Strategy Implementation Effectiveness in M alaysian Fertilizer Industry: A Conceptual Paper Ref.[12] state that exp loitation focuses on increasing the
productivity and effic iency of capita l and assets through standardizat ion, systematic cost reductions, and improve me
nts to existing technologies, skills, and capabilities. According to ref.[13], they defined the explo itation fit as
the extent to which task and partner-related characteristics pertaining to the ab ility to e ffective ly ma rket products align
with e xp lic it alliance formation motives to leverage e xisting products and sell the m in new ma rkets. Thus, e xplo itation is
less tacit and more e xp lic it than explo ration[10]. The e xploitation re inforce current institutionalized lea rning and
are intended to respond to the current environmental conditions by adapting existing technologies and further
meet ing the needs of e xisting customers[14].
Exp lo itation involves the development of new knowledge about the firms e xisting ma rkets, products, and abilities,
while e xplorat ion entails the cha llenge of e xisting ideas and the development of new knowledge about new ma rkets,
products, technologies, and skills[7, 15]. Explo itation is based on intensive search, which means e xperimentation
along an existing knowledge dimension[16].
Ref.[17] suggest that explo itation has two distinct phases, which are use and development of things that already know
or e xist. They define development as the expansion of the firm’s current stock of knowledge while the term use as the
appropriation of economic returns of the current stock of knowledge. Explo itation provides effic ient solutions and
supports current organizational viability through near and clear returns[18].
A typical exa mp le of e xp loitation entails the use of economies of scale; to benefit from such explo itation, firms
must emp loy modernizat ion and automatic production processes, along with effic ient capacity utilizat ion[19].
Therefore, e xp loitation relies on cumulative learn ing, and future behaviour does not deviate much fro m the firms past
trajectory[10].
2.2. Market Expl or ation
Exp lorat ion is defined as the experimentation which is using new alternatives having returns that are uncertain,
distant and often negative[7]. The e xplorat ion involves investing resources with the aim of acquiring entire ly new
knowledge, skills and processes[20]. It is also related to the
ground breaking improvisation, e me rging markets and technologies. It is motivated by a desire to discover
something new[5]. The capability of an organizat ion to learn through
questioning, pushing the knowledge frontie r, and engaging in proactivity and risk taking can be represented by the
ma rket e xp loration. Fo r instance, the activities such as concept testing, discovery, creative deconstruction and
research and development RD are consistent with e xploration[21, 22].
Exp loratory invention requires distant search and a departure fro m the firm’s store of current skills and
capabilit ies[23]. According to ref.[24], e xp loratory innovative competence represents the ability to perform
e xtensive searches that result in novel methods or materia lstechnologically distant fro m e xisting innovations.
Exp lo itation provides efficient solutions and supports current organizational v iability through near and clear
returns[18].
Exp lorat ion enables new p roduct development NPD teams to continually uncover new ma rkets and develop
technology and ideas that challenge the existing cause–effect relationships, thereby resulting in innovative products with
unique benefits[9]. By provid ing new insights into the design of new features and benefits in a product, e xp loration ensures
that the new product will contain eme rgent ideas. These may diffe rentiate the product fro m what co mpetitors offer and
thus be judged superior by customers[25].
2.3. Combinati on between Expl oitati on and Expl oration
Fro m the generation of new ideas through to the launch of a new product, e xplorat ion and e xp loitation play a v ital ro le
in product innovation. the capabilit ies needed for exp loration and explo itation are closely connected[26] even at different
organizational leve ls[27].
Ref.[28] have investigated the balance between e xplorati on and exploitation and the impact on organizat ional
performance and conclude that it depends on whether the two concepts are v iewed as mutually opposing or
comple mentary.
To take advantage of their e xploratory and e xp lo itative competences in new product inroduction, co mpanies should
carefully e xa mine the d iffe rences between these two competences and the particular situation under wh ich each
can be more or less effective to develop a successful new product[3].
The challenge confronting an organization is ‘‘to engage in sufficient e xplo itation to ensure its current viability and, at
the same time , to devote enough energy to exploration to ensure its future viab ility’’[29]. The returns of e xp loitation
tend to be more certain and proximate, whereas those of e xploration a re mo re variab le and d istant in time . External
industry forces also generally give rise to one or the other or perhaps both[30-32].
Ref.[13] study maintains that exp loration and e xplo itation are separate though not necessarily antithetical strategies
with d iffe rent antecedents and performance consequences. However, certain co mbinations of task- and partner-related
characteristics like ly fit an e xp loitation or e xp loration mot ive better[33]. For e xa mp le, a partner with comp le mentary
technological skills and e xperience in their application can effectively e xp lore the potential for ne w innovations and
learning, wh ich should produce upstream performance outcomes such as product enhancements[26].
Prior research has documented the role of exp loitative and e xplorative capabilities in firm success[9, 34]. Product
development and market-related e xplo itative and explo rative capabilit ies are viewed as the value creating mechanisms
through which entrepreneuria l o rientation EO affects
performance in e xport ma rkets[35]. Exp lorat ion and e xplo itation imp ly specific decision and
adoption processes that involve different levels of risk and amb iguity[16]. Exp loitation provides effic ient solutions and
supports current organizational viability through near and clear returns. Ho wever, e xp loration improves the ability to
adapt to a changing environment because it increases the variance of organizational activit ies[18].
Exp lo itation and e xplorat ion theory was e xp lic itly discussed by ref.[7]. A tension between exp loration and
e xploitation e xists because the explo itation generates clearer, earlier and closer feedback than e xplorat ion. The
e xploitation drives out explo ration due to clearer, mo re temporally pro ximate, and greater financia l feedback, the
same argu ment may apply for development and use[36].
2.4. Market Strategy
