Strategic orientations,marketing proactivity and firm market performance

Guided by strategic orientations, firms must continuously deliver superior value in order to maintain a strong position in the market over the long-term. This study explores how two prominent strategic orientations (i.e., market and technological orientations) influence a firm's marketing proactivity and performance, with marketing proactivity being the key to delivering continuously superior value. Specifically, we examine how the cultural (i.e., a proactive market orientation) and the behavioral (i.e., market pioneering) dimensions of marketing proactivity, and the interaction between them, affects a firm's market performance. A structural equation modeling analysis of survey data from 109 firms shows that a proactive market orientation and market pioneering have a significant positive impact on the sales per employee and the growth rate of a firm. Our findings suggest that market pioneering strengthens the positive relationship between proactive market orientation and sales per employee and growth rate. A firm's technological orientation is positively related to both its proactive market orientation and market pioneering. However, the responsive market orientation of a firm only has a significant positive effect on proactive market orientation, and not on market pioneering. We discuss the theoretical and managerial implications of these findings.     

When Is Open Innovation Beneficial? The Role of Strategic Orientation

Various scholars have accomplished a great deal to better understand open innovation effectiveness. Case studies have detailed its performance effects, while other studies showed the effectiveness of an aspect of open innovation, such as collaboration with third parties, external technology commercialization, and cocreation. Though most studies report a positive relation between open innovation and innovation performance, some studies indicate possible negative effects. This has resulted in a call for research on what kind of organizational context suits open innovation best. This study therefore addresses two questions: (1) does performing open innovation activities lead to increased innovation performance, and to which aspects of innovation performance is open innovation most strongly related? (2) what is the moderating impact of various kinds of strategic orientation on the relation between open innovation and innovation performance? In this study, we investigate three types of strategic orientations: entrepreneurial orientation, market orientation, and resource orientation. In a survey among 223 Asian service firms, we first develop and test a comprehensive measurement scale for open innovation that captures the entire range of open innovation activities, including outside‐in activities, inside‐out activities, and coupled activities. The final scale comprises of 10 items and indicates to what extent a firm has implemented open innovation activities. Next, we study the relation between open innovation and innovation performance. The results indicate that performing open innovation activities is significantly and positively related to all four dimensions of innovation performance: new product/service innovativeness, new product/service success, customer performance, and financial performance. The impact of open innovation is not limited to a particular aspect of innovation performance; it positively affects a broad range of innovation performance indicators. Though open innovation is positively related to all four dimensions of innovation performance, the effect sizes are not equal. The impact on new service innovativeness and financial performance is relatively stronger. Regarding the influence of a firm's strategic orientation, we find that all significant moderation effects are positive. This suggests that, in general, having a more explicit strategic orientation enhances the effectiveness of open innovation. When comparing the three strategic orientations, entrepreneurial orientation strengthens the positive performance effects of open innovation significantly more than market orientation and resource orientation do. In turn, market orientation has a significantly stronger moderation effect than resource orientation. These findings provide empirical evidence of the context dependency of open innovation. Especially an entrepreneurial orientation, which is associated with proactive and entrepreneurial processes, seems to create a fertile setting for open innovation.     

Examining Proactive Strategic Decision‐Making Flexibility in New Product Development

