Abstract
The objective of this study was to explore how firm service innovation mediates market orientation and business performance. This paper begins with a literature review indicating the themes from which we developed our conceptual framework. Structural equation modeling based on a cross-section (n = 260) of 5 years of supply chain business data (2009–2013) in Greater China was conducted. We concluded that firm market orientation and service innovation exert significantly positive effects on business performance. In addition, the results supported our model that market orientation is mediated by the effect of service innovation on business performance. Market orientation and service innovation had a stronger combined effect on business performance than market orientation alone did. This paper provides implications for how firms can be more effectively synergized amid challenges and gain a competitive advantage in the global supply chain.
Highlights
Christopher (2000) suggested that a supply chain is a linkage of firms that engage in various activities and create valued products and services delivered through a conduit to the ultimate customers
According to the foregoing arguments, we propose the following: Hypothesis 2: Market orientation positively relates to service innovation
According to the foregoing arguments, we propose the following: Hypothesis 3: Service innovation positively relates to firm performance
Summary
Christopher (2000) suggested that a supply chain is a linkage of firms that engage in various activities and create valued products and services delivered through a conduit to the ultimate customers. The supply chain signifies several new challenges in the areas of cost performance, order fulfillment, and service agility This creates pressure for firms because they cannot always employ a conventional set of skills to generate business opportunities in the future. For this purpose, firms must transform competency into company-specific skills that are deeply rooted in the service chain and strategically valued for customer satisfaction throughout the market. To our knowledge, research exploring the mediating effect of service innovation on market orientation and business performance in supply chain businesses remains insufficient. From a value-chain perspective, the supply chain business in Greater China is an appropriate sample for validating the mediating effect of service innovation between market orientation and firm performance. This article has two primary objectives: (1) to fill the research gap by integrating a framework that links firm performance during market orientation and service innovation to performance; (2) to clarify the potential implications of service innovation for practice and how service innovation allows supply chain businesses to increase their competitiveness in the market
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