Innovative capabilities: Their drivers and effects on current and future performance

This study investigates the role of a firm's orientation, both customer and competitor, in driving innovative capabilities and the impact of those capabilities on a firm's current and future performance. The study's contribution is threefold in that it (1) examines market-related exploitative and explorative capabilities in conjunction with product development exploitative and explorative capabilities in terms of their strategic drivers (firm orientation) and performance outcomes; (2) disentangles the effects of exploitative and explorative capabilities on current and future performance; and (3) examines the role of innovative capabilities within the particularly relevant, but understudied, context of exporting. The findings suggest that, although customer orientation relates to both exploitative and explorative capabilities, competitor orientation relates only to exploitative capabilities. Exploitative capabilities affect current performance, whereas explorative capabilities affect future performance. These findings are of crucial relevance to export managers in their quest to identify, extend, and create new market opportunities.     

Relating strategic market orientation and market performance: role of customer value types

A service provider achieves competitive advantage by configuring appropriate strategic orientation and customer value type. This paper addresses three important issues: (i) which customer value type (economical, relational or technical) is important for bank customers? (ii) which strategic market orientation (customer or competitor) helps in achieving the desired value type? and (iii) which value type significantly predicts market performance? We propose that a strategic market orientation pursued by a firm shall influence the customer value it intends to offer so as to maximize the market performance. Using data collected from 538 bank customers, this study reveals that when there is a perfect match between strategic market orientation and value being perceived by its customers, a firm shall achieve strategy-value fit and realize optimal market outcomes in the form of customer satisfaction, acquisition, retention, cross-selling, and up-selling. Furthermore, a bank shall realize maximum level of market performance if it pursues both customer and competitor orientation and endeavors to deliver technical/functional value to its target customers. The paper concludes with managerial implications and future research directions.     

How strategic orientations influence the building of dynamic capability in emerging economies

Under the fierce pressures of the fast changing environments that characterize emerging economies, firms must develop dynamic capabilities to survive the competition. This study examines how strategic orientation helps build dynamic capability and its contingencies in China's emerging economy. A survey of 380 firms indicates strategic orientations are important drivers of adaptive capability, a key element of dynamic capabilities. The effectiveness of strategic orientations is contingent on market dynamics. In particular, when market demand becomes increasingly uncertain, customer orientation has a weaker impact, whereas technology orientation has a stronger effect on adaptive capability. As competition intensifies, both competitor and technology orientations build adaptive capability more effectively.     

A STRATEGIC FRAMEWORK FOR SUPPLY CHAIN ORIENTED LOGISTICS

The Council of Logistics Management's (CLM) name change to the Council of Supply Chain Management Professionals (CSCMP) has intensified discussions regarding the difference between supply chain management and logistics. This paper merges broadly accepted paradigms from strategic management and marketing to introduce a theoretically consistent framework that differentiates supply chain management from logistics while highlighting the complementary relationship. Supply chain management is portrayed as a firm or SBU level phenomena while logistics is expressed as a competency within supply chain management possessing both strategic and structural capabilities focused exclusively on managing the move/store activities used to fulfill customer orders. Research propositions regarding the interfaces and nature of logistics within a strategic supply chain orientation are drawn to guide thought and development in the discipline.     

SME Internet use and strategic flexibility: the moderating effect of IT market orientation

Abstract

One of the most important topics in the marketing literature has been the concept of market orientation. However, questions remain as to the dynamics of how market orientation translates into intermediate capabilities. This study explores relationships among different types of Internet usage, IT market orientation (the extent to which IT is aligned to manage customer and competitor information and internal activities), and strategic flexibility (firm capability to respond to the need for change). Specifically, use of the Internet for communication with relevant stakeholders, owing to its market-sensing potential, should be positively and significantly related to strategic flexibility for SMEs with more IT market-oriented alignment. The market-sensing potential of Internet communication to impact strategic flexibility positively for SMEs is likely to be lost under low IT market-oriented-alignment conditions. In contrast, IT market orientation should not moderate the relationship between Internet use for transactions with relevant stakeholders and strategic flexibility, given that the typical order taking and processing is a static, routine function for SMEs. Results supported hypothesised relationships. By delineating the type of Internet usage and required IT alignment that contribute to leveraging the Internet effectively, findings hold implications for future research by clarifying boundary conditions for Internet effects. Specifying how and when Internet use promotes strategic flexibility, an important enabler of competitive advantage, helps small business owner/managers better utilise their limited resources.     

