The Relationship Among Market Orientation,Innovation Strategies And NPD Performance:a Multi-case Study

Under the background of economic globalization, a key way to construct and cultivate a company’s competitive superiority is to constantly develop new products and services to meet market demand with continued innovation. Under the Open Innovation background, both exploration innovation and exploitation innovation are increasingly adopted by some Thai companies, especially IT companies, for different products, market demands and the state of industries to maximize short-term and long-term innovation performance. Researchers have generally concluded that market orientations do affect new product development (NPD) performance. Former research, however, has some drawbacks as follows. First of all, most of the former research has not revealed the mechanism of how two different market orientations, i.e. responsive market orientation and proactive market orientation, affect company’s NPD performance. Secondly, despite that those researchers suggest market orientations do affect company’s innovation strategy, few of them indicate the impact of two market orientations, responsive market orientation and proactive market orientation, on company’s two innovation strategies, i.e. exploration innovation strategy and exploitation innovation strategy. Also, they usually use developed countries as research models. Few developing countries were taken as samples to deeply explore the relationships among the two different market orientations, two different innovation strategies and NPD performance.To fill the research gap, by the method of multi-case study, this paper uses Thailand as a model to reveal the mechanism of how two different market orientations affect innovation strategies, and further influence NPD performance. Specifically, the problems that will be discussed are:a. How do two different market orientations, responsive market orientation and proactive market orientation, affect a company’s two different innovation strategies, i.e. exploration innovation strategy and exploitation innovation strategy?b. How do a company’s two different innovation strategies affect NPD performance?In this research, we have conducted in-depth interviews with managers from five Thai companies in different industries. Documents and data from interviews were analyzed, coded and categorized based on content. Based on the analysis, we have come up with the first-order concepts, second-order concepts and summarized to aggregate dimension. Also, we have made further progress in analyzing and coding with critical incident technique based on data information of interviewed cases, exploring relationships between variables, and proposed the theoretical model as well as assumptions of the study.To be more specific, based on the study above, we find that market orientation does affect two forms of innovation strategies, and in turn NPD performance. While responsive market orientation promotes both exploitation innovation strategy and exploration innovation strategy, proactive market orientation is only positive for exploration innovation strategy; and also, both exploration innovation strategy and exploitation innovation strategy have a positive effect on NPD performance. In other words, two forms of innovation strategies will be implemented prompted by responsive market orientation, which in turn can lead to higher NPD performance. Proactive market orientation, however, can only prompt exploration innovation strategy to NPD performance.On the theoretical side, this research indicates that market orientation affects NPD performance by way of its impact on innovation strategy. And for practical management, we have also provided tools, methods and suggestions on innovation strategy for enterprises to set up market-orientated innovation strategy.