Digitalization have force emerging markets (EMs) firms operating in resource-constrained environment to adopt market-driven strategies, particularly frugal innovation, to provide affordable, optimize processes and high-value solutions. However, understanding the mechanisms behind developing frugal innovation capability (FIC) at the firm level in diverse EMs remains limited. From the perspective of the Resource-based View, this study added to the existing body of knowledge by exploring how strategic orientation (entrepreneurial orientation (EO) and market orientation (MO)) and organizational ambidexterity (OA) impact the development of FIC in EMs. The study utilized a cross-sectional survey in data collection with 386 valid respondents from Tanzanian manufacturing firms to empirically validate our theoretical predictions. The results show that both EO and MO have strong and positive association with OA and the development of FIC in EMs. In addition, OA partially mediate the relationship of both EO and MO with the development of FIC. Furthermore, our results indicate that MO exerts a more significant impact on the development of FIC than EO in EMs. Managers of manufacturing firms in EMs can use these findings to review their strategic decisions and their exploitative and exploratory approaches to enhance supply chains, develop cost-effective technologies, and produce affordable offerings that cater to the preferences of price-conscious consumers in the digitalization age.