Internationalization and the Dynamics of Product Adaptation—An Empirical Investigation

Firms competing in foreign markets can choose to make no changes to the physical product and packaging, called a product standardization policy, which keeps costs low. The main drawback of such a policy is that the product might not satisfy customers. Conversely, firms may choose to modify, or to adapt, the physical characteristics or attributes of a product and its packaging to fit the needs and desires of consumers in different countries better, but this increases development, manufacturing, marketing, packaging, and distribution costs. Though product adaptation is a core aspect of customizing an export market offering, little research has investigated modifying the physical product and packaging. To be successful, an adapted product must add sufficient incremental revenue (through increased sales due to better satisfying customer needs and wants relative to competitive product offerings) such that the additional manufacturing and marketing costs that result from adapting the product are recovered. In this article, a model of the product adaptation process is developed. Using mail surveys, information is gathered from managers in 239 U.S. organizations and 302 South Korean organizations, all of which export products. The goal was to understand better the motivation of firms to adapt their products for export markets as well as the performance implications of adapting products. Furthermore, the model was tested in these two countries to determine if the model is robust and to uncover differences between the United States and South Korea. Using structural equation modeling to analyze the data, a positive association was found between the level of product adaptation and profitability at the project level. Second, U.S. firms appear to be more reactive when adapting products for export markets, doing so when laws and regulations in the export market mandate changes relative to the U.S. market. Conversely, South Korean firms appear to be more proactive and to adapt products even when not required by the governments of export markets. Third, greater international product adaptation is linked to a more responsive marketing organization with customer‐focused practices. Fourth, while a positive link was expected between business unit experience and the extent of international product adaptation, inconsistent results were found between the two country samples. For U.S. firms, it was found that greater experience in international business and product design capability is linked to a higher level of international product adaptation. For South Korean firms, however, a negative relationship was found. Greater international product adaptation occurred with less international business and product design experience. These findings are discussed, and areas for future research are noted.     

Export intensity,scope, and destinations: Evidence from Brazil

How do the three dimensions of geographic export diversification—namely, (1) export intensity, (2) export scope, and (3) export destinations—interact in determining firm performance? How does the export intensity–performance relationship change considering export scope and destinations? Drawing on institution-based and resource-based lenses, we argue that differences between home and destination country institutional environments are amplified by the scope or variety of export destinations. As firm resources nurtured in the home country may not fit an increasing number of different foreign institutional environments, the export intensity–firm performance relationship turns negative. Conversely, our panel data analysis suggests a positive relationship between export intensity and performance when exporters from an emerging economy increase their exports to a limited number of other emerging economies. Thus, our findings extend conventional wisdom on the export intensity–firm performance relationship and suggest that the international marketing strategy literature needs to simultaneously incorporate three dimensions (including export destinations) into the geographic export diversification construct.     

Platform competition: Strategic trade‐offs in platform markets

Because the literature on platform competition emphasizes the role of network effects, it prescribes rapidly expanding a network of platform users and complementary applications to capture entire markets. We challenge the unconditional logic of a winner‐take‐all (WTA) approach by empirically analyzing the dominant strategies used to build and position platform systems in the U.S. video game industry. We show that when platform firms pursue two popular WTA strategies concurrently and with equal intensity (growing the number and variety of applications while also securing a larger fraction of those applications with exclusivity agreements), it diminishes the benefits of each strategy to the point that it lowers platform performance. We also show that a differentiation strategy based on distinctive positioning improves a platform's performance only when a platform system is highly distinctive relative to its rivals. Our results suggest that platform competition is shaped by important strategic trade‐offs and that the WTA approach will not be universally successful. Copyright © 2013 John Wiley & Sons, Ltd.     

