Table 2 An overview of crises and... | Emerald Publishing

Table 2

An overview of crises and innovation responses of case companies

Firm	Crisis description	Innovation responses
A	Description: In 2025, Firm A experienced a drastic decline in sales due to US-China geopolitical glitches Type: Imminent external	Firm A emphasized survival as the top priority, thereby adopting a conservative position to focus on short-term knowledge-deepening innovation: “We adopted a conservative approach, opting out of projects with low profit margins or potential risks of loss. We prioritized innovative strategies to ensure the company's survival”
B	Description: In 2025, Firm B experienced a drastic decrease in market demand caused by the tariff hikes Type: Imminent external	Firm B substantially increased R&D, especially engaging with AI applications that did not lie within their existing knowledge base, focusing on long-term knowledge-broadening innovation: “We have invested substantially in R&D. This is because our focus lies in differentiated products, often involving innovation, rather than standardized or generic offerings … We have been actively researching AI recently, including how to apply and implement AI within our industry and its specific sub-sectors”. Firm B also emphasized the importance of cash flow and survival, thereby engaging with short-term knowledge-deepening innovation: “I believe survival is a critical consideration, closely linked to the company's cash flow. I place significant emphasis on this aspect. I believe maintaining a healthy cash flow in the accounts is crucial; otherwise, the company's very existence could be jeopardized”
C	Crisis 1 Description: Over the past few years, Firm C experienced a drastic decrease in market demand due to the COVID-19 pandemic Type: Imminent external Crisis 2 Description: The CEO perceived the gradually intensifying competition, which, although it was not immediately survival-threatening, was likely to erode profitability over time Type: Latent external	Response to Crisis 1: Firm C's CEO emphasized the importance of survival, thus engaging with short-term knowledge-deepening innovation: “The survival of our enterprise is fundamental in the current environment. If we cannot secure our immediate survival, then the long-term prosperity becomes irrelevant” The CEO also viewed this crisis as a potential opportunity for future development, thus engaging with long-term knowledge-broadening innovation: “Opportunity often arises from crisis. A crisis compels you to evolve and strategize. Therefore, I have always embraced this sense of urgency inherent in crises, as each one propels growth” Response to Crisis 2: Instead of waiting for further consequences, the firm quickly established a new online promotional platform to attract more customers, focusing on short-term knowledge-deepening innovation: “Even if the company's revenue is impacted, we must move forward with this initiative. If we don't take action now, the company will eventually face closure, leaving no room for future development”
D	Description: Firm D experienced a drastic decline in revenues due to a product design failure Type: Imminent internal	Firm D quickly refined their product design, mainly based on short-term knowledge-deepening innovation: “A key aspect [to address the crisis] involves analyzing and processing returned products to identify areas for improvement … We concentrated on several specific product types, focusing on a limited range of products while moving away from a broad, scattered approach” Firm D also recognized the risks involved in the existing product and thus increased R&D expenditure to develop new products, based on long-term knowledge-broadening innovation: “There has been an increase in R&D and marketing investment. We have focused our R&D efforts and broadened our product offerings”
E	Crisis 1 Description: Firm E experienced a supply disruption of a core component due to the US-China geopolitical glitches Type: Imminent external Crisis 2 Description: Firm E also suffers from worsening management efficiency due to a lack of talent Type: Latent internal	Response to Crisis 1: Firm E invested in developing new technology, i.e. the magnetic transportation equipment, based on long-term knowledge-broadening innovation: “Our current endeavor is to develop magnetic levitation logistics lines, which is the pinnacle of technology in this industry” Firm E also sought alternative domestic suppliers and refined technologies to reduce costs, through short-term, knowledge-deepening innovation: “When facing sanctions on the laser modules, we directly offer clients a price reduction and propose alternative solutions by using domestically produced laser modules” Response to Crisis 2: Firm E refined the management process in several key departments, focusing on short-term knowledge-deepening innovation: “We implemented numerous process refinements, particularly within the project department”
F	Description: Firm F experienced a price war initiated by competitors that aggressively reduced prices Type: Imminent external	Firm F viewed this price war as an opportunity to transform its competitive strategies, based on long-term knowledge-broadening innovation: “Our company opted for a high-end approach, integrating IT technology into the product and focusing on intelligent equipment, rather than competing on price”
G	Description: Firm G viewed the emergence of AI as a crisis because AI may reduce the current customers' use of the firm's knowledge database Type: Latent external	Firm G has established a new team to develop AI applications for its products, aiming to enhance its future competitiveness through long-term, knowledge-broadening innovation: “For an information or data service provider like us, the opportunities of AI indeed outweigh the risks.”
H	Description: Firm H suffered from uncertain and unclear sourcing strategies Type: Imminent internal	Firm H increased the R&D expenditure by 20% and hired more R&D employees, but their innovation mainly focused on short-term and knowledge-deepening activities: “We primarily focus on innovation at the application layer. It's about how we integrate new technologies in novel ways or apply them to new use cases, which mainly focuses on resolving existing pain points”

