Applying Ansoff'S Growth Strategy Matrix To Innovation Classification

See discussions, stats, and author profiles for this publication at: https://www.researchgate.
net/publication/321060813
APPLYING ANSOFF’S GROWTH STRATEGY MATRIX TO

INNOVATION CLASSIFICATION
Article in International Journal of Innovation Management · August 2018

DOI: 10.1142/S1363919618500391
CITATIONS READS
3 946
2 authors:
Tugba Gurcaylilar-Yenidogan Safak Aksoy

Akdeniz University Akdeniz University
57 PUBLICATIONS 136 CITATIONS 34 PUBLICATIONS 1,746 CITATIONS
SEE PROFILE SEE PROFILE
Some of the authors of this publication are also working on these related projects:
KNOWLEDGE ABSORPTIVE CAPACITY AND INNOVATION PERFORMANCE: DO SPATIAL COMPETENCES MATTER? View project
IT Outsourcing Issues in Turkey View project
All content following this page was uploaded by Tugba Gurcaylilar-Yenidogan on 04 August 2021.
The user has requested enhancement of the downloaded file.

International Journal of Innovation Management
Vol. 22, No. 4 (August 2018) 1850039 (30 pages)
© World Scientific Publishing Europe Ltd.
DOI: 10.1142/S1363919618500391
APPLYING ANSOFF’S GROWTH STRATEGY MATRIX TO

INNOVATION CLASSIFICATION
by AKDENIZ UNIVERSITY CENTRAL LIBRARY on 11/19/17. For personal use only.
TUGBA GURCAYLILAR-YENIDOGAN* and SAFAK AKSOY†

Faculty of Economics and Administrative Sciences,
Int. J. Innov. Mgt. Downloaded from www.worldscientific.com
Department of Business Administration,

Akdeniz University Dumlupinar Bouleuard TR-07058
Campus-Antalya, Turkey
*gurcaylilar@akdeniz.edu.tr
†
safak@akdeniz.edu.tr
Published 14 November 2017
This study aims to determine innovation capacity of a firm and to investigate the
correlations between performance outcomes and innovation types. In this study, a
questionnaire-based survey was conducted to classify firms with respect to different
novelty degrees of innovation activities in developing new products and the magnitude of
market impact shortly after innovations have been introduced and then appraise the as-
sociation between innovation types and performance outcomes. The data obtained from the
Turkish industrial clusters show that the higher firm innovativeness in product and market
with a wide-spread diffusion effect of innovations, the greater is the market and production
performance. To the best of our knowledge, this study is one of the few studies applying
the product-market growth matrix to determine/manage innovation portfolio of firms.
Keywords: Innovation strategy; corporate growth; market performance; production per-

formance; industrial clusters.
Introduction
The traditional rhetoric of efficiency-driven economy spreading throughout the
20th century has been shifting towards a knowledge-based and innovation-driven
competitiveness and economic development in the 21st century. A new paradigm
of economy is grounded in a long-run vision for the firm that seeks to create
sustainable value for its all stakeholders at the expense of short-run profit max-
imisation (Roos and Pike, 2008). Entrepreneurs occupy a central position in such
⁄
Corresponding author.
1850039-1
T. Gurcaylilar-Yenidogan & S. Aksoy
an economy that is primarily driven by ideas. Entrepreneurial orientation influ-

ences innovation process through generation and implementation (/commerciali-
sation) of new ideas and technologies. Technological knowledge is seen as the
innovation engine that drives changes in product design and engineering (i.e.,
product innovation) as well as production and delivery systems (i.e., process
innovation) (Courvisanos, 2006), which in turn determines the essential rules of
the competitive game and market dynamics. In a subsequent development stream
of technology and innovation, the coverage of innovation has been expanded from
technical innovations (product and process innovation) to include non-technical

innovations (i.e., marketing innovation and organisational innovation). Hence,
innovation began to be understood as “the development and market introduction of
a new or significantly improved product (good or service) or process, a new

marketing method, or a new organizational method in business practices,
workplace organization or external relations” (OECD, 2005).
The paradigm shift from the technology-driven innovation to user-driven in-
novation changed our understanding of innovation process through entre-
preneurship. In the new paradigm, entrepreneurs are more than an organised team
of professionals and specialists or technostructure (e.g., R&D departments) within
a large organisation (Courvisanos, 2006). Each employee who is able to play an
effective role in driving innovation at any time is recognised as an intrapreneur.
According to the reconceptualisation of innovation process, innovation does not
completely depend on technological breakthroughs with the automatic creation
effect of demand (technology push approach). Interactions between economic and
social actors create disequilibrium situations in terms of demand-pull forces that
determine how and why people adopt new ideas, practices and products and thus
the success of novelty creation (Andersen, 2013). From the perspective of mac-
roeconomic equilibrium (Schumpeter, 1934), entrepreneurs with the introduction
of a successful novelty disturb the normal flow of economic life due to the
diminishing positive effects of existing technologies and production system on
economic growth. It reveals the two facets of innovation that results in organi-
sational ambidexterity (Ohr and Mattes, 2013). On the one hand, incremental
improvement in innovation activities increases competitiveness within current
markets or industries. On the other hand, destructive effect of innovation creates a
dramatic change that transforms existing markets or industries. In this case,
technology progress from the product-side view (or innovative capacity of a firm
to reshape the value system) and market development from the market-side view
are viewed as the two dimensions of developing innovation types. In other words,
novelty (/newness) of innovation depends on innovativeness of a firm on the
whole value chain activities and its impact on the target market. Incremental
innovation and radical innovation compose the two ends of novelty spectrum.
1850039-2
Applying Ansoff’s Growth Strategy Matrix
Nowadays, innovation is considered as less about incremental innovation and

more about radical innovation. It is evident that the efforts of developing new
businesses have been triggering the industrial revolution by creating new indus-
tries (e.g., Google, Amazon.com, Facebook, Twitter) rather than improving the
existing ones. It is seen that technological progress in a system of material inputs,
technical and functional product designs, production techniques and procedures,
logistics operations procedures, marketing methods, work activities, organisational
structure, information processing and so forth, should not be a standalone measure
in determining innovation (Garcia and Calantone, 2002). This approach to inno-

