Firm Performance among Internationalized SMEs: The Interplay of Market Orientation, Marketing Capability and Digitalization

Sanna Joensuu-Salo,Kirsti Sorama,Elina Varamäki,Anmari Viljamaa

doi:10.3390/admsci8030031

Sanna Joensuu-Salo, Kirsti Sorama + Show 2 more

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https://doi.org/10.3390/admsci8030031

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Abstract

The ability to internationalize has become a competitive necessity for many firms, and one important for survival and growth in the era of globalization. At the same time, digitalization is transforming the locus of entrepreneurial opportunities and entrepreneurial practices, thus offering new perspectives on internationalization. Internationalization requires marketing capability as well as market orientation. However, there is a gap in the literature exploring the interplay of digitalization, market orientation and marketing capability in the internationalization process. The objective of the present study is to improve our understanding of (1) the impact of market orientation, marketing capability and digitalization on firm performance among small- and medium-sized enterprises (SMEs) and (2) the differences in this impact between internationalized SMEs and SMEs operating only in domestic markets. The data were gathered from 101 Finnish SMEs in the wood-product industry, and analyzed with AMOS using path analysis. The results show that marketing capability mediates the effect of market orientation on firm performance. For internationalized firms, market orientation and marketing capability are crucial to their success in foreign markets. However, digitalization has no effect on firm performance with internationalized firms. With other firms, the effect is direct and significant.

Highlights

IntroductionThe ability to internationalize has become a competitive necessity for many firms, and one enabling survival and growth in the era of globalization (Raymond and St-Pierre 2011)
The ability to internationalize has become a competitive necessity for many firms, and one enabling survival and growth in the era of globalization (Raymond and St-Pierre 2011).The process of internationalization in small- and medium-sized enterprises (SMEs) is a learning process (Schweizer 2012) and requires bundles of capabilities
Previous research suggests that the effect of market orientation on business performance is positive across contexts characterized by varying levels of market turbulence, technological turbulence and competitive intensity (Kohli 2017)

Summary

Introduction

The ability to internationalize has become a competitive necessity for many firms, and one enabling survival and growth in the era of globalization (Raymond and St-Pierre 2011). The process of internationalization in small- and medium-sized enterprises (SMEs) is a learning process (Schweizer 2012) and requires bundles of capabilities. Previous research suggests that the effect of market orientation on business performance is positive across contexts characterized by varying levels of market turbulence, technological turbulence and competitive intensity (Kohli 2017). More research is needed to understand the interplay of market orientation and marketing capability in the context of internationalization. Digitalization is transforming the locus of entrepreneurial opportunities and entrepreneurial practices (Autio 2017), offering new perspectives on internationalization

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