Why competitors matter for market orientation

Abstract

Purpose-This paper aims to investigate whether it is meaningful to decompose market orientation into customer orientation and competitor orientation, and what possible implications this decomposition may have for researchers and business practitioners. Design/methodology/approach-Through a review of existing market orientation research, two of its salient dimensions, customer orientation and competitor orientation, are theoretically investigated. Then, two symmetric component measures are developed and tested on 308 manufacturing firms in a cross-sectional questionnaire survey, supplemented with census data. Findings-Empirical evidence reveals that, while competitor orientation is positively related to a firm's market share, a customer orientation is detrimental to a firm's return on assets for firms in less competitive environments. Research limitations/implications-The study advocates moving beyond "global" measures of market orientation and focusing on symmetric component measures of customer orientation and competitor orientation when investigating a firm's performance differentials. The study's cross-sectional setting limits inference about causality among the constructs. Practical implications-Customer versus competitor orientation appears to be contingent on a firm's competitive environment, which indicates that market orientation and its components are not necessarily equally relevant for firms with different strategies and in different environments. Originality/value-The paper introduces and empirically tests two novel symmetric component measures of customer orientation and competitor orientation. Academicians are provided with insights with respect to the content and symmetry of component measures of the market orientation construct and their relation to firm performance. Furthermore, business practitioners are given a more solid foundation for better allocation of resources to their customer and competitor-oriented activities.

Introducing the religio-centric positional advantage to Indonesian small businesses

“…In addition, in a religion-based market, a very close relationship between companies, especially in retail markets, enables them to lower the competition tension by cooperation in the commodity procurement. This finding is contrary to the common view that competitors' orientation, in principle, is always associated with positive performance (Narver and Slater, 1990;Kennedy et al, 2003;Sørensen, 2009). Instead, this finding supports that the opposite view competitor orientation is not a predictor of business performance, such as Mueller and Gemu¨nden (2009) and Lengler et al (2013).…”

A Conceptual Model of Knowledge Sharing and Market Orientation in the Tourism Sector

“…Firms should encourage employees to share knowledge regarding the selling practices, strengths and weaknesses of their firms' competitors (Tsiotsou, 2010;Zhou et al, 2009). Sharing this knowledge can help employees to develop appropriate products and services to against competition (Sorensen, 2009). Based on the above argument, this study develops the following proposition: knowledge sharing has a positive effect on competitor orientation.…”

“…Market-oriented firms consequently can gain desired profits (Jaworski and Kohli, 1993;Homburg and Pflesser, 2000). However, research examining the factors that determine market orientation is relatively limited in both the generic and tourism sectors (Harris, 2002;Qu et al, 2005;Zhu and Nakata, 2007) while market orientation has been widely examined as a determination of a range of organizations phenomena, such as firm performance (Agarwal et al, 2003;Greenly, 1995;Jaworski and Kohli, 1993;Sorensen, 2009;Tsiotsou, 2010), service quality (Agarwal et al, 2003), firm reputation (Matear et al, 2002), customer retention (McNaughton et al, 2001) and customer value creation (Dobni and Luffman, 2000).…”

Investigating the Relationship between Customer Knowledge Management and Knowledge Sharing among Insurance Companies in Malaysia

“…This sharing of knowledge improves employees' innovativeness and performance. Thus, firms should encourage employees to share their knowledge regarding the selling practices, strengths and weaknesses of their firm's competitors (Tsiotsou, 2010;Zhou, Brown & Dev, 2009 (Sorensen, 2009) and responsive to customers' needs (Jaworski & Kohli, 1990).…”