Market orientation, competitive advantage, and performance: A demand-based perspective

This study assesses how customer value affects a firm's market orientation and consequently, competitive advantage and organizational performance in a service industry — the global hotel industry. The findings show that if a firm perceives its customers as valuing service, the firm is more likely to adopt both a customer and a competitor orientation; if the firm thinks its customers are price sensitive, the firm tends to develop a competitor orientation. Moreover, the greater a firm's customer orientation, the more the firm is able to develop a competitive advantage based on innovation and market differentiation. In contrast, a competitor orientation has a negative effect on a firm's market differentiation advantage. Finally, innovation and market differentiation advantages lead to greater market performance (e.g., perceived quality, customer satisfaction) and in turn, higher financial performance (e.g., profit, market share).     

QUALITY,OPERATIONAL LOGISTICS STRATEGY,AND REPURCHASE INTENTIONS: A PROFILE DEVIATION ANALYSIS

Emerging thoughts on quality suggest that three principal sources of customer‐based value creation exist for firms operating in the online marketplace. These include a focus on delivering (1) service quality, (2) product quality, and (3) eBusiness quality. Drawing on strategic choice theory coupled with configuration theory, we conducted a profile deviation analysis among customers of online grocery firms using the “ideal” quality profile for four operational logistics strategies as the benchmark (semi extended strategy, fully extended strategy, de‐coupled strategy, and centralized extended strategy). The findings suggest that service, product, and eBusiness quality‐based fit with operational logistics strategy type are associated with customers' behavioral (repurchase) intentions. This lends support to the notion that capitalizing on the appropriately weighted quality‐focus represents a strategic vehicle to create superior outcomes in online businesses. The makeup of these ideal quality profiles that represent the strongest repurchase intentions of customers is also provided.     

Where the eyes go,the body follows?: Understanding the impact of strategic orientation on corporate social performance

This research seeks to address two questions with respect to firm corporate social performance (CSP): (1) “do different strategic orientations have differential impacts on a firm's overall CSP?”; and, if so, (2) “is there an effect of a firm's strategic orientation on the types of CSP that a firm implements?” Using a unique dataset that combines survey data on firms' strategic orientations for 115 US-based firms with CSP data from MSCI-ESG, we empirically examine the impacts on CSP levels of four different firm strategic orientations: customer, competitor, interfunctional coordination, and shareholder. Our empirical analysis demonstrates that (1) firms with a stronger orientation toward customers have higher levels of CSP overall, and (2) when firms have a stronger customer orientation, we find that the firm has higher CSP levels in domains dedicated toward secondary stakeholders, while firms with a stronger shareholder orientation exhibit higher levels of CSP dedicated toward primary stakeholders.     

Market Orientation and Organizational Learning Capabilities

The platform of contemporary marketing thought is founded upon the marketing concept. While there has been much debate about the precise nature of this concept, related discussion concerning its manifestation, in the form of a firm's market orientation, has developed to suggest that it is a feature exhibited by organizations possessing superior skills in understanding and satisfying customer needs. Despite the favourable externalities likely to accrue to an organization that is market oriented, it has been claimed that for a firm to achieve its full potential to learn about the marketplace, instilling a market orientation is only a first principle. While market orientation provides the norms for responding to the marketplace, this needs to be complemented by appropriate mechanisms and processes for higher-order learning to occur. This article examines such a conceptual argument and empirically investigates the relationship between two key constructs: market orientation and organizational learning capabilities. Data were generated from a survey of medium and large industrial firms and five dimensions of organizational learning capability items are tested against two different groups of firms in terms of their degree of market orientation. As contrasted with low market orientation firms, organizations characterized by high levels of market orientation perceived greater organizational learning capability with regard to the dimensions of strategic awareness, operational flexibility, strategic development processes and managerial skills. Discussion is given to these findings and implications are drawn for business executives and future research.     

