EVOLUTION OF INNOVATION STRATEGIES DURING THE MARKET LIFECYCLE
EVOLUTION OF INNOVATION STRATEGIES DURING THE MARKET LIFECYCLE

Summary/Abstract: Innovation is at the heart of firm’s success. As the firm evolves along the market lifecycle, the nature and contribution of innovation change dramatically. At the beginning the emphasis is on product innovation, in mid cycle on new marketing and financial solutions, the concern being commercialization and growth. At maturity the focus shifts to production innovation and to financial innovation, the recycling the excess cash flows into other productive ventures. Using the concept of the market and organization lifecycle, this paper builds an explanatory and predictive model of the evolution of core innovation as the market develops, matures and declines. It concerns the dynamics of innovation, the innovation profile along the lifecycle and the innovation project profile. The lifecycle has the innate capacity to provide a logical framework for the innovation process and a lot more that both explains and predicts. So in this sense, the lifecycle becomes a template that can be relied upon to trace the evolution of the innovation strategies of the firm, as it progresses along the market curve. Even so the lifecycle sufficiently explains the evolution of general firm strategies, HR practices, IT concepts, IP strategies, compensation practices, marketing approaches and financial responses to name a few of the important management challenges that can be better structured and understood. Our goal is to construct model that will allow practitioners to follow with some certainty their innovation initiatives and provide an underlying rationale for the different characteristics of innovation as the firm proceeds from start up stage to growth then on to maturity and eventually into decline. The focus for this article though is innovation, which is a subset of the other phenomena that can be explained using the lifecycle. Using the concept of the lifecycle we can trace the evolution of innovation strategy, its profile and the projects that deliver innovation. We can link these to the underlying dynamics of both the market and the situation of the firm within the market.

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