Market orientation and innovation: an inter‐relationship analysis

Abstract

PurposeMarket orientation analyses have focused on two broad‐ranging approaches: the behavioural and the philosophical. The concepts of innovation and market orientation are gaining ground steadily in the context of an increasingly competitive and highly volatile environment, subject to the pressures of rapid‐changing customer needs and desires. This premise underlies the general aim of this study, which is to determine to what extent companies operating in the same sector and with similar market orientation are similarly concerned about innovation.Design/methodology/approachThe population for this study comprises the leading 465 textile companies operating in Spain, listed in the ARDAN database. Data were gathered from in‐depth personalised interviews with 17 company directors operating within the textile sector. In order to verify the hypotheses, groups with similar market orientation were identified using a combination of two techniques: multidimensional scaling analysis; and cluster analysis. After this, ANOVA was used to characterise each group.FindingsThis study of the textile sector, and more specifically of its leading companies, enables one to conclude that market orientation and innovation are not isolated fields. First, four groups of firms which differ significantly in their commitment to market orientation have been found. Second, although a direct relationship between market orientation and innovation could not be statistically proved, some tools and policies considered in the innovation scale are more heavily used by the firms more orientated to the market. Third, in the context of the traditional debate in the literature about the market orientation‐performance relationship, the results of this study support a positive relationship between these two concepts.Research limitations/implicationsThe limitation of the sample size should lead one to treat the final results with caution.Originality/valueThe concepts of innovation and market orientation are gaining ground steadily in the context of an increasingly competitive and highly volatile environment, subject to the pressures of rapidly‐changing customer needs and desires. In this sense, through this paper companies can observe how these two concepts are related in a particular industry and obtain some interesting implications.