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of reactive firms to disruption aligns with critiques found in the literature, such as those by Eisenhardt and Martin (2000), who argued that reactive strategies often lack the foresight and preparedness necessary to navigate major disruptions effectively. The findings suggest that while reactive strategies might allow firms to capitalise on short- term opportunities, they are particularly vulnerable in periods of widespread uncertainty, where pre-emptive action and strategic foresight are critical.
The varying degrees of susceptibility observed among passive and stagnant strategies further illustrate the complex interplay between internal capabilities and external dependencies. While some firms were able to maintain their innovation activities despite their reliance on external sources, others struggled, highlighting the importance of internal resourcefulness and strategic flexibility. The literature on dynamic capabilities suggests
table 2 Summary of regression model
that firms with stronger internal capabilities are better equipped to reconfigure their operations in response to external shocks, a notion supported by these findings (Teece, 2007). However, the challenges faced by reactive and passive innovators also point to the limitations of relying too heavily on external partners, especially when those partners are themselves vulnerable to disruption.
Effects of innovation strategies on innovation outcomes
After determining the different innovation strategies, an ordinary least squares (OLS) regression model was used to assess the relationship between different innovation strategies, firm characteristics, and their effects on various innovation outcomes. This study focused on four key innovation outcomes, namely: Increased Revenue, Reduced Costs, Reached New Markets, and Developed New Intellectual Property. Table 2 presents the summary of the regression model.
Independent variables
dependent variables
Increased revenue
reduced Costs
reached New Markets
developed New IP
Constant
0.958 (0.005) ***
0.977 (0.002) ***
0.005 (0.989)
0.002 (0.996)
Passive
-0.213 (0.535)
-0.184 (0.561)
0.714 (0.065) **
0.431 (0.331)
reactive
-0.087 (0.799)
-0.064 (0.839)
0.866 (0.025) **
0.697 (0.115)
Stagnant Innovators
-0.843 (0.015) **
-0.857 (0.007) **
0.113 (0.770)
0.078 (0.860)
sizegrp
0.044 (0.076)
0.019 (0.407)
0.022 (0.416)
0.004 (0.890)
age
-0.0001 (0.822)
0.0003 (0.629)
-0.001 (0.011) **
-0.0004 (0.600)
Increased Revenue
The analysis revealed that none of the innovation strategies showed any significant relationships with increased revenue except for the stagnant strategy, although the coefficient was significantly negative (p < 0.05), which suggests that firms that chose a stagnant innovation strategy were more likely to see a decrease in revenue. This outcome is consistent with Chesbrough’s (2003) argument that innovation stagnation can severely hamper a firm’s financial performance.
The inability of stagnant innovators to adapt to changing market conditions or to invest in meaningful innovation likely explains their poor financial outcomes. This result reinforces the importance of strategic agility and adapt- ability in sustaining competitive advantage and highlights the risks associated with failing to innovate in a dynamic business environment (Kaliappen & Hilman, 2017).
Reduced Costs
The regression results for reduced costs showed similar trends, with none of the innovation strategies showing significant associations except for agribusinesses that took stagnant innovation strategy. A negative coefficient (p < 0.01) suggests that stagnant innovators were more likely to see increased costs.
Reached New Markets
The regression analysis indicated a significant relationship between innovation strategies and reaching new markets. Particularly, businesses that took a ‘Reactive’ strategy were more likely to reach new markets (coeff 0.866, p<0.05). Meanwhile, with a positive coefficient and marginally significant (p < 0.1), firms that took a passive innovation strategy, were also likely to also reach new markets the, suggesting that passive innovators have a tendency to reach new markets. This aligns with the concept of dynamic
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