Firm	Crisis description	Innovation responses
A	Description: In 2025, Firm A experienced a drastic decline in sales due to US-China geopolitical glitchesType: Imminent external	Firm A emphasized survival as the top priority, thereby adopting a conservative position to focus on short-term knowledge-deepening innovation: “We adopted a conservative approach, opting out of projects with low profit margins or potential risks of loss. We prioritized innovative strategies to ensure the company's survival”
B	Description: In 2025, Firm B experienced a drastic decrease in market demand caused by the tariff hikesType: Imminent external	Firm B substantially increased R&D, especially engaging with AI applications that did not lie within their existing knowledge base, focusing on long-term knowledge-broadening innovation: “We have invested substantially in R&D. This is because our focus lies in differentiated products, often involving innovation, rather than standardized or generic offerings … We have been actively researching AI recently, including how to apply and implement AI within our industry and its specific sub-sectors”.Firm B also emphasized the importance of cash flow and survival, thereby engaging with short-term knowledge-deepening innovation: “I believe survival is a critical consideration, closely linked to the company's cash flow. I place significant emphasis on this aspect. I believe maintaining a healthy cash flow in the accounts is crucial; otherwise, the company's very existence could be jeopardized”
C	Crisis 1 Description: Over the past few years, Firm C experienced a drastic decrease in market demand due to the COVID-19 pandemicType: Imminent externalCrisis 2 Description: The CEO perceived the gradually intensifying competition, which, although it was not immediately survival-threatening, was likely to erode profitability over timeType: Latent external	Response to Crisis 1: Firm C's CEO emphasized the importance of survival, thus engaging with short-term knowledge-deepening innovation: “The survival of our enterprise is fundamental in the current environment. If we cannot secure our immediate survival, then the long-term prosperity becomes irrelevant”The CEO also viewed this crisis as a potential opportunity for future development, thus engaging with long-term knowledge-broadening innovation: “Opportunity often arises from crisis. A crisis compels you to evolve and strategize. Therefore, I have always embraced this sense of urgency inherent in crises, as each one propels growth”Response to Crisis 2: Instead of waiting for further consequences, the firm quickly established a new online promotional platform to attract more customers, focusing on short-term knowledge-deepening innovation: “Even if the company's revenue is impacted, we must move forward with this initiative. If we don't take action now, the company will eventually face closure, leaving no room for future development”
D	Description: Firm D experienced a drastic decline in revenues due to a product design failureType: Imminent internal	Firm D quickly refined their product design, mainly based on short-term knowledge-deepening innovation: “A key aspect [to address the crisis] involves analyzing and processing returned products to identify areas for improvement … We concentrated on several specific product types, focusing on a limited range of products while moving away from a broad, scattered approach”Firm D also recognized the risks involved in the existing product and thus increased R&D expenditure to develop new products, based on long-term knowledge-broadening innovation: “There has been an increase in R&D and marketing investment. We have focused our R&D efforts and broadened our product offerings”
E	Crisis 1 Description: Firm E experienced a supply disruption of a core component due to the US-China geopolitical glitchesType: Imminent externalCrisis 2 Description: Firm E also suffers from worsening management efficiency due to a lack of talentType: Latent internal	Response to Crisis 1: Firm E invested in developing new technology, i.e. the magnetic transportation equipment, based on long-term knowledge-broadening innovation: “Our current endeavor is to develop magnetic levitation logistics lines, which is the pinnacle of technology in this industry”Firm E also sought alternative domestic suppliers and refined technologies to reduce costs, through short-term, knowledge-deepening innovation: “When facing sanctions on the laser modules, we directly offer clients a price reduction and propose alternative solutions by using domestically produced laser modules”Response to Crisis 2: Firm E refined the management process in several key departments, focusing on short-term knowledge-deepening innovation: “We implemented numerous process refinements, particularly within the project department”
F	Description: Firm F experienced a price war initiated by competitors that aggressively reduced pricesType: Imminent external	Firm F viewed this price war as an opportunity to transform its competitive strategies, based on long-term knowledge-broadening innovation: “Our company opted for a high-end approach, integrating IT technology into the product and focusing on intelligent equipment, rather than competing on price”
G	Description: Firm G viewed the emergence of AI as a crisis because AI may reduce the current customers' use of the firm's knowledge databaseType: Latent external	Firm G has established a new team to develop AI applications for its products, aiming to enhance its future competitiveness through long-term, knowledge-broadening innovation: “For an information or data service provider like us, the opportunities of AI indeed outweigh the risks.”
H	Description: Firm H suffered from uncertain and unclear sourcing strategiesType: Imminent internal	Firm H increased the R&D expenditure by 20% and hired more R&D employees, but their innovation mainly focused on short-term and knowledge-deepening activities: “We primarily focus on innovation at the application layer. It's about how we integrate new technologies in novel ways or apply them to new use cases, which mainly focuses on resolving existing pain points”

Source(s): Created by authors