Transformation in a mature industry: the role of business and innovation strategies

Other conference contribution, 2019

This paper aims to investigate the relationship between business and innovation strategies in a time of industry transformation. The paper conceptualizes business and innovation strategies based on two main dimensions, the competitive position and the resource position. For the business strategy, the paper addresses Porter’s (1980, 1985) generic competitive strategies and the resource-based view (Barney, 2001b). For the innovation strategy, the paper addresses the dimensions of technology strategy (Zahra and Covin, 1993) and the degree and the type of ambidexterity. The empirical case study builds on 15 interviews with 8 producers in the Swedish pulp and paper industry, which currently faces transformation pressures. The interview results are also complemented with the results of the survey sent to all pulp and paper plants in Sweden. Regarding business strategies, the results reveal three strategic groups, with different characteristics in terms of both competitive position and resource position. For innovation strategies, the results show that the companies mainly differed with regard to competitive positioning, while with regard to resource position, they were more similar. In particular, a common for most companies type of ambidexterity strategy, market-driven exploitation, is revealed and explained. In terms of interrelation between the business and innovation strategies, the results complement previous research by showing a clear relationship between the two strategy types for competitive position dimension, and by providing a more detailed understanding of this relation within the resource dimension. The paper provides a complementary explanation of the observed slow transformation of the industry, highlighting the strains such a transformation puts on the involved companies in terms of the trade-offs involved in changing strategic direction while retaining core capabilities.