Information Technology and Customer Orientation: A Study of Direct,Mediated, and Interactive Linkages

This study investigates whether and how information technology (IT) is linked to a firm's ability to understand and fulfil customer needs, i.e. customer orientation. IT alone or in tandem with other strategic resources may enable businesses to process market intelligence and coordinate organisational responses to meet evolving buyer preferences. Based on a survey of senior marketing managers and PLS path model analyses, we learned that greater IT capabilities are associated with higher customer orientation but in mediated and interactive ways with marketing information quality and organisational trust. These and other findings largely supported the conceptual model. An implication is that while IT capabilities can help firms be more customer-focused, other critical resources must also be present.     

Emerging Market Footholds and Knowledge: An Examination of New Product Launch Performance

As developed markets become more saturated, managers increasingly recognize the value of emerging markets as venues for growth opportunities. Yet, launching products into these markets is extremely risky due to weak institutional environments (e.g., lack of physical infrastructure), making success more uncertain. To alleviate this challenge, theory points to using emerging market footholds that yield market-specific knowledge. However, it is unclear whether knowledge is realized and, if so, what facets of harvested knowledge are effective in driving performance. Accordingly, we used data collected from a survey of business professionals to examine emerging market footholds and market-specific knowledge (i.e., customer, competitor, and logistics knowledge). Our results show that the extent of market presence held by an emerging market foothold is positively associated with all types of knowledge, yet only competitor and logistics knowledge—not customer knowledge—is positively associated with product launch performance. A supplemental sample of new product launches in developed markets revealed the opposite results wherein customer knowledge was the only significant predictor. Viewed collectively, the results suggest a market maturity threshold wherein logistics and competitive knowledge becomes less influential in driving performance, and customer knowledge becomes more influential.     

Testing interaction effects of the dimensions of market orientation on marketing program creativity

Despite the plethora of research on market orientation, our understanding of how different dimensions of market orientation interact with each other in generating new intelligence for marketing programs is limited. In this paper, we develop and test a model that examines the interaction effects of the three dimensions of market orientation—customer orientation, competitor orientation, and cross-functional integration—on generation of marketing program creativity, composed of novelty and meaningfulness dimensions. In empirically testing such effects, we illustrate how to use two-stage least squares (2SLS) estimation. We find significant positive interaction effects between customer orientation and competitor orientation and between competitor orientation and cross-functional integration in predicting marketing program novelty. We also find that competitor orientation and cross-functional integration significantly and positively interact with each other in improving marketing program meaningfulness. Our empirical results provide implications and directions for market orientation research.     

Reverse logistics: Understanding end-of-life product management

As firms respond to stricter regulations and increasing consumer expectations, reverse logistics programs to support end-of-life product management strategies have become more prevalent. Despite a growing body of theoretical literature on this topic, many firms struggle to implement efficient and effective reverse logistics systems. In this article, we identify common strategic, tactical, and operational considerations needed to design reverse logistics programs and offer industry examples to show how organizations have excelled in these areas. Through a synthesis of literature and examples, we provide key takeaways across a range of reverse logistics activities. We present ways in which managers can implement best practices in reverse logistics that not only benefit the environment but also generate societal and stakeholder value, augment and improve customer service and loyalty, and increase market share and revenue capabilities.     

LOGISTICS SERVICE PERFORMANCE: ESTIMATING ITS INFLUENCE ON MARKET SHARE

The research examines the relationships among three dimensions of logistics service performance (operational, relational, and cost performance), customer satisfaction, customer loyalty, and market share. Perceptions of customers of third party logistics (3PL) providers are used to assess 3PL performance constructs. Of the three dimensions of service performance, relational performance is the single most important factor in engendering customer satisfaction. The research supports the strong relationship between customer satisfaction and loyalty identified in previous studies. It also establishes an empirical link between customer loyalty and a measure of market share that is anchored by objective, secondary data.     

