The influence of business strategy on new product activity : The role of market orientation

By R. Frambach, Jaideep Prabhu, Theo M. M. Verhallen. 2003

290 citations recorded by the source corpus.

Abstract In this paper, we propose that business strategy influences new product activity both directly and indirectly via its influence on market orientation. Accordingly, we develop a framework linking firms' relative emphasis on cost leadership, product differentiation and focus strategies to firms' customer and competitor orientation as well as their new product development and introduction activity. We use this framework to develop a simultaneous equations model that is tested on survey data from 175 Dutch firms of varying size and across different industries in the manufacturing sector. The surprising findings are that a greater emphasis on a focus strategy results in a decreased emphasis on customer orientation and that competitor orientation has a negative direct influence on new product activity and an indirect positive effect via customer orientation. We discuss the implications of these findings for theory and practice.

Subfields: Economics and Econometrics, Management Science and Operations Research, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/85049ab337c055c6b91a71ec375f2e9fd4d5e94b

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. G. Tomas M. Hult
2. A. Grinstein
3. C. Droge
4. Roger J. Calantone

In Management Science and Operations Research

1. G. Tomas M. Hult
2. A. Grinstein
3. Roger J. Calantone
4. J. Cadogan
5. Aron O'Cass

In Strategy and Management

1. G. Tomas M. Hult
2. H. Erkan Ozkaya
3. Michael K. Brady
4. A. Grinstein
5. Clay M. Voorhees
6. Roger J. Calantone
7. Stephan M. Wagner
8. Aron O'Cass

Citations in the corpus

• Discriminant validity testing in marketing: an analysis, causes for concern, and proposed remedies (2016, methodology): “75 The lower focal correlation was consistent with Grewal et al.’s (2004) moderately high correlation levels (i.”
• The effect of market orientation and its components on innovation consequences: a meta-analysis (2008, background): “Some studies suggest that competitor-oriented firms, which continuously monitor progress against rivals, gain opportunities by creating products or marketing programs that are differentiated from those of competitors (Im and Workman 2004) or by adopting an effective ‘second-but-better’ approach (Fra”
• Market orientation, knowledge competence, and innovation (2015, background): “Frambach et al. (2003) suggested that treating them separately and disentangling their effects should be a major direction for future research; we concur.”
• How the interplay between consumer motivations and values influences organic food identity and behavior (2018, background): “…except for ‘health conscioussness’ with respect to its correlation with ‘organic food identity’ (variance, health consciousness=0.45 squared correlation health consciousness-organic food identity=0.67), although the latter is below the suggested threshold of 0.85 (Frambach et al., 2003).”