Strategy and Innovation

Impact of Strategy on Successful Innovation: The Case of Fujitsu Limited

Innovation, both product- and process-wise, has increasingly become a crucial source of competitive advantage in today's business world. Organisations that continually reinvent their products and processes in accordance to environmental dynamics achieve greater success in the marketplace compared to those that pay little or no attention to innovation (Beyene & Wu, 2016). Successful innovation, however, is predominantly dependent on an organisation's business strategy (Hajar, 2015). A firm's strategic orientation determines the extent to which it introduces new products or new ways of doing things. In other words, without the right strategy, an organisation may not innovate successfully. The connection between strategy and innovation is particularly true for Fujitsu Limited, a Japanese information and communication technology (ICT) company. With reference to Fujitsu, this paper discusses the impact of strategy on innovation. Attention is particularly paid to how the company has capitalised on the value of the business strategy process, how the firm can improve strategic innovation, what information should be leveraged within a business strategy, and how business strategy may be used to further innovation within the organisation.

Fujitsu was founded in 1935 as a subsidiary of Fuji Electric. Initially, the firm manufactured telephones and automatic exchange equipment, but later expanded to computers and ICT services with a mission to exploit ICT to generate value for both businesses and the society. The growth was mainly fuelled by extension of its central businesses as well as acquisitions. By 2000, Fujitsu was the top ICT firm in Japan, delivering a wide array of ICT products and services, including big data, cloud, and security solutions. With about 95,000 pending and approved patents worldwide and 162,000 employees in 420 subsidiaries spread across more than 100 countries, the firm's revenues were $46 billion as of 2014 (Edmondson & Harvey, 2016). This makes the firm one of the largest ICT companies in the world. Presently, the firm is focusing on increasing its competitive advantage in the North American market, which is dominated by IBM, Accenture, and Hewlett Packard (HP).

Fujitsu's impressive performance over the years can be attributed to its business strategy, which has orientated the firm towards innovation. Before proceeding further, it is important to understand what business strategy means. Essentially, a business strategy denotes the means a firm utilises to achieve its goals and objectives (Hill & Jones, 2012). It refers to the scope of a firm's business activities... A firm's competitive advantage emanates from its business strategy. This may be in relation to product differentiation, economies of scale, prices, and so forth. Whereas there are different frameworks for examining business strategy, a common framework is Miles and Snow's model. The framework categorises firms into four groups: prospectors (broad product line and focused on innovation and exploiting market opportunities); analysers (operate in two or more product-market areas); defenders (limited product line and focused on enhancing the efficiency of the current operations); and reactors (lack a steady strategy, often reacting when forced by marketplace pressures) (Hajar, 2015).
Based on the above typology, Fujitsu can be described as a prospector as far as its strategic orientation is concerned. Exemplifying innovation, the firm boasts several products, ranging from servers and mobile devices to storage hardware, microprocessors, software, and cloud computing solutions. The firm continues to exploit opportunities in the ICT marketplace. Recently, in partnership with TechShop, a Silicon Valley start-up, the firm has introduced a mobile makerspace dubbed TechShop Inside (Edmondson & Harvey, 2016). Aimed at fostering learning in science, technology, engineering, arts, and maths across all ages, the mobile makerspace is a 24-foot mobile trailer equipped with mini 3D printers, laser cutters, tablets, and other electronic equipment. The trailer provides students with an environment for hands-on learning, an undoubtedly powerful and transformative innovation as far as student learning is concerned. Without its strategic orientation, it is unlikely that Fujitsu would have exploited the limitless possibilities the world of technology offers. This clearly demonstrates the impact of strategy on innovation. Indeed, as put by Hajar (2015), strategy significantly drives innovation. A strategy that orientates a firm towards market opportunities as well as new products and processes will organise its resources, capabilities, and competencies around innovation.

One impressive aspect about Fujitsu's innovation processes is how the firm capitalises on the business strategy process. The business strategy process basically entails defining the firm's strategic direction and allocating resources to pursue that strategy (Hill & Jones, 2012). It involves setting goals and objectives, identifying mechanisms of achieving those goals, and mobilising the resources necessary for the achievement of the goals. This process is driven by data relating to the firm's internal and external environment. The firm must consider its strengths and weaknesses, the market, the competitive environment, and the…