THE EMPOWERMENT OF FRONTLINE SERVICE STAFF IN 3PL COMPANIES

Research on third‐party logistics (3PL) service providers has focused more on managing customer relationships than on managing the frontline personnel who interact with customers on a daily basis. Thus, even though the overall need for 3PL's to be market‐oriented is well‐recognized, relatively little is known about how 3PL companies support and develop frontline service staff to provide better service. This study draws on 3PL company site managers' responses to a postal survey that examines the influences of internal communication, customer service training and managerial coaching for customer contact employees on the relationship between market orientation and frontline service recovery empowerment.     

The indirect effect of online marketing capabilities on the international performance of e-commerce SMEs

International e-commerce is a strong global trend pushed by a tail wind of bolstering economic policies, changing customer behaviors, and improved logistics and technologies. This study investigates the reasons for performance variations among international e-commerce SMEs. Building on the capabilities perspective and market orientation literature, a research model is developed and tested with linear regression and mediation analysis on an effective sample of 99 Swedish SMEs which use e-commerce as an international sales channel. Our study shows that online marketing capabilities are necessary but not sufficient to increase performance among these companies. Our results show that marketing ambidexterity, reflected by both market-driven and market-driving approaches, is instrumental to leverage the effect of online marketing capabilities.     

A Cross‐Disciplinary Examination of Firm Orientations’ Performance Outcomes: The Role of Supply Chain Flexibility

Although market orientation (MO) has long been considered an important business philosophy, the examination of MO outside the firm's boundaries has been rather limited. To address this, this study explores how supply chain orientation and operational flexibility (FLX) facilitate the implementation of MO. Although the positive impact of MO on firm performance has been well established, this study highlights that such benefits are enhanced by the development of supply chain related capabilities. Results indicate that market‐oriented firms are more likely to realize the strategic importance of managing the supply chain when operating under conditions of high environmental munificence, dynamism, and complexity. This provides a better understanding of the complex relationship between the demand and supply sides of the firm. This study highlights the importance of marketing theory and concepts to supply chain management scholars, and vice versa. This further accentuates the importance of eliminating the disconnect between supply and demand‐management processes, also described as the “Great Divide” (Drucker 1973; Esper et al. 2010a,b). A number of key managerial implications are offered as well.     

A STEP TOWARD DEFINING A CUSTOMER‐CENTRIC TAXONOMY FOR MANAGING LOGISTICS PERSONNEL

To retain competitive viability, some progressive warehouses and distribution centers are expanding services and adopting a customer orientation. Through cluster and ANOVA analyses, three distinct classifications of frontline logistics managers are disclosed and compared with respect to their perceived levels of internal customer orientation toward their subordinates, common performance indicators, and other demographic and organizational‐type variables. Important differences exist among the groups; however, logistics managers in all three clusters score relatively well in most areas explored.     

Logistics service capabilities and firm performance of international distribution center operators

This study empirically evaluated the crucial logistics service capabilities and firm performance of international distribution center operators in Taiwan. Three critical logistics service capabilities were identified based on factor analysis: (a) innovation capability, (b) customer response capability, and (c) flexible operation capability. Cluster analysis was subsequently used and based on their mean scores in the three logistics capability dimensions, respondents' firms were assigned to one of three groups, namely: customer response and flexible operation capabilities-oriented firms, customer response and innovation capabilities-oriented firms, and customer response capability-oriented firms. Findings indicated that customer response and innovation capabilities-oriented firms had the best firm performance, followed by customer response and flexible operation capabilities-oriented firms and customer response capability-oriented firms.     

Revisiting customer analytics capability for data-driven retailing

Customer analytics is one of the most dominant strategic weapons in today's competitive retail environment. In spite of its strategic importance, there is scant attention to investigating customer analytics capabilities in the retail context. Drawing on a systematic literature review and thematic analysis, this study proposes a multidimensional customer analytics capability model by identifying relevant dimensions and sub-dimensions in retail settings. The principal contribution of this study is that the model links a customer analytics perspective to a resource-based view (RBV)-capability of the retailers by proposing six customer analytics capability dimensions and twelve sub-dimensions in the spectrum of market orientation and technology orientation. The customer analytics capability dimensions depict three crucial themes of marketing, such as value creation (offering capability and personalization capability), value delivery (distribution capability and communication capability), and value management (data management capability and data protection capability). By incorporating this capability dimensions, practitioners will likely be able to engage customers and enhance customer equity.