Market Orientation and Company Profitability: Further Evidence Incorporating Longitudinal Data

43 Pages Posted: 14 Sep 2013

See all articles by John Dawes

John Dawes

University of South Australia - Ehrenberg-Bass Institute

Date Written: September 10, 2000

Abstract

This study examines the association between market orientation and company profitability. It incorporates two methodological approaches that have generally not been used in previous research. First, it uses lagged company and environmental control variables in the data analysis, to better discern their effects on profitability and hence, clarify any relationship between market orientation and performance. Second, it analyses the individual components of market orientation and their relationships with business profitability separately. The study finds that of the components of a market orientation, a competitor orientation emerges as the variable with the strongest association with performance. This association is robust in two models, one with solely cross sectional data, and the other with lagged control variables. In simple terms, the strongest distinguishing feature of high-profit firms in this study is that they are very attuned to the activities and characteristics of competitors. For managers, this reinforces the view that while a customer orientation is vital, competitor intelligence activities may also be a key factor in ensuring high performance. The implication for researchers is that each component of market orientation should not necessarily be assumed to have equally strong associations with profitability.

Keywords: Market Orientation, Company Performance, Competitor Orientation

JEL Classification: M31

Suggested Citation

Dawes, John, Market Orientation and Company Profitability: Further Evidence Incorporating Longitudinal Data (September 10, 2000). Australian Journal of Management, Vol. 25, No. 2, 2000, Available at SSRN: https://ssrn.com/abstract=2323983

John Dawes (Contact Author)

University of South Australia - Ehrenberg-Bass Institute ( email )

GPO Box 2471
Adelaide, 5001
Australia

HOME PAGE: http://www.johndawes.info

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
62
Abstract Views
651
rank
385,864
PlumX Metrics