A customer orientation can also enable afirm to develop a com
petitive advantage based on market differentiation. With the knowl
edge of what customers desire, a customer-orientedfirm can then
make its market offerings more appealing by adjusting its marketing
mix (Porter, 1985; Miller, 1988). Further, because the major objective
of a customer-orientation is to achieve long-term customer satisfac
tion, a customer-orientedfirm is highly motivated to provide offerings
that uniquely meet the particular needs of its target market (Slater and
Narver, 1998). Thus, a customer-orientedfirm appeals to its customers
by developing a unique image through the effective tailoring of its
marketing mix.
H2a: The greater the firm's customer orientation, the greater its
innovation differentiation advantage.
H2b: The greater the firm's customer orientation, the greater its
market differentiation advantage.
Competitor orientation essentially focuses on identifying (1) current
and potential competitors, (2) the technologies they utilize, and
(3) whether they represent an attractive alternative from the perspec
tive of the target customers (Narver and Slater, 1990). Competitor
oriented businesses watch competitors closely, match the marketing
initiatives of competitors quickly, and attempt to understand both the
short-term strengths and weaknesses and long-term capabilities and
strategies of current and potential competitors. Then, using their rivals
as a frame of reference, competitor-orientedfirms can identify their
own advantages and disadvantages. With a clear understanding of its
own strengths and weaknesses as well as those of its competitors, a
competitor-orientedfirm could utilize information“…internalizing a
competitor's strengths byimitation, or nullifying a competitor's strength本文来自^辣@文~论^文%网*原文请找腾讯#3249.114
by productinnovation”(Li and Calantone, 1998: 17, italics added).
Therefore, competitor orientation appears to have double-edged
effects on innovation. On the one hand, with a better understanding
of its relative standing in the marketplace, a competitor-oriented
business can create a competitive advantage through continuous pro
duct innovation. On the other hand, a competitor-orientedfirm may
simply choose to imitate its competitors rather than develop innovative
goods and services to decrease the high cost of product innovation.
Empirical research byLukas and Ferrell (2000)indicates that compe
titor-orientedfirms tend to present the market with“me-too”products
and eschew“new-to-the-world”innovations. On balance, then, these
conflicting effects of competitor orientation on innovation may cancel
each other, resulting in a non-significant relationship between compe
titor orientation and innovation differentiation advantage.
Because the emphasis of competitor orientation is to“meet and
beat the competition,”a competitor-orientedfirm matches closely its
capacities and offerings with those of its competitors (Day and
Wensley, 1988). By focusing on its competitors, afirm may be unaware
of its real interest, which may lead to inconsistent strategies and
behaviors and, consequently, unstable product offerings (Armstrong
and Collopy, 1996). Furthermore, a competitor-orientedfirm tends to
assume that what the competitors have done is correct, and thus may
risk overlooking the products or services that are uniquelyfitted to a
particular market segment (Hamel and Prahalad, 1994). Therefore,
competitor-orientedfirms may have difficulty in developing a market
differentiation advantage.
H2c: The extent of afirm's competitor orientation has no significant
bearing on the degree of its innovation differentiation advantage.
H2d:Thegreaterthefirm's competitor orientation, the less its market
differentiation advantage.
2.4. Competitive advantage andfirm performance
Existing literature has well-documented the positive effect of com
petitive advantage on performance, as competitive advantage provides
afirm with the wherewithal to outperform its rivals. This study adds
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