Relationship between competitive strategies and innovation
Keywords:
Competitive strategy, innovation, performanceAbstract
Abstract
By adopting innovation firms intend to respond to environmental changes either by introducing new products (differentiation strategy) or by increasing operational efficiency (cost leadership strategy), in both cases companies attempt to improve their performance. The purpose of this paper is to further our understanding of the relationships among competitive strategies, innovation types, and firm performance in a sample of Mexican companies. Results indicate that companies that scan the environment to determine if technological changes affect their products (services) prefer a differentiation strategy. Also, companies with differentiation strategy thrive to develop new products for their market. Implications for managers are included.