Incremental innovation and business performance: small and medium-size food enterprises in a concentrated industry environment

TL;DR: In this article, the authors studied the adoption of new products, methods, systems, markets, and supply sources in small and medium-size seafood retail enterprises and found that incremental innovation offers substantial competitive advantages to small and Medium-size firms, and that incremental innovations can be adopted and operationalized rapidly by entrepreneurs with different cultural backgrounds and skills.

Abstract: Past studies have analyzed issues pertaining to the definition of innovation, methods of measuring innovation and the relationship between organizational characteristics and innovation orientation. Extant studies have adopted a large business or a technologically intense context of study. By studying the adoption of new products, methods, systems, markets, and supply sources in small and medium-size seafood retail enterprises, this study reviews innovation and the adoption of innovation in a broader and novel context. Seafood retailers in this study operate in a concentrated industry environment where two large supermarket chains account for more than 70 percent of national food retail sales. The seafood retailers operate in a highly competitive environment, the industry is maturing, the firms are not very advanced technologically, and the sector has a disproportionately large number of firms owned and operated by persons of non-English speaking backgrounds. The results of the study indicate that incremental innovation offers substantial competitive advantages to small and medium-size firms, that incremental innovations can be adopted and operationalized rapidly by entrepreneurs with different cultural backgrounds and skills, and that small and medium-size firms that focus on sales and marketing innovations are profitable and are able to compete successfully with large businesses.