Just as a switch hitter for a baseball team can help it beat its rivals, marketing ambidexterity can pay off for a business – if it’s good at learning new things, say University researchers. from Calgary.
âIf a business is low on learning, in most cases it can’t really take advantage of marketing ambidexterity,â explains Dr Oleksiy Osiyevskyy, PhD’14, associate professor and academic director of the Global Business Futures Initiative at the Haskayne School of Business.
Marketing is a multi-billion dollar aspect of the business world that ranges from branding and product design to advertising and customer service. This affects everything from the packaging of your breakfast cereal to the data collected about you when you search for a product on Amazon.
âMarketing ambidexterity refers to the ability of companies to simultaneously strike a delicate balance between two different things in marketing,â explains Dr James Agarwal, PhD, professor at Haskayne. “They must exploit what they already know to be successful, but, at the same time, they must be able to explore new opportunities which, in the long run, might prove useful.”
Tension between exploitation and exploration
Agarwal and Osiyevskyy are among the co-authors of a study on the problem that was recently published in the Business Research Journal. The study found that absorptive capacity – the ability to access, assimilate, use and disseminate new knowledge within a business – is the key to reaping the benefits of marketing ambidexterity. .
Osiyevskyy compares a company’s ability to survive the vagaries of the market to the process of evolution or adaptation to an environment, describing it as navigating the tension between predictable exploitation and uncertain exploration. âOne type of adaptation is to keep doing what has always been successful in the past, which is what we call exploitation,â he says.
âThe problem is, as the market changes, the only way to learn new things and adapt to those changes is what we call exploration, which involves collecting new market information. But it does mean that the company must divert resources from exploitation to exploration, with the aim of achieving a balanced objective in order to seize new market opportunities and new sources of income. “
Such factors explain why exploration, the outcome of which is initially unpredictable and uncertain, will only improve business performance “if this new information can be understood and then disseminated throughout the organization to strike the right balance between exploitation and exploration, âexplains Osiyevskyy.
The study used a multivariate statistical model to confirm the research team’s hypothesis. It used sales and revenue data from 318 companies in the Singapore Business Survey.
‘See, there is a better way to do it ‘
âA lot of managers have a really hard time conceptualizing marketing ambidexterity,â Agarwal explains. They are tempted to compromise in favor of predictable exploitation – focusing on making it more efficient as an easy way to maximize short-term profits to appease shareholders – while minimizing uncertain exploration as profits can be. in two or three years. , he says.
âWe suggest, ‘Look, there’s a better way to do it,’ Agarwal says. âThere can be a convergence between exploitation and exploration, this is what we call the balanced approach of marketing ambidexterity.
Agarwal says the study adds weight to the evidence that marketers need to have a sits on boards of directors, rather than being largely outside the decision-making process. It also reinforces the idea that marketing involves not only reaching out to customers and other stakeholders, but also listening carefully to what they have to say, he says, adding that this is more important than ever before. because of digital technology, social media and big data.
âMarketing is the only discipline that interfaces with the market,â Agarwal explains. “It has to have a voice because what we’re really looking at here is strategic marketing as the basis of a company’s competitive advantage.”
The study was co-authored by Dr Hillbun Ho, PhD, from UTS Business School at Sydney University of Technology in Australia, and Dr Sadat Reza, PhD, from the Marketing and International Affairs Division of Nanyang Technological University in Singapore.