Managers frequently make decisions regarding both the formulation and the implementation of strategies, in a diversity of domains such as new product development, pricing and product positioning, and marketing campaigns. When doing so, they have to balance an exploration process, of search, experimentation and innovation, with an exploitation process of refinement, selection and implementation of one strategy. Either searching too much for the best strategy or committing too fast to a strategy that may not be optimal can lead to reduced profitability.
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