ZhouYimTse2005JM

Does market orientation impede breakthrough innovation? To date, researchers have presented opposing arguments with respect to this important issue. To address this controversy, the authors conceptualize and empirically test a model that links different types of strategic orientations and market forces, through organizational learning, to breakthrough innovations and firm performance. The results show that a market orientation facilitates innovations that use advanced technology and offer greater benefits to mainstream customers (i.e., technology-based innovations) but inhibits innovations that target emerging market segments (i.e., market-based innovations). A technology orientation is beneficial to technology-based innovations but has no impact on market-based innovations, and an entrepreneurial orientation facilitates both types of breakthroughs. Different market forces (demand uncertainty, technology turbulence, and competitive intensity) exert significant influence on technology- and market-based innovations, and these two types of innovations affect firm performance differently. The results have significant implications for firm strategies to facilitate product innovations and achieve competitive advantages.

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