Innovation strategy and its impact on the company’s competitive position

Introduction/background: The creation of a knowledge-based economy determines the growth of interest in innovations and the possibility of using them as a tool for building a competitive advantage. This requires companies to develop an appropriate innovation strategy. Its choice is determined by the environment and the company's own capabilities. On the other hand, the effectiveness of strategic decisions in the area of innovation contributes to building a company's competitive advantage. Aim of the article: The aim of the article is to present the cause-effect relations between the choice of innovation strategy and the competitive position of the enterprise. Materials and methods: The methods of critical analysis and synthesis, the method of generalization and logical methods as well as the desk research method were used in the research process. Result and conclusions: As a result of the work, a concept has been developed and direct and indirect consequences of innovation activity have been classified. The choice of innovation strategy usually is based on the direct financial results. But the indirect results are important for creating innovative potential of company and give a multiplier effects. These effects should be taken into account in the process of creating and strategy of innovation. The author presents a diagram of creating a innovative strategy, the direct and indirect effects of innovative activity and the cause and effect relations between the results of innovative activity and the creation of a strong competitive position of the company. The article is aimed at enterprise managers, decision makers of state institutions and scientists dealing with innovation problems.