Strategic Innovation Based On Network Economy

In 21 century, network economy accelerates the development of economic globalization. It brings a greater market space for enterprise development. To some extent, the success of modern enterprise depends on flexible strategic management. That is to say we change all kinds of resources into social needed products and service. A modern enterprise must be adapted for environmental change on strategy. So it is significant to present firm strategic innovation under the network economy.The paper, regarding background of network economy and firm strategy as subject matter, deals with the strategic level of innovation of the firm. It is studied to find out that importance of firm strategy in the network economy is transforming from an action pattern of resource allocation to a systemic capability of the firm, a substantial change for role of strategy. Contrasting the role of strategy in the traditional economy characterized by physical world rather than cyberspace, the firm strategy as a capability is possessing non-linear advantage of innovation. In this innovation-led strategy, the business model itself instead of previous end product-market matrix had to change. The firm, driven by win-win situation strategy which is based on inter-firm arrangements, makes full of its own and leverage other core competencies to create instant competitive advantages featuring discontinuities that is called non-linear competitive advantages.In contrast to traditional economy, the paper presents the connotation of firm strategic innovation. It introduces the content of strategic innovation emphatically, including core competencies, outsourcing, virtual organization and supply chain management. Then it points out that the enterprise must construct its network from inside and outside. And it presents two methods of strategic innovation which are organization innovation and strategic alliance. Finally, it analyzes the presentation of our enterprise strategic innovation and gives adaptive strategies according to the example of electric industry. In addition, it also presents the ideas and methods of strategic management which are adapted for our enterprises. Our enterprises must develop stably and constantly.