The influence of market orientation on innovation strategies

Abstract

Purpose – The purpose of this paper is to examine the effects of market orientation on exploratory and exploitative innovation, and the moderating effects of family ownership on these relationships. Design/methodology/approach – This study utilizes multi-group path analysis and confirmatory factor analysis in LISREL on data from 228 firms in the Australian service sector. Findings – This study establishes that both customer and competitor innovation are positively related to exploitative and exploratory innovation. However, customer orientation does not lead to significantly stronger effects on exploitative innovation than on exploratory innovation, and competitor orientation does not lead to significantly stronger effects on exploratory innovation than on exploitative innovation. In addition, the study found that the relationship between customer orientation and exploratory innovation was stronger for family firms, while the relationships between competitor orientation and both exploratory and exploitative innovation were stronger for non-family firms. Research limitations/implications – The cross-sectional design is one weakness of this study. In addition, as firms in the present study came from the service sector the generalizability of the findings to other sectors of the economy need to be determined. Practical implications – These findings of this study highlight the need for managers to build a strong market orientation in order to promote innovation, and consider the effects of ownership structure on innovation strategies. Originality/value – This study is the first to measure the relative influence of customer and competitor orientation on a firm’s use of exploitative and exploratory innovation strategies.

Innovation in Family Firms: A Systematic Literature Review and Guidance for Future Research

“…Newman et al . (), relying on a totally different perspective, namely, market orientation, analyse the relationship between customer/competitor orientation and exploratory and exploitative innovation, considering the moderation effect of family ownership. Their results show that both customer and competitor orientation are positively related to innovation, and in particular, customer orientation is related to exploratory innovation in FFs, while competitor orientation is associated with both exploratory and exploitative innovation in non‐FFs.…”

Manajemen Strategik Dengan Orientasi Pasar Dan Orientasi Belajar Pada Kinerja Inovasi Rumah Batik Bahalap

“…Beberapa penelitian dari kemampuan pelaku usaha untuk meningkatkan inovasi ialah dengan orientasi belajar sehingga dapat lebih cepat membaca situasi sekarang dan akan datang untuk meningkatkan kinerja inovasi dengan tiga ukuran (proses inovasi,produk inovasi dan inovasi pemasaran produk) (Chang, Bai, & Li, 2015;Haryanto, 2017). Orientasi pasar yang baik dalam kinerja adalah dasar pelaku usaha dalam identifikasi target pasar, segmen pasar dan posisi produk dalam pasar, dan sebagai ukuran indikatornya adalah orientasi pelanggan, orientasi pesaing dan koordinasi kinerja (Kristinae V, 2019;Newman, 2016). Parkman, Holloway, and Sebastiao (2012) menyatakan bahwa kemampuan inovasi dari perusahaan yang tergolong industri kreatif mampu secara positif dan signifikan berpengaruh terhadap keberhasilan suatu produk yang dihasilkan.…”

The role of Market Orientation and Innovation in Improving Business Performance of the Banking Industry

“…Innovation ability is the most important determinant of performance [17]. The market orientation is known as a degree for the organization to access and use information from its customers as well as to develop and implement a strategy that meets the needs and aspirations of its customers [13]. Strong market orientation along with strengthening the efforts to deliver higher value to the customer will result in a competitive advantage and profitability over competitors.…”