vation can only be effective in terms of the newness relative to the firm. Newness
of innovation refers to the degree of familiarity with the new product across every
market segment of the global economy (Song and Montoya-Weiss, 1998). Radical
innovations are discontinuous to every customer segment, as they comprise new to
the world products. Hence, innovation can be described along several dimensions
including the impact of innovation on the economic activities of firms in the target
market and its market coverage (e.g., new to the firm/new to the market/new to the
industry/. . . :/new to the world) as well as the magnitude of changes in new
product development activities.
Today’s theoretical and practical knowledge endowment shows that innovation
is an iterative process of change that evolves from discovering some new ideas
covering the whole spectrum of activities to diffusion of new and economically
useful knowledge among individuals, social networks and organisations. Diffusion
of innovation creates a turning effect produced by spreading a new idea or product
through a social system (Rogers, 2003; Tidd and Bessant, 2009). The diffusion
speed of innovation is considered in introducing product life cycle as the decisive
tool for lifespan extension of a specific product from design to obsolescence.
Although strategic choice influences the profitability of a product at each stage,
innovations come in different degrees due to the diffusion speed or market
potential. In connection with this, a relationship exists between the technological
maturity or product life cycle stages and different types of innovation: radical
(introduction), incremental (growth), (product- and market-based) breakthrough
initiatives of innovation (transformation). In this study, we use a modified version
of the Ansoff growth matrix for innovation strategy. This framework of innovation
evaluates a fit between product-market strategies and different types of innovation
strategy Kalbach (2012) defines as incremental, breakthrough (/product-based
breakthrough), disruptive (/market-based breakthrough) and game-changer (/rad-
ical). Such a categorisation enables us to have a better understanding of firms’
strategic innovation decisions on new product development.
Performance outcomes are correlated with the strategic innovation decisions on
new product development process. According to the historical performance record,
1850039-3
firms can allocate resources across innovation types in the most efficient way.
Based on the innovation-based growth model, this study aims to classify firms
from the macroeconomic perspective of equilibrium and then investigate the
correlations between performance outcomes and innovation types. By doing so, it
would be possible to determine which innovation types varying in innovative
capacity for corporate growth lead to a substantial increase in firm performance.
Although different types of innovation have been extensively studied in recent
years, their correlation with performance outcomes (limited to measure market
performance and production performance in this study) is still underexplored. As

an exception to the literature, Oh et al. (2015) examined the heterogeneous effects
of different types of innovation strategies on firms’ market performance. However,
they could not provide an innovation framework to determine novelty (/newness)

of innovations a firm has performed on value chain activities and its impact on the
target market in a given period. To measure innovation strategies, they used terms
to describe membership in a specific category of innovation strategy with 0/1
coding. Using this approach, it is not possible to discover the connection between
corporate growth and firm innovativeness in new product development process.
The present study here contributes to filling this gap by presenting a theoretically
and empirically grounded typology of innovation-based growth models. Further-
more, it discusses heterogeneous effects of different types of innovation strategies
on firms’ market effectiveness and production efficiency as the two complementary
performance areas.
The rest of the paper is organised as follows. We first provide a brief review of the
innovation models. Then we introduce innovation typologies in a variety of multi-
dimensional forms such as dichotomous, triadic and tetra-categorisation. We
clarifies the relationship between growth strategy and innovation. We then iden-
tifies the methodological approach of this study to classify firms operating within
industrial clusters according to the innovation capacity and to explore the corre-
lations between performance outcomes and innovation types. We combines the
results from two-step cluster analysis and variance test to describe innovation
clusters and compare differences between the cluster means based on performance
outputs. Finally, we conclude with the theoretical and practical implications for
innovation stratgy and performance.
Evolution of Innovation Models

Innovation models are usually divided into two categories as linear models and
interactive models (Kotsemir and Meissner, 2013; Gust-Bardon, 2014). Before the
1980s, innovation was described as a linear sequence of process stages from coming
1850039-4
up with new ideas for inventions through technical development to commerciali-

sation. The first generation of linear models is called the technology-push model. It
simply means “science leads to technology and technology satisfies market needs”
(Gibbons et al., 1994, p. 51). The latter is the market-pull model, in which customer
needs are the initiating point in innovation. According to the linear approach, the
more inputs (e.g., research and development expenditures) a company gets, the
more outputs (e.g., patents and new products) it can produce. The linear approach to
innovation is most commonly criticised for assuming of an endogenous process
from the knowledge flow generated by internal activities within the firm. From this
perspective, the innovation concept is a “black box” because the lack of feedback
loops from the market needs and from the product development process in R&D
system hinders the performance assessment of a new product.

After the 1980s, the development of evolutionary theories pioneered by Nelson
and Winter (1982) has enriched the theoretical framework for understanding the
context of innovation. From the iterative process perspective, it has been put
forward the argument that innovation is a non-linear cycle of divergent and con-
vergent activities at different organisational levels of resource flows, whereas
co-evolution of institution, organisation and technology in a common system
shapes the economy over time (Castellaci et al., 2005). In line with the coupling
process of incorporating technology-push and market-pull innovation aspects
(Rothwell and Zegveld, 1985), Kline and Rosenberg (1986) developed the chain-
linked model in which innovation is considered as a process of interactive learning
connecting the five stages (i.e., identification of the customer needs in a potential
market, invention of analytic design as a new product or process, the detailed
design and test, redesign and production, distribution and marketing) through
feedback loops. Afterwards, systems approach caused the emerging research
agenda of innovation in the recent years. Innovation system comprises the eco-
nomic, social, political and organisational actors who have considerable influential
power on the development, diffusion and the use of innovations. The systemic
model (Lundvall, 1988) enhanced the awareness on knowledge accumulation from
external sources, not only emanating from individual and corporate entrepreneurs
at the firm level. The triple helix model (Leydesdorff and Etzkowitz, 1996) con-
tributes to the systems approach by stressing the importance of dynamic interac-
tions among industry, government and academia (or universities as science
centres) in enhancing national competitiveness and local/regional development
(Gust-Bardon, 2014). Interacting actors of the triple helix triangulation network
were assigned collective roles of entrepreneurship in innovation. As another in-
teractive model, open innovation (Chesbrough, 2003) promotes the use of both
inflows and outflows of knowledge in order to exploit the patents issued to ex-
ternal innovations and to market internal innovations incompatible with the
1850039-5
organisational business that results in improving internal innovations and devel-

oping new markets.
A brief history of innovation models, we have presented earlier, provides a
substantial evidential basis for the innovation focus increasingly extending beyond
an intra-firm affair. Learning process by interactions allows firms to acquire ex-
ternal information and knowledge on technological advances and apply it for
achieving organisational goals after the combination of existing knowledge with
the newly acquired and assimilated knowledge, which in turn leads to a high level
of absorptive capacity (Cohen and Levinthal, 1990; Zahra and George, 2002). In
the new economy, strategy processes and performance outcomes of the firms are
affected by a complex set of systemic factors (politic, technological, ecological,
economic and social factors) at the local, regional, national and international
levels. The interdependence of systems makes innovation and entrepreneurship
catalyzers of collective competitiveness through networked management and
sustainability. In this study, innovation is dealt as an interactive process limited to
the user–producer interaction.
Innovation Typologies: “Internal” and “External” Perspectives

on the Classification of Innovation
Previous research has classified innovation in different categories basically varying
between the two extreme ends of a novelty continuum: from incremental (or
continuous) to radical (or discontinuous). A radical innovation is one that drasti-
cally changes the consumer’s attitudes with fundamental differentiation in the
existing products and hence reshapes the rules for competitive game between firms
in a market. On the contrary, incremental innovation concerns an existing product
or service, performance of which has been significantly enhanced through minor
changes in value chain activities but in turn it does not indicate a significant shift in
buying behaviour. Consistent with these definitions, it can be argued that each
innovation type stands somewhere in an extent of what the novelty (or newness) of
innovation is. Accordingly, developing a typology of innovation needs to be
operationalised the measures for innovativeness from an internal “firm” and/or
external “customer” perspective.
The review on the relevant literature revealed that there are many kinds of
innovation classified in a variety of multidimensional forms such as dichotomous,
triadic, tetra-categorisation and so forth (see Appendix A). From the firm per-
spective, the degree of novelty depends on the perceptual assessment by the
organisational members. Song and Montoya-Weiss (1998) and Veryzer (1998)
categorised innovations into two clusters according to the differences in new
1850039-6
product development process. Other studies, based on the firm perspective, con-
sidered the newness of the product and the newness of the target market as
measurement indicators to the novelty of innovation. The dimensions of product
newness were included as (a) product changes in terms of functional design and
engineering, features and overall benefits (i.e., the product technology is new to
the organisation) and (b) changes in the production and delivery systems (i.e., the
process technology is new to the organisation), whereas market newness was
supposed to become one-dimensional that covers changes in the market applica-
tions for which the new product is targeted (i.e., the target market is new to the
organisation) (Ziamou, 1999). Among those studies, Balachandra and Friar
(1997), Christensen (1997) and Crawford (1997) reflected a more product-based
view of innovation and discussed two/three levels of innovations that differ in

