Market orientation and business performance: Evidence from franchising industry

Abstract

This paper examines the relationships between top management factors, franchisor market orientation, competitive strategy, and business performance within the context of Korean franchisor companies. 156 food-service franchise firms provide the basis for this empirical investigation. Findings show that top management factors such as management emphasis and risk aversion can lead to market orientation. Franchisor market orientation was found to lead differentiation and cost strategies, which, in turn, increase financial and non-financial business performance. Also, market orientation directly increases financial and non-financial business performance. The context of the franchise industry differs from other industries, and this paper discusses the implications of these findings for researchers and managers in the franchise industry.