The synergy effects of product, process, marketing, and organizational innovation are examined with consideration of the innovativeness levels and industrial categories. This study also investigates the effect of a firm’s strategic orientations, exploration and exploitation, on innovation activities. Results indicate that exploration and exploitation orientations have positive impacts on product innovation and process innovation respectively. Process innovation encourages both radical and incremental product innovation. In case of the moderating effect of marketing and organizational innovation, there are some differences between high-tech and low-tech industry. For high-tech firms, the relationship between a new product and firm performance is increased with the introduction of marketing innovation. In the case of low-tech firms, process innovation has direct and positive impacts on a firm’s performance with organizational innovation. The findings show that the synergy effects of innovation exist and can be changed depending on the innovativeness levels and industrial categories.
With the fast pace of technological change, the role of innovation on a firm’s survival has received a great deal of scholarly attention (Rubera & Kirca, 2012; Rust, Ambler, Carpenter, Kumar, & Srivastava, 2004; Srinivasan, Pauwels, Silva-Risso, & Hanssens, 2009; Tellis, Prabhu, & Chandy, 2009) and managerial attention (Cheah, Lang, Snowden, & Watts, 2014). However, there are warnings for firms not to rely solely on new products for survival due to possible market failure (Chiesa & Frattini, 2011; Simpson, Siguaw, & Enz, 2006) and/or imitation by competitors (Naranjo-Valencia, Jiménez-Jiménez, & Sanz-Valle, 2011). Therefore, much of the research has expanded its scope to include different types of innovation such as process, organizational, and marketing innovation and examined when their interrelationship is effective in increasing firm performance. For example, Camisón and Villar-López (2014) reveal that the adoption of organizational innovation improves the firm’s technical capabilities to develop new products and processes that lead to their superior performance. Similarly, Piening and Salge (2015) show that organizational capabilities that manage a wide range of innovation-related activities enable a firm to increase the likelihood of process innovation activity and its profit margins. In addition, the implementation of marketing innovation is proven to be effective in increasing firm performance (e.g., Gupta, Malhotra, Czinkota, & Foroudi, 2016).