Dynamic capabilities and competitive advantages as mediator variables between market orientation and business performance

Abstract

PurposeThis paper aims to explore a new causal link between market orientation and business performance by introducing dynamic capabilities as a mediator of the relationship between market orientation and competitive advantages, which ultimately determine business performance.Design/methodology/approachThe mediating roles of dynamic capabilities and competitive advantages are tested with a sample of 1,190 Portuguese firms using a structural equation model.FindingsThe results confirm the hypotheses regarding the mediating roles of the competitive advantages (differentiation and cost leadership) in the relationship between dynamic capabilities and business performance. Additionally, dynamic capabilities also mediate the relationship between market orientation and competitive advantages.Practical implicationsThis study shows that business performance depends on the capacity of firms to collect the best market information on customers and competitors, to disseminate this information throughout their internal structure and ultimately optimize its use to respond appropriately to market challenges and trends. These will provide firms with a set of capabilities and a competitive advantage.Originality/valueThis study provides empirical evidence on the understanding of the relationship between market orientation and performance, through the mediating effects of both dynamic capabilities and competitive advantages.

Information technology (IT) governance and IT capability to realize firm performance: enabling role of agility and innovative capability

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Radical innovation, incremental innovation, and competitive advantage, the moderating role of technological intensity: evidence from the manufacturing sector in Jordan

“…According to Porter (1985), the low-cost strategy involves providing products and services through the economies of scale at lower prices than competitors regardless of the quality (Li and Zhou, 2010). Meanwhile, a differentiation strategy is related to the organization’s innovative capacities and the ability to deliver new products and services that are not available through competitors (Cavusgil and Knight, 2015; Correia et al , 2020). Organizations with entrepreneurial orientations and growth through learning can support a differentiation strategy (Gatignon et al , 2002; Knight et al , 2020; Shi et al , 2020).…”

Gestão do Conhecimento e Orientação para o Mercado como Fonte de Vantagem Competitiva: uma survey em empresas do sul do Brasil (Knowledge Management and Market Orientation as a Source of Competitive Advantage: a survey on companies in southern Brazil)

“…Consistentemente, a orientação para o mercado traz avanços em relação a vantagem competitiva (PERIN; SAMPAIO, 2004;ZHOU, BROWN;DEV, 2009;DE GUIMARÃES et al 2016;ANABILA et al, 2020;CORREIA;DIAS;TEIXEIRA, 2020), pois quanto maior a orientação para o cliente ou mercado de uma empresa, mais a empresa é capaz de desenvolver uma vantagem competitiva que terá sua base na inovação e diferenciação de mercado. Perante o exposto, elenca-se a Hipótese 2.…”