Hybrid Strategy, Ambidexterity and Environment: toward an Integrated Typology

Abstract

Hybrid strategy, which emerged as a contingency option to Porter's generic strategies framework [1], defends that in a dynamic environment the simultaneous pursuit of "Low Cost" and "Differentiation" approaches is fundamental for the short-term performance and long-term survival of the firm. A vast amount of literature supports the benefits of adopting a mixed approach of strategy: several empirical studies have proved that a hybrid strategy establishes a firm's performance superiority over the pure strategy choice. The hybrid literature has concentrated on the performance linkage and on the debate countering the pure strategy approach, however very little attention has been paid to the challenges presented by the mixed strategy implementation. In fact, despite the rich empirical literature, it is still not clear how firms that adopt a hybrid strategy may successfully integrate the inherent contradiction of the "Low Cost" and "Differentiation" approaches, escaping from the "Stuck in The Middle" outcome. Consequently, after a careful consultation of the relevant literature, we conclude that several types of hybrid strategy implementation, which should correspond to different business environmental situations, exist. In order to study the characteristics of these different types of hybrid strategies implementations, we propose a typology comprising four types of hybrid strategy implementation, defined by two antecedents of the firm and two antecedents of the environment. As a contribution of this article, the proposed typology has the purpose to fill a methodological gap regarding the adoption of Hybrid strategies and we expect that it could be used as a framework for further studies, aiming to suggest managerial implications and further unveil characteristics of the hybrid implementation. Additionally, we align and contrast the hybrid and ambidextrous approaches, which share many similarities. Despite the fact that they have been confounded in empirical studies, we concluded that hybridity and ambidexterity are distinct and complementary concepts: while hybrid strategy defines the value proposition of the firm (a composition of "Low Cost" and "Differentiation"), ambidexterity focus on how to deliver this value with efficiency (Exploitation) and how to renew it effectively (Exploration).