product technology. Similarly, Rice et al. (1998) categorised innovation types as
incremental and breakthrough that have different levels of improvement in per-
formance features of a new product relative to existing products. The approach of
Robertson (1971) was market-oriented, in which the novelty of innovation is
evaluated by the influence of a new product on existing consumption patterns. The
scheme of Kleinschmidt and Cooper (1991) for categorising innovation comprised
both product-based and market-based perspectives.
From the external perspective of innovation, the extent of what the novelty of
innovation is comes out at the aspects of customer perception. It is of critical
importance what a product is viewed as. A really new product necessitates a higher
alignment between technological breakthroughs and unknown customer needs and
creates superior customer benefits. Based on the customer perspective, Leonard-
Barton (1995) categorised innovations in five groups (user-driven enhancement,
developer-driven development, user-context development, new application or
combination of technologies, technology/market coevolution) with a three-di-
mensional structure of novelty that encompasses innovativeness for product
technology, target markets and customer needs. This classification approach is
similar within the tetra-categorisation (regular, architectural, niche creation, rev-
olutionary) of Abernathy and Clark (1985). Norman and Vergani (2004) identified
four types of innovation (market-pull innovation, technology-push innovation,
meaning-driven innovation and technology epiphanies) according to the magni-
tude of technological change and meaning change on how people interact with a
product. Rogers (2003) and Chandy and Tellis (2000) conceptualised the S-curve
sequences of the technological evolution that drive various new product intro-
ductions. In this context, radical innovation involves a new product embodying in
technological innovations that provide superior customer benefits relative to the
previous product generation during the maturity levels of technology. According
to Ziamou (1999), the newness of the consumer input functions as a component in
1850039-7
determining the technological novelty of a product. From this perspective, a really

new product launch entails introducing with a new functionality that is difficult to
imagine. Gobeli and Brown (1987) identified four types of innovation (i.e.,
incremental, technical, application and radical) with the combinations of changes
in the two parameters including product technology and consumer behaviour.
Consistent with the user–producer interaction approach to innovation, this study
uses Kalbach’s model (2012) based on four zones of innovation: incremental (low
tech progress, low market impact), breakthrough (high tech progress, low market
impact), disruptive (low tech progress, high market impact) and game-changer (high
tech progress, high market impact). He suggests a 5:2:2:1 ratio for organisations’
innovation investments across these four types. The first dimension of innovation
grid indicates the extent of technological progress representing the improvements in

existing capabilities, services and products. The second dimension demonstrates the
market impact of innovations. Incremental innovation does not create new markets,
but rather only evolves existing application context with better value (Čiutienė and
Thattakath, 2014). Although a new product with incremental improvements may
provide additional or enhanced functions, its basic technologies to support value-
creating activities are the same with the existing ones (e.g., product change from
iPhone 5 to iPhone 6) (Schuh and Guo, 2015, p. 52). Breakthrough innovation is
characterised by a significant technological progress and a relatively low market
impact. The R&D labs are often responsible for initiating and developing break-
through innovation projects. Breakthrough innovation promises advanced perfor-
mance improvement compared with existing products (e.g., product change from
CRT TVs to LCDs). To contrast, disruptive innovation exercises high market
impact at low technological progress (e.g., iTunes software to commercialise the
mp3 players, budget airlines). This type of innovation addresses underserved market
needs with a different value proposition of products (e.g., products improved for
providing ease of use or accessibility for people with low budget). Compared with
the established technology, disruptive technologies render inferior performance at
least in the beginning. Finally, game-changer innovation creates a radical impact on
perceived value of product technology (e.g., first launch of smartphones, internet-
based selling approach of Amazon). Due to the high price margin, game-changer
innovation might not disrupt an existing market.
Growth Strategy and Innovation: Is There Any Dialogue?

Innovation is an essential condition of organisational struggle for business con-
tinuity through gaining sustainable competitive advantage over competitors.
However, business success is not always correlated with the virtue of being the
1850039-8
first to bring a specific product or service to market. Despite the high R&D
expenses incurred by first movers, the competitive position of non-innovators
would obviously be disrupted in the near future (Basu, 2014). To overcome this
problem, it is critical importance of understanding the product-market framework
within which each innovation type finds an appropriate space. Ansoff’s (1970)
product-market matrix is a conceptual framework for strategy development that
enables a firm to move in two major directions in seeking future growth: expansion
of its current businesses and activities or diversification into new businesses (Boyd
et al., 1995). The first alternative direction for strategy development is to expand
current business through market penetration strategies (e.g., increase in market

share and increase in frequency of product usage), product development strategies
(e.g., product line extensions and new product offerings for existing customers)
and market development strategies (e.g., geographic expansion and targeting new
segments). In contrast, the second alternative for corporate growth is to allow the
firm to expand its activities by operating in new lines of business that are different
from current operations. Firms in this second strategic direction seek growth by
diversifying their operations and hence new opportunities in dealing with unfa-
miliar customer groups. Ansoff Matrix also allows for classifying firms according
to different degrees of novelty associated with the innovation (Fig. 1).
Based on the Kalbach’s model of innovation (2012) used in this study, a fit can
be deduced between innovation type and growth strategies consistent with the
product-market characteristics (Table 1). Market penetration strategies with the
modest changes in existing products result in incremental innovation. Minor
improvements and small changes such as color and size are applied to the form and
Fig. 1. “Ansoff Matrix” modified for innovation typology (/strategy) (Kalbach, 2012).
1850039-9
Table 1. Growth strategies and innovation type — towards a unifying framework.
Product-market characteristics Growth strategies Innovation type

