Strategic orientations and export market success of manufacturing firms: The role of market portfolio diversity

Abstract

Purpose

The purpose of this study is to investigate the association of international orientation and market orientation and their joint effects on export market success. Additionally, it aims to examine how firms’ foreign market portfolio diversity moderates this association.

Design/methodology/approach

On the basis of a review of the literature on market orientation and international orientation in relation to manufacturers’ performance on export markets, the paper proposes a set of hypotheses. The hypotheses are empirically tested using 249 questionnaire responses from CEOs supplemented with census data.

Findings

The results indicate that international orientation is positively related to export market success and that this relationship is independent of market portfolio diversity. The paper provides insights to the limitations of the dominant position that holds market orientation as an undisputed valuable strategic capability since market orientation has different non‐linear associations with export market success depending on market portfolio diversity. Finally, the results indicate that the joint effects of international orientation and market orientation on export market success only are present for firms with a focused market portfolio.

Research limitations/implications

The authors argue that the performance implications of different strategic orientations on export market success are context‐dependent and that firms’ market portfolio diversity assists in providing this nuanced insight. The study's empirical cross‐sectional setting limits inference about causality among the constructs.

Practical implications

While all exporting manufacturing firms may benefit from an international orientation, business practitioners are advised to pay particular attention to the diversity of their foreign market portfolio prior to allocating resources to market‐oriented activities.

Originality/value

In this empirical contribution, the authors show how international orientation explains performance differentials among manufacturing exporters as well as how market orientation positively moderates this relationship. Furthermore, the paper shows the context dependency of the value of firms’ market orientation on the basis of export market portfolio diversity.

Citation

Eibe Sørensen, H. and Koed Madsen, T. (2012), "Strategic orientations and export market success of manufacturing firms: The role of market portfolio diversity", International Marketing Review, Vol. 29 No. 4, pp. 424-441. https://doi.org/10.1108/02651331211242647