Performance implications of combining creative and imitative innovation strategies

Abstract

PurposeThe purpose of this study is to investigate the performance effects of pure innovation strategies (creative and imitative) versus the combination of the two innovation strategies (combination innovation strategy) and to determine whether implementing the combination innovation strategy produces an incremental performance benefit over the pure innovation strategies.Design/methodology/approachWe used archival data from the Korea Innovation Survey (KIS) completed by a large sample of South Korea manufacturing firms and some financial data provided by the South Korea Science and Technology Policy Institute (STEPI). We used hierarchical multiple regression analysis to analyze the data from 486 firms.FindingsThe findings indicated that firms implementing any of the three innovation strategies of creative innovation, imitative innovation and combination innovation outperforms noninnovators. Results also show that while firms implementing the combination innovation strategy perform better than those implementing imitative innovation strategies, they do not significantly differ in performance from firms implementing the creative innovation strategy. Moreover, we find no performance difference between creative innovation and imitative innovation strategies.Practical implicationsThe study highlights the importance of combination innovation strategies for manufacturing firms that rely on imitative innovation strategies to gain competitive advantage in the market. However, it demonstrates that firms that are successful in using creative innovation strategies must use their resources in exploiting that advantage.Originality/valueAlthough extant studies have demonstrated the importance of both creative innovation and imitative innovation strategies in enhancing performance, it is not clear whether implementing both strategies at the same time has incremental value for firms. This study focusses on empirically examining the performance implications of creative innovation and imitative innovation strategies, and whether the pursuit of a combination innovation strategy (simultaneous pursuit of both innovation strategies) provides any incremental benefit is unique.

Does an Imitation Strategy Promote Long-Term Firm Growth in a Dynamic Environment? A Meta-Analysis

“…This moderating variable refers to the time-period over which the firm performance was measured. The literature has shown that an imitation strategy might have differential effects on achieving competitive superiority over the long term compared to the short term because an imitation strategy might be more challenging to maintain a long-term competitive advantage ( Moon and Acquaah, 2020 ). Consistent with previous studies ( Mathias et al, 2018 ; Nason and Wiklund, 2018 ), we chose 5 years to characterize the differences between short term and long term performance.…”

“…Some studies have indicated that an innovative strategy can lead to more technological strengths and size-related flexibility leading to a higher firm performance ( Giachetti and Torrisi, 2018 ; Ali, 2021 ). In addition, research has shown that an imitation strategy may not guarantee the short-term survival as well as long-term competitiveness of an enterprise ( Moon and Acquaah, 2020 ). Considering that in a dynamic environment, the competitive advantage for a firm using an imitation strategy is of rather limited value, enterprises still have to become more innovative to gain marketing advantages and create value over the long term.…”

“…However, due to an increasing number of competitors in the market even if consumer demand was still growing, Dingding failed to survive in the Chinese sharing bicycle market. In other words, although enterprises are likely to gain short-term benefits through an imitation strategy, this strategy may be limited in providing superior firm performance in the long run ( Moon and Acquaah, 2020 ). Furthermore, as consumers move up the “quality ladder” and no longer be satisfied with the original imitation products ( Grossman and Helpman, 1991 ), they are opting for companies accounting for new innovative features of products and services.…”

“…Additionally, some research revealed that an imitation strategy may reduce innovation gains leading to a negative impact on firm performance ( Zheng Zhou, 2006 ; Bouncken et al, 2015 ; Xia and Liu, 2017 ). Meanwhile, an imitation strategy seems hard to sustain while fostering the survival and competitiveness of an enterprise ( Moon and Acquaah, 2020 ). In general, there has hardly been any consensus in academic circles on the extent to which an imitation strategy might promote firm growth over the long term in a dynamic environment.…”

“…As a form of organizational learning ( Yang and Hyland, 2006 ), imitation also needs to be examined within the external dynamic environment to account for adaptation of the firm during the different growth stages ( Teece et al, 1997 ). These external factors influencing the implementation process of an imitation strategy are industry conditions ( Perla and Tonetti, 2014 ; Buera and Oberfield, 2020 ; Baslandze et al, 2021 ), the specifics of the countries under investigation ( Williamson and Cable, 2003 ; Zheng Zhou, 2006 ; Lee and Zhou, 2012 ), and the time horizon of firm performance ( Kim and Nelson, 2000 ; Moon and Acquaah, 2020 ). However, little work has been done to study the effectiveness of an imitation strategy by focusing on these factors.…”