Nonlinear and complementary effects of responsive and proactive market orientation on firms’ competitive advantage

Abstract

PurposeThe purpose of this paper is to clarify how responsive market orientation (RMO) and proactive market orientation (PMO) create competitive advantage.Design/methodology/approachNonlinear and interaction effects are tested by applying hierarchical regression analysis to a sample of 272 Colombian manufacturing companies.FindingsThe results show that although market orientation promotes the competitive advantage of a business, both approaches – responsive and proactive – exhibit saturation effects and a positive interaction.Research limitations/implicationsThe main limitation of this study is the cross-sectional design and the use of a single source for data collection. It is suggested that future research includes different orientations combined with these two market orientations – responsive and proactive – for achieving competitive advantage. In addition, further studies could replicate this analysis for different environmental conditions.Originality/valueThis paper simultaneously evaluates the nonlinear and complementary effects of RMO and PMO. From a strategic standpoint, it presents an empirical confirmation of the familiarity trap, the failure trap and the positive effects of combining RMO and PMO.