While strategic flexibility is widely accepted as a prerequisite for a firm's success, its application in strategic decision making to a firm's new product development (NPD) activities is limited to only a few studies. Furthermore, many organizations still have difficulties creating proactive strategic flexibility in their decision‐making processes. Past research studies have largely ignored the relationship between strategic decision‐making flexibility and firms' resources and/or capabilities and success in the context of NPD. This study advances strategic flexibility by adopting the proactive approach of NPD decision‐making flexibility and by examining its role in translating organizational resources and capabilities into NPD success. This study draws upon the resources, capabilities (i.e., flexibility), and performance framework to show how proactive strategic decision‐making flexibility plays a crucial role in developing new products that can create new opportunities and comply with market needs. Therefore, this research aims to (1) develop an operational definition of strategic decision‐making flexibility and (2) propose a framework to understand the drivers and the subsequent new product performance outcomes of strategic decision‐making flexibility. This study adopts the proactive perspective of strategic decision‐making flexibility and defines it as a capability that enables firms to develop NPD strategies to respond to future changes in the environment. The analysis, based on data collected from 103 European firms, shows that that the effects of long‐term orientation, strategic planning, internal commitment, and innovative climate on proactive strategic decision‐making flexibility are significant. The findings indicate specifically the roles of both champions and gatekeepers, who infuse a firm's knowledge with a clear understanding of its resources, constraints, and market needs, thereby enhancing decision makers' motivation to behave proactively to precipitate transformation. The results also reveal a positive association between proactive strategic decision‐making flexibility and NPD performance outcomes. As such, strategic flexibility provides firms with an ability to adapt to changing environments and to create new market opportunities, product, and technological arenas, and to deliver successful new products. When firms open new market, technological, and product arenas, they can easily foresee their new demands and changes and successfully deliver new products, meeting customer needs/demands, and offering benefits such as quality, cost, and timeliness. This study therefore provides a valuable reference point for future research in strategic decision‐making flexibility in NPD.     

Analyzing the Effects of Market and Resource Orientations on Innovative Outcomes in Times of Turbulence*

Innovation and new product success are often a core precursor to superior performance. Although research has examined the resource‐based view (RBV) and market orientation (MO) individually, limited research has evaluated and compared their effect on innovation and new product success in one study. Furthermore, relative to MO, comparatively less research has been conducted to evaluate the relationship between organizational learning (OL) and the RBV to examine their effects on a firm's ability to innovate and succeed. The purpose of this paper is to investigate the role of environmental variables (i.e., market turbulence and technological turbulence) on the relationship between two strategic orientations and performance and to extend a previous study. Specifically, it aims to evaluate whether a focus on the customer or the firm will impact innovation, product quality, new product success, financial performance, and customer value in settings of varying environmental turbulence. Data were collected from more than 200 senior executives. LISREL was applied to evaluate the relationships under examination. Interaction effects were assessed using a nested goodness‐of‐fit strategy using a multiple‐group solution. Results depicted significant relationships between organizational learning and both resource and market orientations. Significant relationships also emerged between each strategic orientation and various performance indicators. Interaction effects were observed for market turbulence on customer value and market orientation as well as for resource orientation (RO) on innovation in times of high technological turbulence. The paper concludes with a review of theoretical and managerial implications to stimulate further debate. These results suggest that managers seeking innovation and new product success cannot afford to ignore the environment and do so at their peril. The provision of customer value is essential for positive financial performance. Thus, management needs to monitor environmental contexts so that they are able to adjust their investment in market orientation and the requisite processes that enable its implementation. Conversely, the effects of RO on performance are more robust across industry conditions, presenting an alternative avenue for management to achieve market superiority. The paper concludes with a review of theoretical and managerial implications to stimulate further debate.     

Responsive and Proactive Market Orientation and New‐Product Success*

What is the relationship between market orientation and new‐product success? This important question has not been examined adequately to date because the concept of market orientation has been measured too narrowly. The concept of market orientation implies both responsive market orientation, which addresses the expressed needs of customers, and proactive market orientation, which addresses the latent needs of customers—that is, opportunities for customer value of which the customer is unaware. In the numerous market orientation–performance studies to date, the measure of market orientation has consisted virtually entirely of behaviors related to satisfying customers' expressed needs rather than satisfying their latent needs as well. The present study extends the measurement of market orientation to match the full scope of the concept—to measure both responsive market orientation and proactive market orientation. Using data from a sample of technologically diverse businesses, the present study develops a measure of proactive market orientation, refines the extant measure of responsive market orientation, and analyzes the relationship of a business's responsive and proactive market orientation to its new‐product success. The study findings imply that for any business to create and to sustain new‐product success, a responsive market orientation is not sufficient and, thus, that a proactive market orientation plays a very important positive role in a business's new‐product success. These findings make intuitive sense. For if in developing its new products a business relies solely on what customers state as their new product needs, the business is very vulnerable economically. Such a business is vulnerable not only for relying on customers' best guesses for new products, many or most of which may have little long‐term economic value for either party, but also to competitors' parallel new product responses and the inevitable resulting price competition. A business that relies solely on customers' expressed needs to develop its new products creates no new insights into value‐adding opportunities for the customer and thereby creates little or no customer dependence and foundation for customer loyalty. The important role for proactive market orientation in new‐product success is intuitively obvious—and is supported empirically in this study.     

