Market orientation and order of entry strategies: An empirical analysis

While the relationship between market orientation and business performance has been extensively investigated, the mechanisms by which market orientation contributes to performance are still not well understood. To fill this gap in knowledge of how order of entry would affect the relationship between market orientation and performance, this research provides a conceptual framework to link two disparate concepts, or research streams in the marketing/business strategy literature, market orientation and order of entry. Timing of entry has generated great attention (Green, Barclay, and Ryans 1995). Pioneering new markets is expensive and risky, but also potentially very rewarding. If pioneers have advantages in supplies, costs, information, product quality, product line breadth, distribution, and long-term market share (Robinson and Fornell 1985), firms may benefit from early entry. And if later entrants can leapfrog pioneers with superior technology, positioning, or brand names, firms could be better off entering late (Lieberman and Montgomery 1988). We posit that order of entry has an effect on the relationship between market orientation and performance. Positional advantage refers to a low cost and/or differentiation advantage vis-à-vis competitors (Porter 1985), and an overall cost edge is obtained by performing activities in the value chain at a lower cost than competitors while offering a parity product (Porter 1985). Competitive positional advantages can be broadly construed as cost leadership and differentiation advantages (Porter 1985). The research studies the mediating and moderating roles of order of entry and positional advantage in the relationship between market orientation and performance. The roles are important but could be dependent upon the size and level of development of the market or the economy. It is important to keep the market in mind when deciding the role of positional advantage and order of entry in a marketing plan