Existing product * existing market Market penetration Incremental
New product * existing market Product development Breakthrough
Existing product * new market Market development Disruptive
New product * new market Diversification Game changer
function of the existing product. The main strategy here is to increase market share
of the existing product. Growth strategies to the pursuit of developing new markets
with the radical changes to existing products produce really new products by
changing the way of how people act and communicate with the product features.
Although operating in new lines of business transforms market and even society,
this kind of (revolutionary) innovation is called as “game changer”. Such as radical
shifts in business offerings with new functions cause technological transformation
of products and markets. Other combinations (existing markets with new products
and new markets with existing products) produce moderately new products that
can share some common characteristics of both core (incremental innovation) and
transformational (radical/game-changing innovation) innovations. Breakthrough
innovation is a consequence of significant improvements in product function and
therefore requires high investments in research and development. On the other
side, disruptive innovation with minor change in technological function generates
new revenue streams by either providing solutions to a new set of customer needs
or significant improvements in product performance.
Methodology
This research study classifies firms operating within industrial clusters according
to the capacity to innovate in the expanded coverage of innovations from product
and process (technological innovation) to include marketing and organisational
innovation (non-technological innovation) and its impact on the target market.
Hence, the authors aim at identifying different types of innovation strategy and
then investigating the correlations between performance outcomes and innovation
types (Fig. 2). In order to do so, this study uses a 2 2 matrix encompassing four
basic types of innovation. Dimensions are determined by firm innovativeness and
market impact consistent with the Oslo Manual (OECD, 2005), which offers an
integrative framework for understanding the innovation ecosystem as a whole.
Although the impact of innovations can exert considerable influence over the
market structure through competition for market shares, broaden the target market
1850039-10
Fig. 2. Conceptual model.
or render existing products and services obsolete, its disruptive influence increases
with the geographical coverage of the diffusion from a particular customer market
to quickly spread around the world. An innovation would not create any economic
impact without its diffusion from the first implementation to different firms,
markets, industries, regions and countries. Consistent with the diffusion theory of
innovation, the novelty of innovation depends on the scope-related impact of
innovations beyond the changes on products that involve a significant degree
of novelty for the firm. In the modified version of Ansoff Matrix, we consider firm
innovativeness (:positioning axis product) as a measure of the degree of newness
of innovations in the new product development process when its impact on the
target market (:positioning axis market) represents the effect size of innovations
created in the demand market. As firm innovativeness increases at the higher levels
of market effect, game changer strategy of innovation tends to be implemented.
Sample and data collection

In this study, we used a questionnaire-based survey (see Appendix B for the
questionnaire form) to classify firms with respect to different novelty degrees of
innovation activities in developing new products and the magnitude of market
impact shortly after innovations have been introduced and then appraise the as-
sociation between innovation types and performance outcomes. The research
population of the study comprised a total of 269 firms operating in the organised
industrial district of Antalya/Turkey. After the telephone-based contact with the
managers/executives of the cluster firms to give them information about the re-
search intention, 183 firms accepted to participate in the research. Then a survey
1850039-11
was conducted through personal interviews, which in turn resulted in an effective

response rate of 47%. The data obtained from a particular industrial cluster in
Turkey were analysed with the SPSS (version 20) package program, and the two-
step cluster analysis procedure (as an exploratory tool) was applied to reveal
clusters for innovation capacity of the firms within the data. In addition, we used
analysis of variance (ANOVA) test to analyse whether there are some significant
differences among innovation clusters according to the performance outcomes.
Measurement
The clustering criteria of this study cover two input sets (firm innovativeness and
market impact) to divide innovation into four specific segments and hence depict
the distribution of the firms located in the organised industrial district of Antalya in
terms of capacity for innovation. Following the Oslo Manual (OECD, 2005)
framework, firm innovativeness in new product development process was mea-
sured with 16 items to capture the extent of which positive changes (/innovations)
a firm has been making on new product development activities over the last three
years. According to the measurement of this construct, executives were asked to
rate firm innovativeness on the value chain activities (i.e., technical product spe-
cifications and functional characteristics, ergonomic product design features,
components and materials, production techniques and procedures, inward and
outward logistics methods and procedures, supporting activities such as purchas-
ing, accounting, computing and maintenance, product aesthetic design, product
packaging, product placement, product promotion and pricing, business practices,
information processing systems, workplace organisation and managing external
relationships) consisting of production, marketing and the infrastructure of the firm
such as organisational structure and control systems using a 5-point scale ranging
from (1) no change, (2) minor improvements, (3) minor but continuous
improvements, (4) major/remarkable improvements and (5) radical/transforma-
tional improvements. Cronbach’s alpha for the firm innovativeness in new product
development process ( ¼ 0:90) is well above the recommended threshold level
of 0.70.
As the second dimension of the matrix for innovation typology, market impact
of innovations concerns the degree to which innovations have a significant impact
on a particular market that indicates magnitude of change in the economic activity
of firms in the market after the introduction of new or substantially improved
products. This indicator was assessed using a four-point scale for the market
impact of innovations a firm has been making on new product development
activities over the last three years ranging from: (1) no impact on the market or
economic activities of the firms operating in the related market, (2) changing the
1850039-12
structure of the market (shifts in the distribution of market shares), (3) extending
the boundaries of the market and (4) creating new customer needs and markets
(rendering existing products obsolete). Following the methodological approach of
Garcia and Calantone (2002, p. 118), the distinction between micro- and macro-
perspectives of innovation is of great importance in determining product inno-
vativeness correlated with capacity of a firm since it identifies newness of
innovation to whom. From a macro-perspective, innovativeness should be con-
sidered with the sources for technological advances that are exogenous to the firm.
Accordingly, newness of innovation refers to the degree of product familiarity to

the outside forces (such as new to the world, new to the industry, new to the
market and new to the customer). By considering that a world scale transformative
influence of innovation (or a new product/service) just makes a firm highly and
radically innovative, we integrated market coverage of innovations as the evalu-

ation field when following the two-step cluster analysis procedure for classification
of the firms. Hence, the variable of market coverage was not used to create the
cluster model, but provided us further insight into the data interpretation on the
relationship between firm innovativeness and market effect. In order to measure
market coverage of innovations, the executives of the cluster firms were asked to
indicate for whom innovations made by the firms over the past three years are new
on a scale of (1) new to the firm, (2) new to the local/regional (i.e., Antalya/
Mediterranean region) market, (3) new to the national market, (4) new to the
international market and (5) new to the world market. In addition to this, some
input and output indicators of innovation (e.g., number of new products, R&D
intensity, sales income of new production) were included as the other evaluation
criteria.
Performance outcomes have been listed in the Oslo Manual into the three main
categories of incentives that promote innovation. They are relevant for competi-
tion, demand and markets, production and delivery and workplace organisation. In
this study, we investigated the first two categories of performance to disclose
possible differences among innovation clusters of the firms operating in the same
industrial district. The items for the first performance outcomes category of
competition, demand and markets are aimed at determining the importance of the
motives for product innovations. The impact of the changes in competition, de-
mand and markets can, for example, reduce the product-development cycle, extend
the life cycle of products and accelerate product revenue and market share growth
or avoid a decline in market share. According to the measurement of market
performance (as to relabeling in this study), respondents identified the average
relative performance of the firm compared with its main competitors over the past
three years by assessing the items for competition, demand and markets consisting
of lead time for new product introduction, product/service range, increase in
1850039-13
market share, opening up new markets, product/service quality, building product

awareness on a 7-point Likert scale ranging from much lower than competitors
(¼1) and equal to competitors (¼4) to much higher than competitors (¼7). The
latter category of performance outcomes for production and delivery captures
improvements in quality, flexibility and efficiency. We measured the construct of
production performance with four items comprising production costs, volume
flexibility of production, speed in supplying and delivering products and quality of
conformance to industry technical standards. Whenever Cronbach’s alpha for
market performance is 0.84, its value for production performance is 0.62 which is
compatible with the recommended threshold level of 0.60 (Hair et al., 1998). In
addition to the reliability test for the two main categories of the performance
outcomes for innovation, exploratory factor analysis with varimax rotation was
conducted to check the validity of the constructs. The Kaiser–Meyer–Olkin
(KMO) measure of sampling adequacy is 0.86 and the Bartlett test of sphericity is
highly significant (Bartlett’s test: 421.741; p ¼ 0:000), indicating that the data are
suitable for factor analysis. The exploratory factor analysis yielded a two-factor
solution accounting for 55.63% of the cumulative variance. Factor loadings of the
10 items are above 0.50 (Hair et al., 1998).
Results
The results of this study can be reported into two sub-sections. At the first stage,
we conducted a two-step cluster analysis to produce the clusters of greatest pos-
sible distinction and hence obtained a four-cluster solution based on the two input
features (magnitude of changes in innovation activities as the measure for firm
innovativeness and the impact of innovations on the target market). At the second
stage, we identified the performance differences among innovation clusters by
applying ANOVA.
Interpreting the results of two-step cluster analysis

