Introduction
Nowadays it is extremely difficult to find islets that were not affected by the global trends in the world economy. One of the aspects of the latter is extremely tangled and constantly changing business environment in which international as well as local companies find themselves competing against each other and for the customers. The well-balanced strategies based on thoroughly constructed static models of the market are not considered dominant anymore and are being replaced with aim to achieve strategic flexibility (1106_market focused strategic flexibility) and capabilities of matching the volatile signals of the market.
The essay explores the meaning of market sensing and learning strategy as a competitive advantage according to capabilities-based theory and their role in the organizational effectiveness. To facilitate the understanding of the complex issue I will try to dissect the strategy of market sensing from that of market learning. In the first part the question of internalization, dissemination, usage and unlearning the information about the market will be discussed. The second part will dwell upon the question of recognizing future developments of the market and turning them into competitive strategic advantage. Ultimately the aforementioned parts will be put into context of organizational performance where they will be analyzed as an attribute of organizational effectiveness.
Market learning strategy
According to the Britannica Concise Encyclopedia learning is “a process of acquiring modifications in existing knowledge, skills, habits, or tendencies through experience, practice, or exercise”. (http://www.answers.com/topic/learning) Principally the same definition could easily be applied to organizational entity as it includes the generalized idea of learning, however, it is still possible to refine it for the purpose of this essay. The capabilities-based theory suggests that the distinction to resource-based strategy should be underlined as simple acquisition of new information or knowledge does not classify as capability as they could be considered a resource (exploring the role of market learning capability), hence the combination or application of this information in a special way is important (capability). Furthermore Day points out that collective learning has different nature as individual learning: the results of this process in organization go far beyond individual knowledge and could be found in intra-organizational processes such as routines and procedures. It should also been taken into account that the potential influence of the knowledge relates to the hierarchical position of it initiate and the hierarchical structure of the organization. Consequently “learning” in terms of this essay can be defined as the process of acquiring modifications in existing knowledge of exploration and exploitation of resources by the persons of consequences in the organization.
Pursuing market learning strategy, companies develop their sustainable competitive advantages around their learning capability. The impact of this strategy on the performance on the market corresponds to the relative superiority of the capabilities and complexity to match it. (day the second one) The principle idea of the market learning strategy is to gain better market understanding than the competitors using basically similar information resources and methods. Easy as this may sound, it takes a long time for the companies to advance their learning capabilities. It is being argued nowadays that process of organizational learning includes four stages: acquisition, dissemination, utilization of information (Day) and unlearning (Unlearning web-page). Development of information technologies and market research methods provided companies with a big variety of tools to gather information. The demand in specific information for the problem in question dictates the necessity to employ certain instruments of the research. Crucial on this stage is to be able to recognize implications of the used methods such as richness of information, costs, covert threats of misunderstanding etc. The combination of different approaches may improve information quality and help better interpreting the results. The second stage ensures that knowledge will be dispersed across the organization and will be available to the relevant employees. Aiming at gaining strategic advantages in this stage involves application of organizational theories.