Incremental Innovation and Business Performance: Small and Medium‐Size Food Enterprises in a Concentrated Industry Environment

Past studies have analyzed issues pertaining to the definition of innovation, methods of measuring innovation and the relationship between organizational characteristics and innovation orientation. Extant studies have adopted a large business or a technologically intense context of study. By studying the adoption of new products, methods, systems, markets, and supply sources in small and medium‐size seafood retail enterprises, this study reviews innovation and the adoption of innovation in a broader and novel context. Seafood retailers in this study operate in a concentrated industry environment where two large supermarket chains account for more than 70 percent of national food retail sales. The seafood retailers operate in a highly competitive environment, the industry is maturing, the firms are not very advanced technologically, and the sector has a disproportionately large number of firms owned and operated by persons of non‐English speaking backgrounds. The results of the study indicate that incremental innovation offers substantial competitive advantages to small and medium‐size firms, that incremental innovations can be adopted and operationalized rapidly by entrepreneurs with different cultural backgrounds and skills, and that small and medium‐size firms that focus on sales and marketing innovations are profitable and are able to compete successfully with large businesses.