Benefits of customer and competitive orientations in industrial markets

Abstract In recent years, considerable research attention has focused on what constitutes a customer and competitive orientation, and how each may impact business performance. In this study, we empirically investigate the influence of customer and competitive orientations on business performance in the context of the machine tool industry. In our analysis, we discovered that there are four latent dimensions underlying customer and competitive orientations, and we have interpreted these dimensions as basic market orientation, competitive benchmarking, customization, and international orientation. We then evaluated the influence of these dimensions on four perceptual measures of business performance. Our results indicate that basic market orientation has a stronger impact on performance than the other dimensions. We also discovered that international orientation has an inverted U-shaped relationship with business performance in the short-term, and a positive linear relationship in the long-term. Managers could use the four-part conceptualization of customer and competitive orientations to assess strengths and weaknesses and in long-term planning. We also discuss some areas for future research.

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