By applying the two-step cluster analysis, we reached a satisfactory cluster quality
value for a silhouette measure of more than 0.50 (Fig. 3). It indicates that the four-
cluster solution produced a good fit of data to the overall model. Figure 4 shows
the relative importance of the two input variables (magnitude of changes in in-
novation activities and the market impact of innovations). Comparing the results, it
is seen that the impact of innovations in the target market is the most important
variable for each of the clusters.
1850039-14
Silhouette measure of cohesion and separation
Fig. 3. Model summary and cluster quality.
After presenting the cluster size distribution in the two-dimensional space

(Fig. 5), the mean values for all variables for each cluster were reported in Fig. 6.
According to the cluster means, Cluster (3) with 15.2% of the cases presented
the lowest scores of innovativeness on the pivot variables for product and market
Fig. 4. Predictor importance of each variable used in the analysis.
1850039-15
Fig. 5. Cluster distribution.
(Fig. 6). The firms in Cluster (3) exhibited very low innovative capacity for
developing new products with incremental advances in existing products. The
capacity of those firms to innovate is limited to the structural changes in the
target market, which are linked at the local and regional levels. Inconsistent with
Cluster (3), we can state that the firms in Cluster (2) (with 14.4% of the cases) have
made remarkable changes (improvements) to new product development over the
last three years and hence creating breakthrough products with new customer
needs gave rise to reach growing target markets nationally. The firms within
Cluster 2 can be defined as game changer innovators of the industrial district.
Despite the restricted scope of the target market to the national scale, they have
more growth potential in radical and discontinuous leaps to completely novel
offerings and opening up new markets.
The other firms within Cluster (1) and Cluster (4) are the evolutionary inno-
vators of the industrial district (Fig. 7). The orientation of evolutionary innovators
is towards making continuous or incremental innovations for today’s customers
by identifying product and market growth trajectories. The results show that
Cluster (1) represented the vast majority (with 48.8%) of the cases. Such firms are
the disruptive innovators that create a new market by making some minor
improvements to an existing product and thereby converting non-customers into
1850039-16
Fig. 6. Cluster view.
customers. According to the findings, those firms produced an effect to expand the
activity coverage of the industrial district to national markets. Cluster (4) with 27
firms (21.6% of the cases) emerged somewhere at the interface of incremental and
breakthrough innovation. Breakthrough innovators of the industrial district laun-
ched new products for the existing product lines and hence reshaped the local/
regional market which included greater demands for improved products.
The results from a set of evaluation criteria on output/input indicators of in-
novation demonstrated that incremental innovation has the lowest R&D intensity
1850039-17
Fig. 7. Innovation clusters.
(as a ratio of R&D expenditures/total sales) among the other innovation strategies.
On the other side, firms who follow game changer innovation strategy allocate the
largest funds to R&D. Consistent with the output indicator of innovation, the
proportion of new product sales revenue is lower for incremental innovation.
Interestingly, sales income of new products is the highest (with a percentage of
26.11) in the type of breakthrough innovation. However, firms invest more in
research and development when they can produce a small number of new products
by following this strategy. Therefore, game changers can be evaluated more
advantageous according to the share of new product sales revenue (that corre-
sponds to 24.08%).
Interpreting the results of ANOVA

The result of ANOVA test (Table 2) shows that there were some differences
among the means of the four clusters according to both market performance
(F ¼ 24:970, p ¼ 0:000) and production performance (F ¼ 15:273, p ¼ 0:005).
After determining that the differences exist among the means with a significant
ANOVA, post hoc range tests were performed to determine which means differ.
For the dependent variable of market performance, pairwise multiple comparisons
between Cluster 1 (disruptive innovation) Cluster 4 (breakthrough innovation)
(mean difference ¼ þ0:850), and Cluster 3 (incremental innovation) Cluster 4
(breakthrough innovation) (mean difference ¼ þ0:927) provide evidence for the
significant differences in means at the 0.05 level. In contrast, Cluster 2 (game
changer innovation) with the highest values of firm innovativeness and its market
impact displayed substantial differences among groups in mean scores for both
1850039-18
Table 2. One-way ANOVA: Performance differences between innovation

clusters.
Mean square F Sig.

Market performance Between groups 26,613 24,970 0.000
Within groups 1,066
Total
Production performance Between groups 14,867 15,273 0.000
Within groups 973
Total
market performance (the mean difference between Game changer_Disruptive:

þ0.588; _Incremental: þ0.512; _Breakthrough: þ1.439 at the 0.05 level of sig-

nificance) and production performance (the mean difference between Game
changer_Disruptive: þ0.916; _Incremental: þ0.736; _Breakthrough: þ0.639 at
the 0.05 level of significance). According to the results of post hoc tests, game
changer firms of the industrial district (falling into Cluster 2) have generated new
customer needs with remarkable improvements on existing products at the national
market level and hence achieved superior market performance in maximum con-
trast with breakthrough innovators of Cluster 4. In addition to the superiority in
market performance, game changer firms of the industrial district have been dis-
tinguished in terms of relatively higher performance outcomes for production
efficiency.
Conclusion
The major assumption underlying this research study is that performance outcomes
of cluster members may differ according to firm capacity for innovation, even if
firms in an industrial district can exploit some locally embedded systemic
resources. To investigate the correlations between performance outcomes and
innovation types, we apply the well-known growth matrix of Igor Ansoff in its
modified version for innovation strategy. First, this study is briefly elaborated on
how the understanding of the innovation process has evolved over time. Evolu-
tionary change of innovation models triggered by paradigm shifts for survival in
the knowledge economy has disclosed that organisational success and longevity
can be accomplished from the macroeconomic perspective of innovation in which
actors are enacted in an iterative process of action, reaction and counteraction
through networks of social relations. Despite the limited focus of the current study
on pluralistic utilitarianism nurturing innovation and value creation in entrepre-
neurial firms, we consider technology-push and market-pull impulses to be
1850039-19
interlinked in determining firm innovativeness. Consistent with the new insight in