Marketing's contribution to the implementation of business strategy: an empirical analysis

This paper describes a study that assesses the performance implications of matching marketing strategy to business strategy. In order to conduct this study we first reviewed the literature on marketing strategy to identify its key dimensions. We then conducted a survey of 1000 senior marketing executives about the strategic marketing practices adopted in their respective firms or business units, and developed scales to describe 11 strategic marketing activities. We next performed a K‐means cluster analysis using these scales to develop a taxonomy of marketing strategy types consisting of: Aggressive Marketers, Mass Marketers, Marketing Minimizers, and Value Marketers. We then observed that superior performance at the firm or SBU level was achieved when specific marketing strategy types were matched with appropriate Miles and Snow (1978) business strategy types. Copyright © 2001 John Wiley & Sons, Ltd.     

How marketing capabilities and current performance drive strategic intentions in international markets

Drawing from two strategic views of the firm—the capability-based view and performance-feedback theory—this study examines the role of both marketing capabilities and current market performance as potential influencers of two key aspects of the intended future competitive strategy of firms operating in international markets: efficiency and marketing differentiation. Hypotheses are developed and tested in a survey of a sample of British exporting manufacturers. The findings are supportive of a more prominent role of marketing capabilities over recent market performance on future strategic intentions in export markets. Additional analyses of firms with an already established market position reveal a clear effect of informational capability on marketing differentiation and of product development capability and current market performance on efficiency intentions. We also find that target international market competitive intensity is a direct driver of efficiency-related but not differentiation-related strategic intentions.     

Incumbents in a dynamic Internet related services market: Does customer and competitive orientation hinder or help performance?

The Internet challenges many incumbent firms to adapt their marketing strategies by developing and offering new products involving Internet technology. Existing literature on market orientation and performance of services suggests that market orientation, and its components, are likely to facilitate effective adaptation. In contrast, the marketing innovation literature suggests market orientation may be too reactive and inhibit effective adaptation. Our results suggest some merit to both perspectives. Client orientation hindered performance of Internet advertising services, while competitive orientation facilitated performance. In addition, limited support was found that suggested superior performance occurs in an environment with a diverse client base and clients possessing in-house capabilities that “compete” with agencies for Internet advertising services. Implications for incumbents pursuing product growth strategies via new, technology related services in dynamic environments are discussed.     

It Won't Fit! For Innovative Products,Sometimes That's for the Best

The degree of overlap (i.e., fit) between product development organizations' resources and the product development projects pursued has powerful performance implications. Drawing on organizational learning theory and the resource‐based view, this research conceptualizes and empirically tests the interrelationships between the levels of fit, innovativeness, speed to market, and financial new product performance. After reviewing the research literature relevant to resource fit and new product performance, the level of innovativeness is posited to be an important moderating and mediating factor, which is validated by analysis of data gathered from 279 product developing firms. Technological fit has a negative direct effect on both technological and market innovativeness, while the use of existing marketing resources (i.e., a high degree of marketing fit) positively impacts technological innovativeness. This suggests, consistent with findings from market orientation research, that a deep, long‐held customer understanding can promote technological innovativeness. The moderating hypotheses proposed are also well supported: First, a high degree of marketing fit has a more positive impact on performance for market innovative products (e.g., products which address a new target market or use a nontraditional channel for the firm). Drawing on a deep customer understanding is more critical to performance for market innovative products. Conversely, the benefits of marketing fit are limited where market innovativeness is lacking. Interestingly, the counterpart moderating role of technological innovativeness on technological fit's performance effect is not significant; the level of technological innovativeness does not significantly impact the performance impact of technological fit. There are also significant moderating effects across dimensions. Our results show that the financial benefit of using existing marketing resources is lessened for technologically innovative products. Technological innovations necessitate drastic adaptation of marketing resources (i.e., channel and brand); firms drawing only on existing marketing resources for a technologically innovative new product will incur reduced profit. Similarly, the positive implications of using existing technological resources are limited for products which are highly market innovative. Generally, resource fit is seen to have an (oft‐overlooked) dark side in product development, though several of our findings suggest that marketing resources are more flexible than are technological resources.     

