Radical and Incremental Innovation Effectiveness in Relation to Market Orientation in the Retail Industry: Triggers, Drivers, and Supporters

Radical and Incremental Innovation Effectiveness in Relation to Market Orientation in the Retail Industry: Triggers, Drivers, and Supporters

Michael Lewrick (University Ulm, Germany), Maktoba Omar (Edinburgh Napier University, UK), Robert Williams Jr. (Susquehanna University, USA), Nathalia C. Tjandra (Edinburgh Napier University, UK) and Zui-Chih Lee (Susquehanna University, USA)
DOI: 10.4018/978-1-4666-8297-9.ch011

Abstract

The retail industry market environment is very competitive; thus, in order to maintain their competitive advantage retailers are required to continuously come up with innovative offerings and systems. This chapter aims to provide useful insights for the retailers regarding the correlation between market orientation and innovation. The chapter illustrates the differences in start-up and mature companies, and reveals new insights with regard to market orientation and its constituent elements, and its relationship with both incremental and radical innovations. Readers learn that strong competitor orientation, a key ingredient of market orientation, has a positive relationship to incremental innovation for start-up companies, but it is counterproductive for mature companies, where a strong customer orientation is associated with radical innovation. The focus is to understand the dynamics of the entrepreneur versus manager during the transition process as a company grows.
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Introduction

The business demands of a decentralized, networked, globalized, post-industrial environment forces enterprises to respond dynamically, and to continuously adapt their innovation style to not only prosper, but to survive. The first objective of this chapter is to evaluate the current level of technology innovation and the components of market orientation in general, and within the retail sector specifically. The second objective is to empirically investigate and discuss the link between market orientation and innovation within the context of start-up and mature companies. The final objective is to provide solutions and recommendations as to how retail companies can enhance their performance and encourage innovation. The chapter acknowledges that innovators improve competitive advantage, foster growth, and create opportunities in new markets, thus it investigates the transformation process in the growth of innovative companies by analyzing the effects of different parameters of market orientation on radical and incremental innovation. Finally, it looks at the influencing factors that change during implementation of different innovation styles.

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