collecting and interpreting innovation data (OECD, 2005), this study uses the hard
(physical) drives of technology in traditional sense together with its human-
mediated soft processes to identify product innovation activities. Therefore, a firm
technology means that incremental/radical improvements on products (services)
are pushed through the business functions of R&D, production, marketing and
management infrastructure. On the other side, market-pull impulses of innovation
can be determined by product innovation activities in response to an identified
market need. According to us, exploring opportunities from “doing what has never
been done before” needs to advance in innovation practices that create a trans-
formative influence on global market demand.
Based on the data obtained from the industrial district of Antalya, the firms with
the highest firm innovativeness and market impact are the cluster members of
which innovation capacities are limited to create revolutionary transformation on
the national market. This cluster group is called “game changer” of the industrial
district in this study. Remarkable improvements in the new product development
process enable them to create/add new consumers around the Turkish market.
They have relatively higher market and production performance rather than the
other three firm clusters labelled as incremental, breakthrough and disruptive.
Game changer creates a very similar market impact with the disruptive type of
innovation in expanding the national coverage to markets. In the disruptive in-
novation type, firms make some minor improvements to an existing product and
hence follow growth strategy through market expansion. It becomes the most
dominant form of innovation in the industrial district of Antalya. Breakthrough
innovators are the second biggest cluster, but their market performance is at the
lowest level. In addition to this, they need to make more research and development
investments for developing a small number of new products. This situation also
creates a diminishing effect on production performance. However, firms can fol-
low the strategy of breakthrough innovation due to the high sales revenue in this
category. Similar to the breakthrough innovation, the market impact of incremental
innovations covers local market. However, breakthrough innovation with major
improvement of existing products or development of new product lines leads to a
more pronounced effect in changing structural market dynamics. The most notable
feature of incremental innovators has relatively low levels of R&D intensity.
Despite this handicap in terms of input indicators of innovation, minor improve-
ments of incremental innovators in product development process result in more
new products than disruptive and breakthrough innovators. Depending on the
advantages of short lead times for new product introduction, incremental inno-
vators can perform better than breakthrough innovators. In conclusion, the firms
1850039-20
who intend to increase the firm performance must develop their capabilities that
support activities in the cluster of game changer.
This study indicates that innovation-dependent differences in performance
outcomes can be discovered through couplings between the novelty degree of
innovations in activities such as technical and functional product designs, pro-
duction techniques and procedures, logistics operations procedures, marketing
methods, work routines and procedures, organisational structure, information
processing in the new product development process and the magnitude/coverage
of the impact on the target market the product innovativeness of a firm has been
originated. The higher firm innovativeness in product and market with the diffu-
sion effect of innovations to the worldwide markets, the greater is the market and
costs performance. In turn, this effect leads to enhanced firm performance through
growth-based innovation strategy by diversifying firm operations and hence

gaining new opportunities in dealing with unfamiliar customer groups. Overall,
this study demonstrates that firm innovativeness provides a useful tool in ex-
plaining the development of a business growth strategy. To our knowledge, this is
one of the few studies applying the product-market growth matrix to determine/
manage innovation portfolio of firms. Therefore, we hope that it will contribute to
greater understanding of innovation-based growth strategies.
This study has some limitations that offer new opportunities for future research.
Especially, it is open to the research questions on what the drivers of innovation
strategies are and how they affect firm performance. By investigating the firm-,
cluster- and network-specific resources of innovation, future studies may provide
deeper insights on strategic innovation management. Other limitations come from
the dataset of this study. The data of this study were obtained from a single
industrial cluster in Antalya/Turkey. Although firms from eight different business
fields are operating in the relevant industrial cluster, the number of firm members
per business area has not been enough to unveil the industrial differences on
strategy choice and performance outcomes. Further exploration with sufficient size
of data will help to interpret how the relationship between firm decision on in-
novation strategy and performance outcomes varies across industries and coun-
tries. Furthermore, future research has to answer the question as to the extent that
the stage of the product life cycle influences the relationship between strategic
innovation decision and performance. A longitudinal design will be beneficial to
analyse change over time.
Acknowledgement
This paper was prepared from the Project TR61/15/DFD/0010 supported by West
Mediterranean Development Agency.
1850039-21
Appendix A. Innovation Typologies
Table A.1.
Categorization Novelty of innovation Indicators of innovativeness

Dichotomous categorization
Balachandra and Incremental Changes in basic technology and

Friar (1997) existing technology with minor product configuration
modifications in the performance,

flexibility, appearance and other
characteristics
Radical
considerable differences in technology
compared to the existing product
Christensen (1997) Sustaining The degree of product functionality
existing product functionality for
existing markets
Disruptive
a new set of functions for different
market segments
Veryzer (1998) Continuous The differences in new product
generic product development process development process (that
with minor modification covers the phases of dynamic
Discontinuous drifting, convergence,
formulation of a new product formulation, preliminary
application from emerging technologies design, evaluation preparation,
formative prototype, testing and
design modification, prototype
and commercialization) for
developing discontinuous new
products, including extremely
high degree of technological
and market uncertainty
Rice et al. (1998) Incremental Improvements in performance
Breakthrough compared to existing products
“game changer” products with the
potential for a 5–10 times improvement
in performance and a 30–50%
reduction in cost compared to existing
products, and the new-to-the-world
performance features
1850039-22
Table A.1. (Continued )

Dichotomous categorization
Song and Montoya- Incremental The degree of excellence attained

Weiss (1998) new product development stages from to the implementation of
the most important to the least product development activities/
important: technical development, stages including strategic
strategic planning commercialization, planning, idea development and
idea development and screening, screening, business and market

business and market opportunity opportunity analysis, technical
analysis, product testing development, product testing
Really new and product commercialization
new product development stages from (the relative proficiency levels

the most important to the least in new product development
important: technical development, activities)
business and market opportunity
analysis, commercialization, idea
development and screening, strategic
planning, product testing
Triadic categorization
Robertson (1971) Continuous The influence of a new product on

an entrenching influence existing consumption patterns
Dynamically continuous
a disruptive influence
Discontinuous
a transformative influence
(the establishment of new consumption
patterns and the creation of previously
unknown products)
Crawford (1997) Imitation The degree of technological change
emulation of the existing products in the and the extent to which the
market innovation is based on an
Adaptation existing product
improvements in existing products
Pioneering
new-to-the world products
Kleinschmidt and Low The newness of product technology
Cooper (1991) low novelty products with and market
modifications, revisions, and
improvements in existing products
1850039-23

Triadic categorization
Moderate
moderate novelty products that are not
already new to both businesses and
consumers and achieved by the highest
levels of aesthetic preference
High
high novelty products/new products for
both businesses and customers
Tetra-categorization
Abernathy and Regular The magnitude of change in

Clark (1985) existing competence-existing customer technological competences and
linkage production systems (conserving
Architectural the existing technical and
new competence-existing customer production competence/
linkage disrupting and rendering
Niche creation obsolete the existing technical
existing competence-new customer and production competence)
linkage and linkages to markets and
Revolutionary users (/consumers) (conserving
new competence-new customer linkage the existing linkages/disrupting
the existing linkages to create
new ones)
Gobeli and Brown Incremental The degree of newness of product
(1987) existing technology-no change in innovation (in terms of product
consumer usage behaviour technology) from perception of
Technical both consumers and producers
new technology-no change in consumer in the industry
usage behaviour
Application
existing technology-change in consumer
usage behaviour
Radical
new technology-change in consumer
usage behaviour
1850039-24

Tetra-categorization
Ziamou (1999) Incremental The degree of technological

pre-existing functionality-imagery functionality and the newness
Functionality-driven of user’s input required to
new functionality-imagery obtain an expected (existing or
Technology-driven new) functionality
pre-existing functionality/no imagery

Really new
new functionality-no imagery
Chandy and Tellis Incremental The degree of technological