The Interplay of Customer and Product Innovation Dynamics: An Exploratory Study

The challenges of successfully developing radical or really new products have received considerable attention from a variety of marketing, strategic, and organizational perspectives. Previous research has stressed the importance of a market‐driven customer orientation, the resolution of market and technological uncertainty, and organizational processes such as cross‐functional teams and organizational learning. However, several fundamental issues have not been addressed. From a customer's perspective, a more innovative product tends to have uncertain benefits and requires customers to learn new behaviors. Customer preferences can, therefore, change as product experience and learning increase. From a firm's perspective, it is unclear how to be customer‐oriented under such dynamic preferences, and product strategies using evolving technologies will tend to interact with how customers learn about an innovation. This research focuses on identifying unresolved issues about these customer and product innovation dynamics. A conceptual framework and series of propositions are presented that relate both changing technology and customer learning to a firm's strategic decisions in developing and launching really new products. The framework is based on in‐depth interviews with high‐tech product managers across several sectors, focusing on the business‐to‐business context. The propositions resulting from the framework highlight the need to consider relevant customer dynamics as integral to a firm's product innovation process. Successful innovation strategies and future research challenges are discussed, and applications to better understanding customer needs and theories of disruptive innovation are examined. Several key insights for innovation success hinge on a broad, downstream orientation to customer needs and product innovation dynamics. To be effective innovators, firms must know their customers' customers and competitors as well as or better than their immediate customers do. Market research must extend downstream for a comprehensive understanding of customer needs dynamics. In the context of disruptive innovation, new dimensions of customer needs may become more valuable based on perceived downstream customer trends. Firms may also innovate on secondary needs because mainstream customers do not always give firms the design freedom to radically innovate on primary features. Understanding customer commitments and how they develop under evolving needs can help firms focus resources on innovative efforts more likely to be accepted by customers.     

Strategies of Innovation and Imitation of Product Languages*

Nowadays, design is recognized as a strategic resource. Customers are increasingly paying attention to the aesthetic, symbolic, and emotional value of products, a value that is conveyed by the design language—that is, the combination of signs (e.g., form, colors, materials) that gives meaning to a product. As a consequence firms are devoting increasing efforts to define a proper strategy for the design language of their products. An empirical analysis was conducted on the product language strategies in the Italian furniture industry; in particular, the present article explores the relationship between innovation and variety of product languages. Companies are usually faced by two major strategic decisions. The first one concerns the innovation of product languages: To what extent should a firm proactively propose new design languages or, rather, should adopt a reactive strategy by rapidly adopting new languages as they emerge in the market? The second decision concerns the variety and heterogeneity of languages in their product range. Should a firm propose a single product language to communicate a precise identity, or should it explore different product languages? Of course, the two strategic decisions—innovativeness and variety of product languages—are closed connected. Analyzing more than 2.000 products launched by 210 firms, the present article explores how the variety of product languages is approached in the strategy of innovators and imitators. The empirical results illustrate an inverse relationship between innovativeness and heterogeneity of product signs and languages. Contrary to what is expected, innovators have lower heterogeneity of product languages. They tend to be strongly proactive and limit experimentations of new languages in the market. Imitators, instead—which would be expected to have low variety since they can invest only in languages that have been proven successful in the market—tend on the contrary to have higher product variety. Eventually, by having lower investments in research on trends of sociocultural models, they miss the capability to interpret the complex evolution of products signs and languages in the market. Strategic decisions on innovativeness and variety of product languages are therefore interrelated; counterintuitively companies should carefully analyze these decisions jointly.     

