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Unformatted text preview: 42 / Journal of Marketing, April 2005 Journal of Marketing Vol. 69 (April 2005), 42–60 Kevin Zheng Zhou, Chi Kin (Bennett) Yim, &amp; David K. Tse The Effects of Strategic Orientations on Technology- and Market-Based Breakthrough Innovations Does market orientation impede breakthrough innovation? To date, researchers have presented opposing argu- ments 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 innova- tions 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 innova- tions, 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. Kevin Zheng Zhou is Assistant Professor of Marketing (e-mail: [email protected]), Chi Kin (Bennett) Yim is Associate Profes- sor of Marketing and Associate Director of Chinese Management Centre (e-mail: [email protected]), and David K. Tse is Chair Professor of International Marketing and Director of Chinese Management Centre (e-mail: [email protected]), School of Business, The University of Hong Kong. The study was supported by research grants from the Research Grant Council, Hong Kong SAR Government, and the Chinese Management Centre, The University of Hong Kong.The authors thank the anonymous JM reviewers for their insightful and constructive comments. They also thank Kimmy Chan and Xiaoyun Chen for their help in data collection. to serve customers’ existing needs (Hamel and Prahalad 1994). Moreover, customers do not necessarily know what they really want, because they are not completely knowl- edgeable about the latest market trends or technologies (MacDonald 1995; Von Hippel 1988). Thus, being market oriented may not provide a firm with true insight into prod- uct innovation (Frosch 1996; Leonard-Barton and Doyle 1996; Workman 1993). Therefore, firms should “ignore your customers” or “don’t listen to your customers” while pursuing breakthrough innovations (Martin 1995, p. 123; Meredith 2002 p. 59)....
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