Examining the Impact of Competitive Strategies on Corporate Innovation: An Empirical Study in Automobile Industry

Abstract

This study is devoted to the empirical assessment of the impact of competitive strategies on corporate innovation in the automobile industry of Iran. The study involves a questionnaire-based survey of managers from two major automobile manufacturers (SAIPA and Iran Khodro) in Iran. A total of 286 useable questionnaires were received from managers from the two manufacturers. These were subjected to a series of correlational and regression analyses. The measures of the independent (competitive strategies) and dependent (corporate innovation) variables are based on literature. The results reveal that competitive strategies of Porter had a positive and significant influence on corporate innovation. With strong statistical significance, three competitive strategies-cost leadership, differentiation, and focus-provide an explanation for variations in corporate innovation dimensions including innovation in product, innovation in process, and administrative innovation. Although the literature has long pointed out the importance of competitive strategies as a determinant of innovation, strategists have not focused on the impact of each strategy on the dimensions of innovation. Thus, this study makes a contribution towards filling this gap.