Achieving Customer Satisfaction, Loyalty, and Retention Through Strategic Alignment

This paper explores whether a customer orientation, and the strategy decisions it entails, explain differences in customer satisfaction, loyalty, and retention across firms in the automotive industry. The concept of strategic alignment is introduced to capture both the degree to which automotive firms pursue a strategy of quality (benefit) versus value (cost) leadership and whether this strategy is aligned or consistent with its customers’ needs. This strategic alignment explains significant differences in firm performance across 21 foreign and domestic competitors in the U.S. automotive market and provides important diagnostic information for strategy improvement.

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