Effective innovation strategies for incumbent firms

There is no doubt, firms acknowledge the importance of innovation for survival and growth. They spend up to 25% of their revenue on research and development (R&D) and R&D spending continues to increase in all regions and nearly all industries. Unfortunately, innovation excellence cannot just be bought by spending more dollars on R&D. Despite the enormous amounts of money involved and a rich source of managerial literature that asks firms to invest in innovation and promises success in return, firms continue to struggle in capturing value from their innovation efforts. Innovation remains a difficult and often frustrating task for many of them. Innovation requires strategy. This dissertation focuses on effective innovation strategies for incumbent firms or innovation strategies that pay off. Four studies focus on different aspects of firm’s innovation strategies. First, we apply a multilevel approach. Second, we look at four perspectives on effective innovation strategies: timing, location, technology and path to obtain in-depth insights into the complexity of managing and executing a firm’s innovation strategy. In sum, this dissertation concludes that in order to reach innovation strategy effectiveness, firms can engage in exploration and exploitation through a simultaneous or sequential way, should consider to opt for spatial proximity of their exploratory and exploitative activities, need to invest in technological development, and adjust these choices based on what happens during the execution of an innovation project.