The Role of Strategic Orientation in Business Innovation

Focusing on technology-driven industries, this paper describes a model by which it is possible to identify and evaluate business strategies according to a matrix of four generic strategy categories. The model may assist in assuring that business functional strategies fit the requirement of the adopted business orientation. The model is illustrated by our interpretation of past and present strategies followed by leading firms in a variety of industries. We identify four generic categories of business strategic orientations: strategies designed to reallocate earnings or acquire greater market share, strategies that expand the profit pool by implementing innovations, strategies designed to readjust competitive positions in a declining market, or strategies designed to capitalize on "the next big thing." Examples of hightech companies with one or more of these strategic orientations are provided. The framework presented in this article contributes to research in strategic management, and supports m anagers in making business decisions for high-tech companies.

I. Introduction

Innovation has been widely accepted as an important source of competitive advantage in technology-driven companies. Competitive advantage has a strong relationship to the strategy orientation of a business. Having been an extensively evaluated management theory for more than 50 years, the influence of an organization's strategic orientation upon market performance has been thoroughly documented. That influence is commonly referred to as strategic fit with extant business capabilities and environmental conditions [1]. A varied number of dimensions have been suggested as contributing to the evolution of strategic orientation, beginning with four components of strategy suggested by Andrews in 1971: market opportunity, corporate competence and available resources, management's personal values and aspirations, and obligations to society as well as to stockholders. Venkatraman proposed six dimensions of strategic orientation: aggressiveness, analysis, defensiveness, futurity, proactiveness, and riskiness [2] [3]. The concept has been applied in both public and private organizations, ranging globally from hospitals [4], retail furniture markets [5], to the U.S. defense industry [6] and many others.