(2000) existing technology novelty of a new product and its
Market breakthrough superiority in costumer benefits
existing technology relative to the previous product
Technological breakthrough generation
new technology (S-curves of the technological
Radical evolution: increasing consumer
new technology benefits during the maturity
levels of technology)
Kalbach (2012) Incremental The extent of technological
low technology progress-low market progress representing the
impact improvements in existing
Breakthrough capabilities, services and
high technology progress-low market products and the size of market
impact impact of innovations
Disruptive
low technology progress-high market
impact
Game-changer
high technology progress-high market
impact
Norman and Market-pull innovation The magnitude of technological
Verganti (2014) incremental change in technology and change and meaning change (on
meaning “how people interact with a
Technology-push innovation product and what a product is
incremental change in meaning and viewed as”)
radical change in technology
Meaning-driven innovation
radical change in meaning and
incremental change in technology
Technology epiphanies
Radical change in technology and
meaning
1850039-25

Other categorizations
Leonard-Barton User-driven enhancement The maturity levels for technology

(1995) an improved solution to a known need design (mature design, major
Developer-driven development enhancement, next generation,
a new solution to a known need new to the world) and the levels
User-context development for aligning customer inputs
a new solution to an unexpressed need (/needs) with (existing/new)

New application or combination of product lines (/markets) (current
technologies customers, new customer set,
a novel solution to an identified need new market/unknown customer
Technology/market coevolution set)

an evolving solution to an uncertain
need
Appendix B. Questionnaire Form
Firm innovativeness: the extent of which positive changes (/innovations) a

firm has been making on new product development activities over the last
three years
5-point scale anchored with: (1¼ no change, 2¼ minor improvements, 3¼
minor but continuous improvements, 4¼ major/remarkable improvements,
5¼ radical/transformational improvements).
New product development activities:
1. technical product specifications and functional characteristics

2. ergonomic product features
3. components and materials
4. production techniques and procedures
5. inward and outward logistics methods and procedures
6. supporting activities such as purchasing, accounting, computing and mainte-
nance
7. product aesthetic design
8. product packaging
9. sales channels and product placement methods
10. advertising and promotion techniques (media channels, brand image, customer
specific information systems, etc.)
11. pricing methods (demand-based pricing, discounting systems, etc.)
1850039-26
12. business routines and procedures

13. workplace organisation
14. managing external relationships
15. quality standards and integrated quality management systems
16. information processing systems
Market impact of innovations: the degree to which innovations have a

significant impact on a particular market
4-point scale for the market impact of innovations a firm has been making
on new product development activities over the last three years:
1. no impact on the market or economic activities of the firms operating in the

related market
2. changing the structure of the market (shifts in the distribution of market shares)
3. extending the boundaries of the market
4. creating new customer needs and markets (rendering existing products obsolete)
Market coverage of innovations: the extent of market coverage of innova-

tions a firm has been making on new product development activities over the
last three years
5-point scale anchored with:
1. new to the firm

2. new to the local/regional market
3. new to the national market
4. new to the international market
5. new to the world
Market performance: the relative performance of the firm compared to its

main competitors over the past three years
7-point scale anchored with: (1 ¼ much lower than competitors, 4 ¼ equal
to competitors, 7 ¼ much higher than competitors)
Performance criteria:
1. lead time for new product introduction

2. product/service range
3. increase in market share
4. opening up new markets
5. product/service quality
6. building product awareness
1850039-27
Production performance: the relative performance of the firm compared to

its main competitors over the past three years
7-point scale anchored with: (1 ¼ much lower than competitors, 4 ¼ equal
to competitors, 7 ¼ much higher than competitors)
Performance criteria:
1. production costs
2. volume flexibility of production
3. speed in supplying and delivering products

4. quality of conformance to industry technical standards
Number of new products: the number of new products launched by the firm
over the past three years

R&D intensity: the ratio of R&D expenditures/total sales according to the
average values of the past three years
Sales income of new products: the ratio of sales revenue from new products/
total sales according to the average values of the past three years
References
Abernathy, WJ and KB Clark (1985). Innovation: Mapping the winds of creative de-
struction. Research Policy, 14(1), 3–22.
Andersen, ES (2013). Evolutionary Economics: Post-Schumpeterian Contributions. Park
Avenue South, New York: Routledge.
Ansoff, HI (1970). Corporate Strategy: An Analytic Approach to Business Policy for
Growth and Expansion. New York: Penguin Books.
Balachandra, R and JH Friar (1997). Factors for success in R&D projects and new product
innovation: a contextual framework. IEEE Transactions on Engineering Manage-
ment, 44(3), 276–287.
Basu, S (2014). Product market strategies and innovation types: Finding the fit!. Strategic
Direction, 30(3), 28–31.
Boyd, H, O Walker and JC Larreche (1995). Marketing Management: A Global Strategic
Approach. Chicago, IL: RD Irwin.
Castellaci, F, S Grodal, S Mendonca and M Wibe (2005). Advances and challenges in
innovation studies. Journal of Economic Issues, 39(1), 91–121.
Chandy, RK and GJ Tellis (2000). The incumbent’s curse? Incumbency, size, and radical
product innovation. Journal of Marketing, 64(3), 1–17.
1850039-28
Chesbrough, HW (2003). The Era of open innovation. MIT Sloan Management Review,
44, 35–41.
Christensen, C (1997). Innovators Dilemma. Boston, MA: Harvard Business School Press.
Čiutienė, R and EW Thattakath (2015). Influence of dynamic capabilities in creating
disruptive innovation. Economics and Business, 26, 15–21.
Cohen, WM and DA Levinthal (1990). Absorptive capacity: A new perspective on
learning and innovation. Administrative Science Quarterly, 35(1), 128–152.
Courvisanos, J (2006). Galbraith and the political economy of technological innovation:
Critical perspectives and a heterodox synthesis. In Innovation, Evolution and Eco-
nomic Change: New Ideas in the Tradition of Galbraith, B Laperche, J Galbraith and
D Uzunidis (Eds.), pp. 205–228. Cheltenham, UK: Edward Elgar.
Crawford, M (1997). New Products Management. Homewood, IL: Richard D. Irwin, Inc.
Garcia, R and R Calantone (2002). A critical look at technological innovation typology

