Dynamic Capabilities in the Food Industry? - On the Applicability of the Evolutionary Orientated Resource Based View of Firm

An important indicator or even the crucial factor of the competitiveness of a company can beseen in its innovative capacity, i.e. the abstract capacity to launch continuous product innovationsand to implement the required processes in the internal structure of an organization. This isalso true for the food industry as several studies of the broad area of innovations in the food markethave shown (Galizzi/Venturini, 1996). From a more macroeconomic perspective, the nationalinnovation systems have been analyzed, as well as general trends in the food sector (Menrad,2001).In the empirical literature we find several surveys analyzing the influence of the innovative performanceof firms in the food industry (Herrmann et al., 1996; McNamara et al., 2003). Most ofthese contributions concentrate either on statements on the Input-Output Relationship of innovationactivities or include analysis within the Structure-Conduct-Performance Paradigm providedby the scholars of the Harvard School. Both aspects are starting points for empiricalresearch as well as in both cases the process-related and dynamic elements of innovation aretreated as a black box.The general intention of this paper is to find a more theoretical framework which explains theinnovative capacity of firms that are involved in the focused sector. In this regard the conceptof Dynamic Capabilities provided by Teece et al. (1997) and Eisenhardt/Martin (2000) arebroadly accepted as a useable explanation of firms' innovative capacity. Since these conceptswere designed with a particular regard to typical high-tech industries like IT-branch, telecommunicationand biotechnology, the question comes up if these approaches do essentially fit tothose conditions we can observe on the food market. Thus, the purpose of this paper is twofold:first, we want to introduce and discuss the concepts of dynamic capabilities in the context offirms' innovative capacity and market dynamics. Second, we are going to analyse the explanatorypower and finally the applicability of dynamic capabilities to the food industry.We will start with an introduction and critical discussions of the concepts of Dynamic Capabilities(II) that are regarded as the recent extension on RBV. In order to test the applicability ofDynamic Capabilities to the food market, we concentrate the analysis on three main criteria (III)derived from the theoretical background. Based on those, we will finally draw a conclusion (IV)on the applicability of the approach discussed.