Nonlinear and complementary effects of responsive and proactive market orientation on firms’ competitive advantage

Abstract

Purpose The purpose of this paper is to clarify how responsive market orientation (RMO) and proactive market orientation (PMO) create competitive advantage. Design/methodology/approach Nonlinear and interaction effects are tested by applying hierarchical regression analysis to a sample of 272 Colombian manufacturing companies. Findings The results show that although market orientation promotes the competitive advantage of a business, both approaches – responsive and proactive – exhibit saturation effects and a positive interaction. Research limitations/implications The main limitation of this study is the cross-sectional design and the use of a single source for data collection. It is suggested that future research includes different orientations combined with these two market orientations – responsive and proactive – for achieving competitive advantage. In addition, further studies could replicate this analysis for different environmental conditions. Originality/value This paper simultaneously evaluates the nonlinear and complementary effects of RMO and PMO. From a strategic standpoint, it presents an empirical confirmation of the familiarity trap, the failure trap and the positive effects of combining RMO and PMO.

The incompatibility of proactive market orientation and postponement strategy in product differentiation

“…To fill this research gap, we introduced the concept of postponement as a basic logistics strategy, presently deployed by many firms, and examined the interaction effect of PMO and postponement on new product differentiation. Previous studies have examined the correlations of PMO and performance, focusing mainly on high-tech industries (Cai et al, 2015;Lamore et al, 2013;Li et al, 2008;Ozdemir et al, 2017;Tinoco et al, 2020;Yannopoulos et al, 2012). However, our results show that PMO is one of the leading drivers of product differentiation, even in the low-tech apparel industry.…”

“…Previous studies have examined the correlations of PMO and performance, focusing mainly on high-tech industries (Cai et al , 2015; Lamore et al , 2013; Li et al , 2008; Ozdemir et al , 2017; Tinoco et al , 2020; Yannopoulos et al , 2012). However, our results show that PMO is one of the leading drivers of product differentiation, even in the low-tech apparel industry.…”

Managing the product innovations paradox: the individual and synergistic role of the firm inside-out and outside-in marketing capability

“…Following the recommendations of marketing and innovation researchers, we performed hierarchical multiple regression analysis in SPSS for examining the linear and non-linear (He and Wong, 2004; Wei et al , 2014) and synergistic (Atuahene-Gima et al , 2005; Balboni et al , 2019; Osorio Tinoco et al , 2019) relationships between study variables. We introduced controls, linear, non-linear (squared) and synergistic effect terms (interaction) in a stepwise procedure to assess their relative contribution and the variances explained (Cao et al , 2009; Chen et al , 2017; Wei et al , 2014).…”

“…Considering these debates regarding the exact relationship of firm IOM and OIM with IPI and RPI in the literature, some recent studies suggest that a firm should employ a total market orientation approach that integrates both inside and outside-in processes (Baker and Sinkula, 2005; Herhausen, 2016; Li et al , 2008). A key perception in the recent literature is that the interaction of inside-out and outside-in processes may overcome the deficiencies and help develop both IPI and RPI (Atuahene-Gima et al , 2005; Herhausen, 2016; Osorio Tinoco et al , 2019). Similarly, scholars are also calling for investigating the synergistic role of the IOM and OIM in the firm's market adaptation (Ali et al , 2021; Asseraf and Shoham, 2019; Day, 2020; Hunt and Madhavaram, 2020; Musarra and Morgan, 2020; Quach et al , 2020).…”

Breaking away from servitization paradox to improve manufacturing enterprises' service innovation performance: the roles of market orientation and service supply chain dynamic capability

“…Through this series of resource integration activities, enterprises can have a stronger core resource system, which can assist them to establish and consolidate core competitive advantages and bring higher service benefits (Ma et al, 2018). In addition, those enterprises who adopt market-oriented strategies can timely find out the resource and environment situations that they do not adapt to the changes and development of existing resources, technologies, service processes and contents, which can help them to achieve timely innovation of internal capabilities by changing their management concepts (Osorio Tinoco et al, 2019), making them correct their relationships with external stakeholders in service processes, structures and content, thus forming a service innovation mode that adapts to the changes in the external environment, to stimulate the continuous growth of service innovation performance (Bojesson and Fundin, 2020). revealed the mediator effect of dynamic capabilities on the relationship between market orientation and SME performance.…”