Market Orientation, Competitive Advantage and Business Performance: Exploring the Indirect Effects

Abstract

In this paper, we address insufficiently explored indirect
relationships between market orientation (MO),
organizational strategic resources and business outcomes.
Previous studies have identified MO as a key strategic asset
that contributes to competitive advantage and ultimately to
business performance. However, the extant research is at best
partial in addressing the contingencies that might uphold
these relationships. The goal of this study is to extend the
existing knowledge by showing that MO complements with
other strategic management processes that are relevant for
business success. To address the research question, a
conceptual model with three hypotheses was developed. Data
was obtained with a survey questionnaire on a sample of 265
medium and large-sized firms from Croatia. The findings
indicate that MO influences competitive advantage stronger
at higher levels of VRIN resources. Also, findings suggest that
competitive advantage mediates the relationship between MO
and business performance. In the end, the theoretical and
managerial implications are presented along with future
research directions in light of the limitations of this study.