How Do Interaction Activities among Customers and between Customers and Firms Influence Market Performance and Continuous Product Innovation? An Empirical Investigation of the Mobile Application Market

Mobile application markets (MAMs) significantly differ from other existing marketplaces at least in two aspects. First, customers (app users) and firms (app providers) frequently interact with each other in real time, which is not common in the conventional marketplaces. Second, many app providers incorporate customers’ opinions or suggestions into their software upgrades, representing one of the most unique and interesting aspects of MAMs. Therefore, it has become critical to understand the impact of interaction activities not only among customers, but also between customers and firms on the market performances of new products in MAMs. One of the most significant issues firms face is whether firms reflect on customers’ postpurchase interaction activities, and the next interesting question is how firms respond to them. This study explores the effects of customer‐to‐customer (C2C), customer‐to‐firm, and firm‐to‐customer interaction activities on market performance. In addition, this study investigates how communication activities influence a firm's tendency to pursue continuous product innovation through research and development (R&D). Using data obtained from a major MAM, T store, three models that are respectively related to product sales, product lifetime, and a firm's R&D activity for product upgrades, are applied to empirically test hypotheses concerning the effects of interaction activities. In our analyses of market performance, a hierarchical log regression model with 10,840 weekly transactions data set related to product sales (model A) and 291 aggregate transactions related to product lifetime (model B) is used. Results indicate that C2C and customer‐to‐firm communication activities have a positive impact on sales, but little relationship with product lifetime. However, a firm's continuous product R&D has a positive impact on both sales and lifetime performance. Our analysis of a firm's R&D (model C) shows that C2C and customer–firm communication increases a firm's R&D activity. Taken together, these results have important implications for customer–firm interactions, market performance, and R&D strategies.     

What Are the Effective Strategic Orientations for New Product Success under Different Environments? An Empirical Study of Chinese Businesses

Innovation is an organization's spanning process that must continually change in response to, and in anticipation of, changing business environments. Research in the fields of marketing and management has examined individual strategic orientations (SOs) (such as market orientation) and their relationship to innovation performance. Few studies, however, have compared the effectiveness of different SOs for innovation performance in a single study. It is also not clear from previous research whether the business environment influences the effectiveness of the SOs. The objective of this paper is therefore twofold: it aims to evaluate (1) whether a focus on the customer, the technology, the competitor, or the interfunctional coordination, will have the greatest impact on new product success, and (2) whether the effectiveness of a specific SO varies with the environment. Data were collected from more than 500 senior executives in a wide range of manufacturing and service firms in China. Using cluster analysis and an ordinary least squares (OLS) regression model, which are commonly adopted to examine the effects of environments on the relationship between strategy and performance, we identified four subgroups of firms facing distinctively different market and competitive environments. As predicted, the results show that all four SOs have (albeit to a different degree) a significant and positive relationship with innovation performance. More importantly, the results point to the relative advantage in pursuing a specific SO by taking into account its effect under different environments and the effects of other SOs. However, the particularly strong effect of technology orientation compared to that of the other SOs on new product performance across all clusters is somewhat surprising. We offer some tentative explanations for this finding, though further research will be required to fully understand it. Overall, our findings indicate the need for managers to be responsive to environmental contexts and to allocate resources to pursue the effective (hence appropriate) strategic orientations for the specific context.     

Toward greater understanding of market orientation and the resource‐based view

Connor's commentary offers a series of thoughtful comments on the ideas presented in Hult, Ketchen, and Slater (2005). We focus on two of his contentions in our response. First, we argue that the theory underlying our study—the resource‐based view—is not tautological. This is because resources and performance are not directly related. Instead, realizing the potential value of resources depends on those resources being exploited through a firm's strategic actions. Second, we disagree with Connor's contention that market‐oriented and customer‐led firms lie along a continuum. We propose a richer conceptualization centered on a two‐by‐two matrix that contains market‐oriented firms, customer‐led firms, and two additional types. Copyright © 2007 John Wiley & Sons, Ltd.     