Internet companies' growth strategies: determinants of investment intensity and long‐term performance

To exploit first‐mover advantages, pioneers may be motivated to amass customers before rivals enter the market. Likewise, when they enjoy increasing returns due to network effects, static scale economies, or learning effects, companies have incentives to invest aggressively in growth. This paper presents econometric analysis of factors that determined the intensity of Internet companies' investments in growth, and analyzes the long‐term performance consequences of such investments. Results indicate that first movers spent significantly more on upfront marketing than non‐pioneers. Contrary to expectations, however, firms in markets that exhibited increasing returns did not spend more on their early customer acquisition efforts than other sample companies. Although the typical sample company did not earn positive long‐term returns, heavy early investments in growth were nevertheless economically rational. In most cases, reducing marketing outlays would have worsened a bad outcome, consistent with an inverted ‘U’ relationship between long‐term returns and upfront marketing spending. Thus, the typical sample company invested in marketing, ex ante, at levels close to those that would have maximized returns, observed ex post. Copyright © 2006 John Wiley & Sons, Ltd.     

Does imitation reduce the liability of foreignness? Linking distance,isomorphism, and performance

Research summary : Research demonstrates that foreign firms from institutionally distant countries imitate the practices of domestic firms (i.e., adopt an isomorphism strategy). The conjecture has been that pursuing such a strategy can help foreign firms counteract the deleterious performance consequences associated with institutional distance; yet there is scant evidence of such. This study treats isomorphism as an endogenously selected strategy influenced by institutional distance to examine its performance consequences. Using a dataset of 80 foreign banks from 25 countries operating in the United States, we find that foreign firms from institutionally distant home countries benefit initially from selecting an isomorphism strategy. However, the benefits diminish with experience. Managerial summary : Multinational companies experience great difficulty in managing institutional distance, and research suggests that one way to overcome distance‐related constraints is to imitate the strategies of local companies. Unfortunately, we do not know enough about the performance‐related consequences of engaging in such imitative behavior. This study examines whether imitating local firms improves performance for multinational companies from institutionally distant markets. We find that imitation improves a firm's performance at first; however, with experience those same strategies result in performance decrements. Managers of multinationals should therefore be careful not to get locked into imitative strategies that provide performance benefits upon entry, but that fail to provide benefits over time. Copyright © 2015 John Wiley & Sons, Ltd.     

Modeling the dynamics of strategic fit: a normative approach to strategic change

This study develops and tests a dynamic perspective on strategic fit. Drawing from contingency and resource‐based arguments in the strategy and organizational theory literatures, we propose a distinctive analytical approach to identify environmental and organizational contingencies that should predict changes in a firm's strategy and the performance implications of such changes. We test our model using extensive longitudinal data from over 4000 U.S. savings and loan institutions during a period when many S&Ls considered changing strategic direction. The findings support our model of dynamic strategic fit. Specifically, we find that (1) the timing, direction, and magnitude of strategic changes can be logically predicted based on differences in specific environmental forces and organizational resources, and (2) organizations that deviated from our model's prediction of dynamic strategic fit (i.e., changed more or changed less than our model prescribed) experienced negative performance consequences. We conclude by discussing the implications of our approach and findings for future research on strategic fit and strategic change. Copyright © 2000 John Wiley & Sons, Ltd.     

Entering new markets: The effect of performance feedback near aspiration and well below and above it

Research summary : This study draws on the resource‐based view and the behavioral theory of the firm to gain new insights about the effect of performance relative to aspiration level (i.e., performance feedback) on the decision to enter new markets. Results show an inverted U‐shaped relationship between performance both below and above aspiration level, and the probability of firms to enter new markets. That is, when firms are well below or well above their aspiration level, they significantly change their behavior. This article develops a theoretical framework to clarify and organize these findings. Managerial summary : This study examines the effect of performance feedback, and particularly, large discrepancies between firm performance and aspiration level on the decision to enter new markets. It provides support to the role of performance feedback in affecting the decision to enter new markets, a factor that has received relatively little attention in the extensive literature that has examined the inducements of such moves. Results show that, as performance falls below or rises above aspiration, a firm's probability of entering new markets increases up to a certain point after which this relationship decreases. This shows that the tendency to enter new markets is different for firms that are in the neighborhood of aspiration level compared to those that are well below or above it. Copyright © 2016 John Wiley & Sons, Ltd.     