and innovativeness terminology: A literature review. Journal of Product Innovation
Management, 19(2), 110–132.
Gibbons, M, C Limoges, H Nowotny, S Schwartzman, P. Scott and M Trow (1994). The
new production of knowledge. The Dynamics of Science and Research in Contem-
porary Societies. London: Sage.
Gobeli, DH and DJ Brown (1987). Analyzing product innovations. Research Manage-
ment, 30(July–August), 25–31.
Gust-Bardon, NI (2014). Regional development in the context of an innovation process.
International Journal of Innovation and Regional Development, 5(4–5), 349–366.
Hair, JF, RE Anderson, RL Tatham and WC Black (1998). Multivariate Data Analysis.
Upper Saddle River, NJ: Pearson Education.
Kalbach, J (2012). Clarifying innovation: Four zones of innovation. Available at https://
experiencinginformation.wordpress.com/2012/06/03/clarifying-innovation-four-
zones-of-innovation (accessed 2 February 2016).
Kleinschmidt, EJ and RG Cooper (1991). The impact of product innovativeness on per-
formance. Journal of Product Innovation Management, 8(4), 240–251.
Kline, SJ and N Rosenberg (1986). An overview of innovation. In The Positive Sum
Strategy: Harnessing Technology for Economic Growth, R Landau and N Rosenberg
(Eds.), pp. 275–305. Washington, DC: National Academy Press.
Kotsemir, MN and D Meissner (2013). Conceptualizing the innovation process — Trends
and outlook. Higher School of Economics Research Paper No. WP BPR, 10.
Leonard-Barton, D (1995). Wellsprings of Knowledge. Boston, MA: Harvard Business
School Press.
Leydesdorff, L and H Etzkowitz (1996). Emergence of a triple helix of university-industry-
government relations. Science and Public Policy, 23, 279–286.
Lundvall, BÅ (1988). Innovation as an interactive process: From user–producer interaction
to the national system of innovation. In Technical Change and Economic Theory, G
Dosi, R Freeman, C Silverberg and L Soete (Eds.), pp. 349–369. London: Pinter.
Nelson, R and S Winter (1982). An Evolutionary Theory of Economic Change.
Cambridge, MA: Harvard University Press.
1850039-29
Norman, DA and R Verganti (2014). Incremental and radical innovation: Design research
vs. technology and meaning change. Design Issues, 30(1), 78–96.
OECD (2005). Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data.
France: OECD Publishing.
Oh, C, Y Cho and W Kim (2015). The effect of a firm’s strategic innovation decisions on
its market performance. Technology Analysis and Strategic Management, 27(1),
39–53.
Ohr, RC and F Mattes (2013). Balancing innovation via organizational ambidexterity.
Available at https://www.innovationexcellence.com/blog/2013/07/11/balancing-in-
novation-viaorganizational-ambidexterity/ (accessed 5 February 2016).

Rice, MP, GC O’Connor, LS Peters and JG Morone (1998). Managing discontinuous
innovation. Research-Technology Management, 41(3), 52–58.
Robertson, TS (1971). Innovative Behavior and Communication. New York, NY: Holt,
Rinehart, and Winston.
Rogers, EM (2003). Diffusion of Innovations, 5th Edn. New York: Free Press.
Roos, G and S Pike (2008). An intellectual capital view of business model innovation. In
Organizational Capital: A Modelling, Measuring and Contextualising, A Bounfour
(Ed.), Vol. 12, pp. 40–62. Taylor & Francis: Crown Land South Australia.
Rothwell, R and W Zegveld (1985). Reindustrialization and Technology. NY: ME Sharpe.
Schuh, G and D Guo (2015). Framework for developing a context-based technology
planning approach for managing discontinuous technological change. In Int. Asso-
ciation for Management of Technology IAMOT 2015 Conf. Proc., Fraunhofer Insti-
tute for Production Technology, pp. 698–716.
Schumpeter, JA (1934). The Theory of Economic Development: An Inquiry into Profits,
Capital, Credit, Interest, and The Business Cycle, Vol. 55. New Brunswick, NJ:
Transaction Publishers.
Song, XM and MM Montoya-Weiss (1998). Critical development activities for really new
versus incremental products. Journal of Product Innovation Management, 15(2),
124–135.
Tidd, J and J Bessant (2009). Managing Innovation: Integrating Technological, Market
and Organizational Change, 4th Edn. Hoboken, NJ: John Wiley & Sons.
Veryzer, RW (1998). Discontinuous innovation and the new product development process.
Journal of Product Innovation Management, 15(4), 304–321.
Zahra, SA and G George (2002). Absorptive capacity: A review, reconceptualization, and
extension. Academy of Management Review, 27(2), 185–203.
Ziamou, PL (1999). The effect of the degree of newness of a really new product on
consumers’ judgments. Advances in Consumer Research, 26, 368–371.
1850039-30
View publication stats

Applying Ansoff'S Growth Strategy Matrix To Innovation Classification

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Applying Ansoff'S Growth Strategy Matrix To Innovation Classification

Uploaded by

Copyright:

Available Formats

See discussions, stats, and author profiles for this publication at: https://www.researchgate.

APPLYING ANSOFF’S GROWTH STRATEGY MATRIX TO

Article in International Journal of Innovation Management · August 2018

Tugba Gurcaylilar-Yenidogan Safak Aksoy

SEE PROFILE SEE PROFILE

IT Outsourcing Issues in Turkey View project

The user has requested enhancement of the downloaded file.

APPLYING ANSOFF’S GROWTH STRATEGY MATRIX TO

TUGBA GURCAYLILAR-YENIDOGAN* and SAFAK AKSOY†

Department of Business Administration,

Published 14 November 2017

Keywords: Innovation strategy; corporate growth; market performance; production per-

an economy that is primarily driven by ideas. Entrepreneurial orientation inﬂu-

technical innovations (product and process innovation) to include non-technical

a new or signiﬁcantly improved product (good or service) or process, a new

Nowadays, innovation is considered as less about incremental innovation and

in determining innovation (Garcia and Calantone, 2002). This approach to inno-

performance and production performance in this study) is still underexplored. As

they could not provide an innovation framework to determine novelty (/newness)

Evolution of Innovation Models

up with new ideas for inventions through technical development to commerciali-

system hinders the performance assessment of a new product.

organisational business that results in improving internal innovations and devel-

Innovation Typologies: “Internal” and “External” Perspectives

view of innovation and discussed two/three levels of innovations that differ in

determining the technological novelty of a product. From this perspective, a really

grid indicates the extent of technological progress representing the improvements in

Growth Strategy and Innovation: Is There Any Dialogue?

current business through market penetration strategies (e.g., increase in market

Table 1. Growth strategies and innovation type — towards a unifying framework.

Product-market characteristics Growth strategies Innovation type

Fig. 2. Conceptual model.

Sample and data collection

was conducted through personal interviews, which in turn resulted in an effective

Accordingly, newness of innovation refers to the degree of product familiarity to

radically innovative, we integrated market coverage of innovations as the evalu-

market share, opening up new markets, product/service quality, building product

Interpreting the results of two-step cluster analysis

Silhouette measure of cohesion and separation

Fig. 3. Model summary and cluster quality.

After presenting the cluster size distribution in the two-dimensional space

Fig. 4. Predictor importance of each variable used in the analysis.

Fig. 5. Cluster distribution.

Fig. 6. Cluster view.

Fig. 7. Innovation clusters.

Interpreting the results of ANOVA

Table 2. One-way ANOVA: Performance differences between innovation

Mean square F Sig.

market performance (the mean difference between Game changer_Disruptive:

þ0.588; _Incremental: þ0.512; _Breakthrough: þ1.439 at the 0.05 level of sig-

interlinked in determining ﬁrm innovativeness. Consistent with the new insight in

growth-based innovation strategy by diversifying ﬁrm operations and hence

Appendix A. Innovation Typologies

Categorization Novelty of innovation Indicators of innovativeness

Balachandra and Incremental Changes in basic technology and

modiﬁcations in the performance,

Table A.1. (Continued )

Categorization Novelty of innovation Indicators of innovativeness

Song and Montoya- Incremental The degree of excellence attained

idea development and screening, screening, business and market

new product development stages from (the relative proﬁciency levels

Robertson (1971) Continuous The inﬂuence of a new product on

Table A.1. (Continued )