Strategic orientation, innovation patterns and performances of SMEs and large companies

Abstract

Purpose

The purpose of this study is to examine the similarities and differences in the strategic orientation and innovation patterns of small to medium‐sized enterprises (SMEs) and large companies and to investigate their implications for market performance.

Design/methodology/approach

Miles and Snow's 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 are 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.

Citation

Kumar, K., Boesso, G., Favotto, F. and Menini, A. (2012), "Strategic orientation, innovation patterns and performances of SMEs and large companies", Journal of Small Business and Enterprise Development, Vol. 19 No. 1, pp. 132-145. https://doi.org/10.1108/14626001211196442