Effects of alliances,time, and network cohesion on the initiation of foreign sales by new ventures

In this study, we seek to advance the network perspective on new venture internationalization by examining the role of networks in accelerating new venture sales into foreign markets. We propose that knowledge derived from ventures' technology and marketing alliances increases the likelihood that new ventures begin exploiting opportunities in international markets. We also argue that the extent to which the networks open the venture to new knowledge or constrain it to knowledge already shared among the partners will influence the initiation of foreign sales by a venture. Using a longitudinal dataset of 118 ventures in the U.S. biotechnology industry, we confirm that different types of alliances (and, therefore, different types of knowledge—technology and marketing knowledge) differentially impact the likelihood of new venture internationalization. Moreover, network cohesion among venture alliances increases the likelihood that marketing alliances will promote initial foreign market sales, but decreases the likelihood that technology alliances will do so. Our research is a timely response to a call for the study of interactive effects among network structure, complex tasks, and time, and it provides a possible explanation for certain unexpected findings in studies that did not consider the effects of time. Copyright © 2010 John Wiley & Sons, Ltd.     

Export intensity and marketing in transition economies: Evidence from China

Firms in transition economies face a common adaptation problem of having to compete within increasingly marketized environments. This creates a need for managers to learn skills associated with marketing, such as those pertaining to the development of new and better products. Although distance is usually a barrier to learning, we propose that in exchange situations involving transition economy firms, the benefits of long-distance trade may outweigh the costs of knowledge acquisition. We find support for this proposition in this study by establishing a link between the export intensity of Chinese exporters and their acquisition of marketing know-how. We also find evidence that the marketing knowledge of transition economy firms has a positive effect on overall performance.     

Foreign‐based competition and corporate diversification strategy

Since the mid‐1980s U.S. domestic firms have faced significant increases in foreign‐based (i.e., import) competition as reductions in barriers to international commerce have resulted in markets and industries becoming increasingly global. Despite the growing and widespread importance of foreign‐based competition, the influence that such competition may exert on corporate diversification strategy is a question largely overlooked in the strategic management literature. This paper examines the impact of foreign‐based competition in a firm's core business on both the level and nature of a firm's diversification strategy at the corporate level in a panel dataset of U.S. firms over the period 1985–94. Our findings provide the first evidence that increased foreign‐based competition is indeed a statistically significant factor explaining both the reduced business‐level diversity and the increased strategic focus of U.S. firms that has been widely perceived over the past two decades. Copyright © 2005 John Wiley & Sons, Ltd.     

Growing with the market: How changing conditions during market growth affect formation and evolution of interfirm ties

Research Summary: Market conditions are known to matter for firm performance and growth. This study explores how changing levels of uncertainty and competition affect interfirm ties of entrepreneurial firms as markets transition from nascent to growth stage. Tracing six entrepreneurial game publishers during the growth stage of the U.S. wireless gaming market, the findings reveal that in a growth stage market, as uncertainty decreases, certain ties of entrepreneurial firms are terminated. First, existing partners may cut ties and become competitors after entering the market directly. This is a “winner's curse” as more successful firms are more likely to entice their partners to enter the market directly. Second, ties may be terminated as prominent firms that are “overwhelmed” with too many partners cut ties with low to mediocre performance, while their remaining partners enter a positive spiral of tie strength and performance. Finally, as uncertainty decreases, new firms may enter the market as competitors to prominent firms. While entrepreneurial firms with high‐ and low‐performing ties to prominent partners may find ties with these new entrants attractive, those with mediocre ties to few prominent partners find this move too risky and wait for a first mover to legitimate it. Overall, the findings show that changing levels of uncertainty and competition in growth stage markets can have different consequences for firms due to heterogeneity in their ties and power relative to partners. The findings provide several contributions to literature regarding the relationship among interfirm ties, firm performance, and market evolution. Managerial Summary: Based on interviews at six entrepreneurial game publishers in the United States and their partners, this study shows how changing levels of uncertainty and competition in growing markets can have different consequences for firms based on the different types of alliances in their portfolio and their power relative to partners. The findings highlight the importance of managing partners differently based on alliance type and goal of the partner. They advocate remaining flexible in alliance management as information asymmetries, intentions and bargaining power of partners can change and lead to abrupt alliance dissolution. They show that alliance portfolio management goes beyond a firm's capability of managing individual alliances, and provide a tool for managers to evaluate their alliance portfolios and take the necessary precautions.     

