Abstract
Research studies have differed over the importance of the relative emphasis of a customer versus competitor orientation in the development of a market orientation (Slater & Narver, 1994; Tajeddini, 2010). In this study, we assess whether the emphasis of one component over another of a market orientation is an important determinant of firm performance within the Illinois beef industry, specifically the cow-calf sector. Using a series of OLS regressions, we examine the importance of a market orientation, relative emphasis, learning, innovativeness, and a cost focus on firm performance in a sample of 269 beef farms. Our results suggest that firms should invest equally in awareness of both customer demands and competitor responses as opposed to a singular focus on one or the other. This result corroborates the findings of Slater and Narver (1994), while examining the relationship within a highly competitive, homogeneous market. Implications and directions for future research are also discussed.
Highlights
It has been suggested that firm performance is a function of market structure and the behavior of firms within the competitive landscape. Schumacher and Boland (2005) find that firm performance is largely dictated by industry choice while characteristics of the firm are important for only the best firms in a given industry
The purpose of this research was to examine the importance of a market orientation and the relative emphasis of a customer orientation across various value discipline strategies within the Illinois beef industry
Our findings support previous research which found that a market orientation and innovativeness contributed to firm performance (Han et al, 1998; Slater & Narver, 1995)
Summary
It has been suggested that firm performance is a function of market structure and the behavior of firms within the competitive landscape. Schumacher and Boland (2005) find that firm performance is largely dictated by industry choice while characteristics of the firm are important for only the best firms in a given industry. It has been suggested that firm performance is a function of market structure and the behavior of firms within the competitive landscape. Within the context of agriculture, many commodity markets resemble perfectly competitive markets with homogeneous products and low barriers to entry and exit. Producers often focus on improving production efficiency as they see this as their only means of improving financial performance. In environments where competition is based on the firm’s ability to be the low-cost provider of undifferentiated goods and services, Porter (1985) posits sustained success will depend on cost drivers such as economies of size, capacity utilization, technology adoption and organizational learning. Firms can find it difficult to achieve economies of size and scope. Firms may find themselves unable to clearly articulate a strategy for competing in highly competitive markets
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