Strategic orientation, innovation patterns and performances of SMEs and large companies

Purpose - The purpose of this study is to examine the similarities and differences in the strategic orientation and innovation patterns of small to medium-sized enterprises (SMEs) and large companies and to investigate their implications for market performance. Design/methodology/approach - Miles and Snow's strategic typology is applied to 592 new products to determine their companies' strategic orientations. Data collected over a two-year period by 62 companies in the Italian yogurt industry are analyzed. Findings - The results show that, while large firms operate with a prospector orientation, SMEs have a defender or reactor orientation. Only a small number of SMEs can innovate successfully, and an ex post facto investigation reveals that these firms follow an open innovation model. Originality/value - The findings fill a gap in the literature by clarifying the similarities and differences in the strategic orientations, innovation patterns and performance of SMEs and large companies in a dynamic industry environment. The study also provides insights for managers in new food product development who are concerned about low rates of innovation and high rates of failure.