Capabilities allocation and strategic choices. The case of Italy's cosmetic sector

This paper investigates the role of two different strategic orientations (market orientation and technology orientation) in contributing to the innovative capabilities and business performance of firms. It is concluded that in sectors sharing characteristics of both science-based and traditional production business models, innovation is not the only driver of success, and that alternative strategies or combinations of strategies might lead to equally acceptable economic performance targets. To test our hypotheses, we conducted a survey in the Italian cosmetics industry on a sample of 80 firms. The study indicates that there is no one optimal way in terms of improving economic performance: typically, market-oriented approaches can achieve profitability comparable to those of companies with strong technological orientation and superior innovative capability