Title: Heads or tails in innovation strategy formulation? Porterian or Penrosian, let context determine

Authors: Andreas Larsson, Markus Bergfors

Addresses: Centre for Management of Innovation and Technology in Process Industry, Division of Industrial Organization, Lulea University of Technology, 971 87 Lulea, Sweden. ' Centre for Management of Innovation and Technology in Process Industry, Division of Industrial Organization, Lulea University of Technology, 971 87 Lulea, Sweden

Abstract: In strategy research, resources and products can be considered two sides of the same coin. This conceptual paper turns heads into tails as it revisits the Porterian industrial economics-based Booz Allen Hamilton methodology for innovation strategy formulation from a Penrosian resource-based view. Seven propositions are generated, two distinct methodologies emerge, and four contextual factors are discussed. This paper proposes that the Penrosian methodology is more suitable in turbulent environments while the Porterian is more suitable in less turbulent environments. Furthermore, it illustrates how the resource based concept can be incorporated into a potentially very practical tool for innovation strategy formulation.

Keywords: innovation strategy; process management; strategic planning; resource-based view; industrial organisation; strategy formulation process; management tool; Porterian; Penrosian; benchmarking.

DOI: 10.1504/IJPMB.2006.011330

International Journal of Process Management and Benchmarking, 2006 Vol.1 No.4, pp.297 - 313

Published online: 18 Nov 2006 *

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