This study aimed to determine how incumbent firms can enter a new strategic sub-segment which requires mastering new practices. Situated in the lodging industry, it examined the entrance of three incumbent lodging companies (ILCs) into the emerging lifestyle sub-segment.
Using a Strategy-as Practice lens, this study combined collective case study with constructivist grounded theory to understand how three ILCs—Starwood, Marriott, and Hilton—developed, adapted, and retooled their practices when entering the emerging lifestyle field. Thirty open-ended elite interviews were conducted, and cross-case synthesis preceded development of a theoretical model.
Analysis revealed five overarching dimensions, indicating ILCs succeed in lifestyle through a decentralized culture of innovation, where lifestyle management achieves autonomy as an ambidextrous business unit. To capture the essence of lifestyle, ILCs balance exploration and exploitation, using dynamic capabilities to maintain competitive stance and overcome barriers to innovation.
The exploratory nature of the study and reliance upon industry experts provide impetus for larger studies to refine and empirically test the resulting theoretical model. Applicability of the model to incumbent firms in non-lodging fields should also be examined.
The findings provide principles for other ILCs entering the lifestyle sub-segment and navigating future trends in lodging, prompting realignment to establish competitive stance and a culture of innovation.
The model developed through this study provides a framework for understanding incumbent firm response to trends across industries. It enables future research to confirm and extend these exploratory findings, in lodging and other fields.Keywords
Dynamic capabilities, Exploration and exploitation, Strategy-as-practice, Lodging, Lifestyle