The technological acquisitions paradox in the beauty industry

Purpose: We address the following research questions: (1) Is the innovation trajectory of the acquirer affected by previous acquisitions? (2) In which direction knowledge recombination from the acquisition is pushed further? (3) Is the technological acquisition more a means for knowledge exploration and radical innovation or, on the contrary, a way for consolidating previous technological specialization? Design/methodology/approach: The nature of this study is exploratory; therefore, we opted for an inductive approach based on the L'Oréal case study analysis. Data were triangulated from different sources: (a) the L'Oréal website and press releases collected in the 2009–2015 period; (b) journal articles and books on the global cosmetics industry and the insightful work of Jones (2010); (c) the Questel Orbit database containing data on patents; and (d) the Zephyr – Bureau van Dijk database containing information on the acquisitions of firms. Findings: Empirical evidence from a patent data analysis reveals a paradoxical path. On the one hand, acquisitions enable the company to explore new technological spaces; on the other hand, they allow it to reinforce a preexisting technological trajectory, even when the knowledge base of the target is distant from that of the acquirer. Thus, in our case study, the absorption and recombination of knowledge from a variety of domains support specialization more than diversification technology strategies. Originality/value: We add to innovation management literature a new perspective, by offering a detailed analysis, through patent data, of the knowledge recombination process, led by technological acquisitions.