Toward a research model of market orientation and dynamic capabilities

In the majority of studies on market orientation it is claimed that compelling evidence exists that market orientation has a positive effect on firm performance. It is important to investigate the mediating effect of market orientation on firm performance. Drawing on the dynamic capabilities perspective, in this paper, the view is taken that market orientation is a rare, valuable, and inimitable firm resource; and furthermore is a set of dynamic capabilities. In light of conceptual and empirical advancement, a research model about the impact of market orientation and dynamic capabilities on firm performance is proposed and delineated. With the conceptual model that is developed, the author shows how market orientation can be transformed into dynamic capabilities and it is argued that the competitive value of market orientation is positively mediated by dynamic capabilities. Finally, some research hypotheses for future research are discussed.

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