Market Orientation and Innovativeness in Supply Chains: Supplier's Impact on Customer Satisfaction

As today's firms increasingly outsource their noncore activities, they not only have to manage their own resources and capabilities, but they are ever more dependent on the resources and capabilities of supplying firms to respond to customer needs. This paper explicitly examines whether and how firms and suppliers, who are both oriented to the same customer market, enable innovativeness in their supply chains and deliver value to their joint customer. We will call this customer of the focal firm the “end user.” The authors take a resource‐dependence perspective to hypothesize how suppliers' end‐user orientation and innovativeness influence downstream activities at the focal firm and end‐user satisfaction. The resource dependence theory looks typically beyond the boundaries of an individual firm for explaining firm success: firms need to satisfy customer demands to survive and depend on other parties such as their suppliers to achieve customer satisfaction. Accordingly, the research design focuses on three parties along a supply chain: the focal firm, a supplier, and a customer of the focal firm (end user). The results drawn from a survey of 88 matched chains suggest the following. First, customer satisfaction is driven by focal firms' innovativeness. A focal firm's innovativeness depends, on the one hand, on a focal firm's market orientation and, on the other hand, on its suppliers’ innovativeness. Second, no relationship could be established between a focal firm's market orientation and a supplier's end‐user orientation. Market orientation typically has within‐firm effects, while innovativeness has impact beyond the boundaries of the firm. These results suggest that firms create value for their customer through internal market orientation efforts and external suppliers' innovativeness.     

Brand innovation and social media: Knowledge acquisition from social media,market orientation,and the moderating role of social media strategic capability

The study examines the relationships between knowledge acquisition from social media, two forms of market orientation (proactive and reactive), social media strategic capability, and brand innovation strategy in the context of China's online technology industry. Analysis of 357 online technology ventures, created during the past 6 years, suggests that brand innovation is affected by both knowledge acquisition from social media and market orientation. Social media strategic capability positively affects brand innovation and acts as a moderator between knowledge acquisition, market orientation, and brand innovation. It further enhances both types of market orientations in achieving brand innovation, suggesting that on social media, customer's needs, both expressed and latent (or unexpressed), can be identified more comprehensively than that of the traditional setting. Hence, the context of social media provides a different set of rules for competition and strategic behavior, in which online technology ventures should note. Implications are useful to improve the current understanding of social media brand innovation strategy, here in China's dynamic social media scene.     

Entrepreneurship: Its relationship with market orientation and learning orientation and as antecedents to innovation and customer value

This paper seeks to address two main problems. First, it evaluates the direct effect of entrepreneurship and business orientations namely, learning orientation, integrated market orientation and human resource practices on innovation and customer value. Second, it examines the interaction effect of entrepreneurship and business orientations on innovation and customer value. Data were collected from small and medium-size hotels in Indonesia and analysed using the structural equation model. The results show that entrepreneurship and human resource management were shown to be the most significant drivers of innovation and customer value. The results further suggest that interaction of entrepreneurship and integrated market orientation as well as human resource practices has significant impact on customer value and innovation respectively. Theoretical and practical implications of the study are discussed.     

Antecedents and consequences of the strategic orientations in new product development: The case of Chinese manufacturers

The objective of the present study is to advance the understanding of the role of the strategic orientation of the firm for successful new product development (NPD), in the context of Chinese manufacturing firms. Through field research accompanied by a review of the related literature, this study identifies customer orientation and technology orientation as crucial strategic components that are important to successful new product development. This research proposes a conceptual model of strategic orientations, in which firm-internal (organizational support) and -external (environmental turbulence) factors are expected to influence strategic orientations, which, in turn, impact NPD performance. The model is tested using data collected from a large-scale survey of 232 manufacturing firms in China. The results largely support the hypotheses derived from the conceptual model. First, organizational support and environmental turbulence have a positive influence on the implementation of strategic orientations. Second, the two strategic orientations show a different pattern of performance implications.     

Across the threshold: Role of performance and compatibility in innovative new products' market penetration

Both academicians and practitioners agree that there exists a critical threshold to cross for an innovative new product to be able to achieve ultimate market penetration. In this article, the authors characterize the threshold as depending upon innovation characteristics: performance and compatibility, in particular. Based on the insights from evolutionary games, several numerical simulations are conducted to investigate how the critical threshold changes as each parameter representing the innovation characteristics undergoes a change. The analysis results confirm that relative advantage and compatibility are of critical influence in impacting the threshold and thus the successful market entry. Moreover, the effect size was different depending on the size of the firm's proprietary customer base. Based on the findings, discussion on new product design strategies for companies having different market positions (i.e., new start-up firms, established firms, and incumbent market leaders) is provided.     