Flexibility in marketing & sales interfacing processes

Preliminary insights in the marketing literature indicate that flexibility is important in marketing and sales processes and interaction. However, to date, marketing and sales management literature lacks an understanding of what flexibility in marketing-sales interfaces looks like, its potential organizational consequences, and potential boundary conditions. Using data from interviews with marketing and sales managers, this study explores the nature, outcomes and facilitators of flexibility at the marketing-sales interface. This study conceptualizes marketing-sales interface flexibility (MSIF) as a process of flexible cross-functional resource exchange and finds that MSIF has positive organizational outcomes (both in terms of performance and relationship quality), that MSIF is essential for firms when dealing with exigencies in turbulent environments, and that the utility of MSIF is conditioned by the speed with which MSIF is implemented. The research contribution is twofold. At a theoretical level, the study defines the construct for the first time, revealing MSIF's conceptual composition for examination, and develops theory regarding MSIF's direct relationships with key business outcomes, as well as likely contingencies that shape its importance. At a practical level, the study's framework offers a tool that managers can use to help build organizational success through enhanced flexibility in their marketing-sales interfaces.     

Porter's ‘competitive advantage of nations’: An assessment

Porter's Competitive Advantage of Nations is an important book which bridges the gap between strategic management and international economics while contributing substantially to both. Porter's analysis of the impact of national environment on international competitive performance demonstrates the potential for the theory of competitive strategy to rescue international economics from its slide into refined irrelevance, while simultaneously broadening the scope of the theory of competitive strategy to encompass both the international dimension and the dynamic context of competition. Nevertheless, the breadth and relevance of Porter's analysis have been achieved at the expense of precision and determinancy. Concepts are often ill defined, theoretical relationships poorly specified, and empirical data chosen selectively and interpreted subjectively.     

Industrial Pricing Strategies in Singapore and the U.S.: Same or Different?

It is generally believed that business-to-business marketing strategies are more uniform worldwide than those in consumer markets, because the buying firms focus more on issues such as product performance and profits. If this is so, a strategy model validated in one industrial market should apply reasonably well in another. This study compares pricing strategies of industrial firms in two market economies, the U.S. and Singapore. A pricing strategy model validated in the U.S. was tested in Singapore to determine whether internal and external conditions incorporated in the model could adequately explain differences in strategy choices between the markets.     

Domestic Market Structure and Performance in Global Markets: Theory and Empirical Evidence from U.S. Food Manufacturing Industries

This paper formally articulates Porter's hypothesis that the degree of competition in domestic markets is positively linked to performance in international markets. Hypotheses are tested using measures of the trade performance of U.S. food manufacturing industries as proxies for international competitiveness. Empirical results are generally consistent with Porter's hypothesis; net export share is negatively related to industry concentration. The competitiveness of agricultural inputs, R & D intensity, and trade barriers of other countries were also found to be important determinants of the performance of these industries in global markets.     

网络营销绩效评价体系研究

网络营销是企业营销活动的主要形式,因此,网络营销的绩效评价对企业的成功经营至关重要。通过研究国内外关于网络营销绩效体系的文献,分析比较现有的网络营销绩效评价体系,介绍目前国内外对该体系的研究现状,指出目前评价体系在评价方法和指标选取上的不足,最后对目前网络营销绩效评价的研究和发展方向做了总结和展望。