The Relation between Competitive Tension and Strategic Innovation

The main object of this paper is to shed light on the relationship between competitive tension and strategic innovation. Competitive tension being the strain between a focal firm and a given rival that is likely to result in the firm taking action against the rival may have another strategic consequence which affects innovativeness of the firm. Drawing on the awareness-motivation-capability perspective, we tried to show how perceived competitive tension, as constructed from managers’ and industry stakeholders’ competitor assessments, is influenced by the independent effects of three factors: relative scale, rival's attack volume, and rival's capability to contest. This study also attempts to find the influence of competitive tension on strategic innovation decisions and implementation. A quantitative research design was employed. The research results indicate that competitive tension has direct effects on not only attack to rival but also on innovation decisions and implementation.