It is important that the company sets out the innovation strategy clearly for all to read because it is going to be the basis of the criteria for decisions in setting up the product development programme and also during the individual product development projects. The innovation strategy is the basis for all innovation in the company, and the basic strategy leads to the company direction for innovation.

For example many large food companies want to keep their position in the industry consolidated with some growth, and this would likely be associated with incremental changes, low risk, gradual company organisation change, and internal technology with acquisitions when necessary to acquire new technology.

The small company with a new technology and wishing to grow would combine discontinuous change, with high risk and major company change, and would grow its own technology.

It is important to recognise the interrelationship of the innovation strategy with product development. All product innovations of course lead to new products, but most processing innovations and marketing innovations and even some of the organisational innovations lead to new products. So the innovation strategy has to be studied and incorporated when building the product strategy.

The innovation strategy as a basis for product development defines:

     the innovation areas and the types of innovation;

     the overall aims of the innovations;

     the growth in sales revenue/profits expected;

     the aims of the innovations in growing the present markets or
        diversifying into other markets;

     the resources and the timing available for the innovation strategy and
        the individual innovation programmes;

     the company organisation for innovation.

In the innovation strategy within the business strategy, there is a need for top management to outline the type of organisation, and the resources of people, finance, time and equipment, which will be provided for the development of the innovation. An innovation strategy without defining the means for carrying it out is apt to be slow in actioning, and some parts of it may never be put into action. The Board of Directors needs to balance the company's ideal innovation strategy and the company's capabilities and resources before finalising the innovation strategy.