Purpose
What effects does radical innovation produce on the dialectical relationship between enterprises and their environment? In this paper, by adopting the dynamic adaptation matrix methodological framework, the author addresses this research question by discussing the evolution of the music industry in the period of 1999-2013. The purpose of this study is to identify possible co-evolutionary adaptation paths, namely, virtuous or contradictory adaptation cycles.
Design/methodology/approach
The paper is presented as a descriptive comparative case study about the major changes that have occurred in the sector, and this could be of interest to the industry stakeholders. The paper also contributes to the debate about co-evolution as it is an empirical implementation of the adaptation matrix and sheds light on the main environmental dynamics.
Findings
The author found that for a low level of environmental determinism and moderate degree of strategic choice, cost leadership strategy dominates other strategic options. For moderate levels of environmental determinism, differentiation-marketing strategy ensures a better performance than differentiation-innovation strategy. Finally, for a high level of both environmental determinism and strategic choice, differentiation-innovation strategy is the best strategic option among differentiation strategies.
Practical implications
The adaptation matrix, especially in its dynamic form, can be applied to understand the changes within a sector with a co-evolutionary lens and to analyze critically the strategic choices enacted by the market’s incumbents.
Originality/value
This study may have useful implications for both scientific research and managerial practice. In fact, it is intended for all scholars and practitioners interested in exploring the nature of organizational adaptation, especially in industries affected by major technological changes, such as the music industry, which only recently has been considered as a fertile ground for research.
