Managing Technological Innovation Capabilities to Align Exploration and Exploitation with Technological Changes

Abstract

Firms that operate in high-velocity markets must configure and utilize diverse technological innovation capabilities (TICs). TICs provide the firm with technological strength and adaptability to manage technological changes with respect to demand changes on the customer value trajectory. In this paper, we examine the configuration of a high tech firm’s TICs involving R&D, manufacturing and marketing capabilities to develop technology exploring or market exploiting activities in response to shifts in the customer value trajectory. We analyze the cases of micro, electrical, mechanical systems (MEMS) accelerometer innovators, and identify strategic configuration of TICs that has been necessary to trace the customer value trajectory with technological changes. We further show how the stability of the customer value trajectory plays a role for the firm in market transition to configure and utilize its TICs for exploring or exploiting the market. Based on our findings, we offer a managerial decision-making framework regarding strategic management of TICs with respect to the customer value trajectory in high-velocity markets.