Adaptive innovation – a strategy provides a road map for sustaining a firm’s profitability through innovation. As industries emerge and evolve (e.g. mobile phones), firms must anticipate changes and plan how to sustain their positioning in the industry and possibly migrate their businesses to new industries e.g. IBM has re-invented itself from mainframe to PC manufacturing and then to a systems solution provider.  Companies like Xerox and Kodak are entrenched in outdated competitive strategic positions.

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Generally, profitability depends on the ability to create sustainable competitive advantage/positioning i.e. in terms of capabilities, processes and innovation.

 

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