Effects of Customer and Innovation Asset Configuration Strategies on Firm Performance

Both customer and innovation assets are important to firm performance. Prior research has mostly examined these assets at the firm level and has not distinguished between the effects of asset depth relative to competitors and asset breadth across different segments. Using configuration theory and the resource-based view of the firm, the authors propose that how these assets interact to influence performance depends on both depth and breadth because these features reflect whether the assets are likely to create and/or appropriate value when deployed. Empirical results from two studies one using secondary data and another using primary data from a survey of senior managers indicate that performance is highest when firms employ configurations using deep customer and broad innovation assets or deep innovation and broad customer assets. In contrast, firm performance variability decreases in the presence of deep deep and broad broad asset configurations. The effect of configuration strategies on firm performance also is typically greater in dynamic than in stable environments.