The Taste of the Future. Strategic Analysis of Novozymes' Entry into the Market of Alternative Proteins

Abstract

The relationship between corporate diversification and performance received a lot of attention from scholars within the field of strategic management across the years. This thesis will strive to contribute to the debate by investigating how innovative companies can ensure that their diversification into new vertical market becomes a positive driver of performance. To achieve that, this paper takes a closer look at the case of Novozymes’ entry into the market of alternative proteins. The study proposes that strategic fit, defined as the congruence between firm’s internal resources and external environment of the target market, plays an important role in defining the outcome of diversification. To determine the existence of strategic fit between Novozymes and the market of alternative proteins, this thesis applied theoretical frameworks associated with industry-based view, resource-based view and the macroenvironmental analysis. The study identified several contingencies between Novozymes and the market of alternative proteins which suggest that the company is going to enjoy the diversification-related synergies associated with the market entry. The findings of this paper suggest that innovative firms should strive to identify the key contingency factors between their internal resources and the characteristics of the target market, prior to the entry decision. The identification of such contingencies suggests the existence of strategic fit, which is predicted to give rise to diversification-related synergies and consequently, lead to enhanced performance of the firm in the target market. Furthermore, the study suggests that for innovative firms operating in high-technology sectors, the ability to leverage knowledge spill overs from the core technological domain in the target market is likely to have a positive effect on performance