PURPOSE: This study examines the similarities and differences in the strategic orientation and innovation patterns of SMEs and large companies and investigates their implications for market performance. DESIGN/METHODOLOGY/APPROACH: Miles and Snow's (1978) strategic typology is applied to 592 new products to determine their companies’ strategic orientations. Data collected over a two-year period by 62 companies in the Italian yogurt industry is analyzed. FINDINGS: The results show that, while large firms operate with a “prospector” orientation, SMEs have a “defender” or “reactor” orientation. Only a small number of SMEs can innovate successfully, and an ex post facto investigation reveals that these firms follow an "open innovation model”. ORIGINALITY/VALUE: The findings fill a gap in the literature by clarifying the similarities and differences in the strategic orientations, innovation patterns and performance of SMEs and large companies in a dynamic industry environment. The study also provides insights for managers in new food product development who are concerned about low rates of innovation and high rates of failure.
Strategic Orientation, Innovation Patterns and Performance of SMEs and Large Companies
KUMAR, KAMALESH;BOESSO, GIACOMO;FAVOTTO, FRANCESCO;MENINI, ANDREA
2012
Abstract
PURPOSE: This study examines the similarities and differences in the strategic orientation and innovation patterns of SMEs and large companies and investigates their implications for market performance. DESIGN/METHODOLOGY/APPROACH: Miles and Snow's (1978) strategic typology is applied to 592 new products to determine their companies’ strategic orientations. Data collected over a two-year period by 62 companies in the Italian yogurt industry is analyzed. FINDINGS: The results show that, while large firms operate with a “prospector” orientation, SMEs have a “defender” or “reactor” orientation. Only a small number of SMEs can innovate successfully, and an ex post facto investigation reveals that these firms follow an "open innovation model”. ORIGINALITY/VALUE: The findings fill a gap in the literature by clarifying the similarities and differences in the strategic orientations, innovation patterns and performance of SMEs and large companies in a dynamic industry environment. The study also provides insights for managers in new food product development who are concerned about low rates of innovation and high rates of failure.
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