Seller–Buyer Interactions During the Commercialization of Technological Process Innovations

For buyers and sellers alike, high-tech process innovations can be a double-edged sword. On the one hand, technological process innovations (e.g., computer hardware and software, factory automation equipment) offer buyers the potential for reduced production costs and enhanced product quality. However, early adoption of such innovations is often a risky proposition. For the seller, successful commercialization requires stimulating not only adoption, but also successful implementation of the innovation. In other words, effective management of seller—buyer relations during the development and commercialization process go a long way toward determining the success of a high-tech process innovation. Gerard A. Athaide, Patricia W. Meyers, and David L. Wilemon examine the relationship marketing activities employed by successful sellers of high-tech process innovations. They identify eight strategic marketing objectives that underlie these relationship marketing activities: product customization, information gathering on product performance, product education and training, ongoing product support, proactive political involvement (to encourage support for the innovation from the various affected parties in the buyer's organization), product demonstration and trial, real-time problem-solving assistance, and clarification of the product's relative advantage. Their findings suggest that successful sellers engage in relationship marketing activities throughout all phases of the commercialization process. Rather than simply trying to close a deal, these firms seek active involvement from potential customers, ranging from codesigning of products to seeking feedback on product-related problems or desired modifications. This broader scope of customer involvement necessitates cooperation among various groups in the seller's organization. Product development and engineering work closely with the customer during product customization. Those groups must communicate effectively with the salespeople who demonstrate the product and with the customer support people who obtain feedback and provide real-time problem-solving support. In other words, these relationship marketing activities cut across functional barriers. Consequently, a clear understanding of the buyer's needs and environment is essential throughout the seller's organization, not just in the sales and marketing departments.     

Impact of Strategic Type on Success Measures for Product Development Projects*

Does the strategic type of firm affect which success measures should be used for product development (PD) projects? This paper theorizes that it should and finds that it does because the PD projects undertaken are usually an expression of the strategic type of the firm. The purpose of this research is to affirm a 1996 survey of members of the Product Development & Management Association (PDMA) that proposes that firms' PD performance measures should vary by their strategic type. Thus, for example, prospectors, the strategic type most likely to introduce new products to new markets, should place greater importance on PD success measures consistent with their characteristic strategies of changing product lines and early market entry. In contrast, defenders, the strategic type most likely to maintain stable product lines for existing markets, should place greater importance on PD success measures consistent with their characteristic strategies of stable product lines and market penetration. Analyzers, a hybrid type between prospectors and defenders, should prefer measures consistent with their characteristic strategies for improving products and being early followers in newer markets. To relate strategic types to specific success measures for PD projects, this paper proposes a model of the relationship based on the degree of project newness to the firm and then catalogs measures of PD project success and groups them according to degree of project newness. The research findings are based on survey responses from 222 individuals who are employed by financial service providers, who identified their firms by strategic type and rated the importance of PD success measures to their firms. The importance of 21 performance measures is compared by strategic type to find significant differences among prospectors, analyzers, and defenders. This research finds several significant relationships. prospectors, for example, attach greater importance to customer satisfaction, launch timeliness, and product return on investment, all of which may be characterized as relating to a higher degree of project newness to the firm. defenders and analyzers, on the other hand, attach more importance than prospectors to measures of unit volume, cost reduction, and margin goals, all of which relate to a lower degree of project newness to the firm. In short, because prospectors seek to introduce new products to new markets, they consider important those measures, which accord with greater product and market newness. The major conclusion of this paper is that strategic type affects the importance of project performance measures and that all firms should not use the same success measures. Firms should contextualize their success in PD projects based on their strategic type. This conclusion resonates with previous findings that strategy is a key determinant of PD success, though it is infrequently included in PD success studies. This paper, therefore, challenges the implicit assumption in the mainstream of PD success literature that success can be determined without regard to firm strategy.     

