Innovation through acquisition

Abstract

Innovation is critical to the market position and financial performance of restaurant chains. Four common internal innovation strategies are typically used to develop new equipment, products, and concepts. However, the restaurant industry is structured in such a way that those strategies may be inappropriate for concept development. Instead, a growing number of companies are using a strategy of "innovation through acquisition." The notion of acquisition as a legitimate substitute for concept development is novel. Instead of relying on internally driven R&D, these companies wait for the marketplace to select winning concepts, which they then acquire and develop.