Copied Balancing Exploitation and Exploration
Balancing Exploitation and Exploration
Within the last decades, an interesting economic phenomenon can be observed in many industries across the globe: companies that for many years had dominated their respective segments misjudged the potential of a new technology and, in consequence, missed an important innovation frequently resulting in fatal economic consequences. Just to give one example: KODAK lost its dominating position as it decided far too late to invest in digital photography, a radical innovation that completely changed the photo industry. Interestingly, like many other companies that have been subject to this phenomenon Kodak was considered to be excellently management and to possess well-designed customer processes. However, the factors driving the prosperity of an industry incumbent may at the same time trigger its economic decline. Contrary to "hungry" companies that believe disruptive innovations to be their opportunity to - shuffle the cards of the game, market leaders often seem to face serious difficulties in capitalizing on radical innovations.
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