Strategic Mutual Learning Between Producing and Buying Firms During Product Innovation

The product innovation activities and strategies employed by successful innovators often differ from those used by firms having more mature products. Marketing strategies for innovating firms can vary along two dimensions of knowledge: technological development (stable and evolving) and market needs (known and emerging). In addition, producers often commit to forms of strategic relationships with their buyers because of the difficulties encountered when buying firms adopt and implement technological innovations. Starting with these two orienting constructs from the literature, Patricia Meyers and Gerard Athaide describe the kinds of learning that develop between producers and buyers when markets for a technological innovation are forming.     

Proactive/Responsive Market Orientation and Marketing—Research and Development Integration

The level of integration between the marketing and research and development (R&D) functions may be gauged by degree of communication, information sharing, and collaboration between the functions during the new product development process. This article examines how a firm's strategic choice regarding market orientation may influence the relationship between marketing and R&D personnel, and how this relationship may affect organizational success. Under examination are both the responsive form of market orientation, in which a firm focuses on immediate customer needs and tends to be market driven, and the proactive form, in which the firm focuses on future market needs and tends to be invention driven. It is theorized that responsive market orientation will be more positively related to marketing‐R&D integration due to the market‐driven nature of the orientation. Conversely, it is theorized proactive market orientation will be more positively related to organizational success than responsive market orientation due to the innovation‐driven nature of the orientation. The study was implemented via a Web‐based survey and data analysis was performed using structural equation modeling techniques. The results of this study provide empirical evidence that both proactive and responsive market orientation exhibit a positive relationship with marketing–R&D integration, indicating that both forms of market orientation may lead to closer collaboration between the marketing and R&D functions. Despite the assumption that a proactive orientation is driven by innovation and technology in which R&D may play a more significant role, there is evidence that a high degree of synergy is developed between the groups when the focus is on future market needs. A market‐driven responsive orientation by necessity requires high integration between departments to commercialize products in a timely manner to meet current market needs. Proactive market orientation exhibits a positive relationship with market performance, whereas responsive market orientation does not. The result may show evidence of the “new product paradox," whereby developing products to address immediate market needs may result in lower market performance because the new products may be replacements for obsolete offerings or are actually cannibalizing sales of existing products.     

Strategic Orientation and Product Innovation: Exploring a Decompositional Approach

While a considerable body of research examines the strategic orientation–innovation relationship, findings in that literature have been mixed. This article calls attention to an underinvestigated problem: the composite, multidimensional conceptualization and measurement of most strategic orientations, which likely contribute to the mixed findings in the literature. To address this issue, the researchers explore a decompositional approach to the strategic orientation–product innovation relationship. The authors utilize the stimulus‐organism‐response framework to select, decompose, and recast a set of strategic orientation components previously identified to be essential to product innovation. To produce more nuanced insights, the authors also decompose product innovation outcomes into breakthrough versus incremental. Furthermore, the sample is decomposed by product type to assess the generalizability of the conceptual model across manufactured goods and services firms. The authors test the conceptual model with a sample of 222 executives of services and manufacturing firms in Germany and Switzerland using partial least squares. By decomposing the strategic orientation effects into direct, indirect, total, and specific components, the detailed empirical analysis yields several new insights. Overall, the results suggest that the relationship between strategic orientation and product innovation is more complex than previously identified in the literature. For example, the results demonstrate that technology orientation works to augment innovation differently in services versus manufacturing firms. More specifically, a focus on technology boosts only breakthrough innovation in manufacturing firms, and only indirectly by enhancing an organization's open‐mindedness. In contrast, services firms extract additional benefits from investing in technology directly (and for both incremental and breakthrough innovation), as well as indirectly by increasing open‐mindedness. The authors also identify complementary as well as suppressing effects on product innovation outcomes from different strategic orientation components. Based on the findings in this study, future research avenues are identified, and managers are advised to consider each component of alternative strategic orientations individually and evaluate the capabilities aligned with components to assess their interdependencies.