Column 5 · Learning and Knowledge · Era 5, Assets and Accountability (2000s)
Exploration-Exploitation
Formulation, process · Major · Cluster II, Resources and Orientation
Description
They showed that market orientation enables firms to pursue exploitation and exploration marketing strategies at the same time, reducing the tradeoff between them in new product financial performance.
Managerial Implications
Firms must exploit current competences and explore new ones, and the two compete for attention and resources. Market orientation helps reconcile them by keeping exploration tied to customer needs. Managers should set explicit portfolios across the two, protect exploratory projects from quarterly metrics, and ensure exploratory learning is fed back into mainstream products. Over-exploitation is the more common failure, and it is invisible until too late.