajectories of the acquirer company
Based on the theory of technological acquisitions and knowledge recombination, our work aims at answering three original research questions: (1) Is the innovation trajectory of the acquirer affected by previous acquisitions? (2) In which direction knowledge recombination from acquisition is pushed further? (3) Is the technological acquisition more a mean for knowledge exploration and radical innovation or, on the contrary, a way for consolidating previous technological specialization?
4.1 Characteristics of L’Oreal’s patent portfolio To deepen our understanding of L’Oreal’s technological trajectory, and evaluate how it has been affected by technological acquisitions, we mapped the characteristics of L’Oreal’s patent portfolio, focusing on the technological classes of the patents
Summary
Our work offers an original perspective of analysis on how technological acquisitions and knowledge recombination shape the innovation trajectories of the acquirer company. It does so by embracing an inductive research design, drawing on a single but very powerful case study, which analyses detailed acquisitions and patent data information of a market leader in the beauty industry, namely L’Oreal. The beauty industry represents a peculiar and paradoxical case that illustrates the complexity of the knowledge recombination process, which deserves scientific attention from the innovation management scholars (Kumar et al, 2006). The current dominant paradigm is the open innovation model (Chesbourgh, 2003), which has come to constitute a new organizational imperative. Some authors have focused on strategic alliances
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