The purpose of this paper is to study the nature of the strategy formation and its impact on firm performance in relation to market development and product innovation.
The paper is based on an empirical study of 91 Austrian SMEs which covers a time period of ten years. Strategy formation was captured by an analysis of strategic intentions and corresponding actions in two surveys carried out in 1995 and 2003.
The study finds no direct association between strategy formation and performance, though, emergent strategists had less often a growth orientation. Taking into account industry dynamics, shows, contrary to our expectations, that companies which employed an emergent market development strategy achieved higher sales growth in stable than in dynamic industries.
The question of the superiority of planned vs emergent strategies has a long debate in strategy formation literature. The authors contribute to this question by investigating the role of different information sources for the formation of market and product innovation strategies and its impact on the performance in different environments over a ten-year time period.
The author would like to thank Torben Andersen, Gregory Dess, Steven Floyd, Nicholas O’Regan and Bill Wooldridge for their helpful comments on earlier versions of this paper.
Leitner, K.-H. (2014), "Strategy formation in the innovation and market domain: emergent or deliberate?", Journal of Strategy and Management, Vol. 7 No. 4, pp. 354-375. https://doi.org/10.1108/JSMA-02-2014-0015
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