The Effect of Strategic Orientation on Market Performance: Study of the Mediators

  • Received : 2019.02.16
  • Accepted : 2019.04.05
  • Published : 2019.04.30


Purpose - This study investigates the effect of strategic orientation on market performance with emphasis on the mediative role of innovation capability, economic value and relational value in food producer companies. Research design, data, and methodology - In this descriptive study, a population of 244 managers and employees of Food industry companies in Tehran were investigated. The respondents filled a questionnaire on strategic orientation, innovation capability, economic value, relational value and market performance, during January to August 2018. Reliability and validity were evaluated by Cronbach's alpha coefficient and confirmatory factor analysis. To analyze the data, Spearman's correlation coefficient and structural equation modeling were used by SmartPLS software. Results - Effects of competitor's orientation and technology orientation on all three intermediary variables were positive and significant. The effect of customer orientation on innovation and economic value was positive and significant, but the effect of customer orientation on the value of the relationship was insignificant. Furthermore, entrepreneurial orientation has a positive and significant effect on innovation capability. The effects of three mediator variables on market performance are positive and significant. Conclusions - As the relationship between the mediator variables and market performance were positive and significant, companies should have a comprehensive plan of focus on strengthening these variables.


  1. Alteren, G., & Tudoran, A. A. (2016). Enhancing export performance: Betting on customer orientation, behavioral commitment, and communication. International Business Review, 25 (1, Part B), 370-381. doi:
  2. Boly, V., Morel, L., & Renaud, J. (2003). Towards a Constructivist Approach of Technological Innovation Management. In L. V. Shavinina (Ed.), The International Handbook on Innovation (pp.790-803). Oxford: Pergamon.
  3. Chen Y, Wang Y, Nevo S, Benitez-Amado J, & Kou G. (2015). IT capabilities and product innovation performance: The roles of corporate entrepreneurship and competitive intensity. Information & Management. 52(6), 643-57.
  4. Chrisman JJ, Chua JH, & Sharma P. (2005). Trends and Directions in the Development of a Strategic Management Theory of the Family Firm. Entrepreneurship Theory and Practice. 29(5):555-76.
  5. Covin JG, & Slevin DP. (1989). Strategic management of small firms in hostile and benign environments. Strategic Management Journal. 10(1), 75-87.
  6. Dehdashti shahrokh, Z., Mazlumi, N., & Taghavifard, M. T. (2016). Model of strategic orientations of the company and its effect on performance with the moderating role of environmental variables (Case study: Food Industry of Iran). Strategic Management Research, 22(61), 21.
  7. Emami L, & Namamiyan F.(2015) Investigating the Influence of Information Technology on Organizational Performance by Explaining the Role of Mediating Organizational Structure (Case Study: Employees of National Bank of Ilam City). Ilam culture, 48, 12-21.
  8. Gatignon, H., & Xuereb, J.-M. (1997). Strategic Orientation of the Firm and New Product Performance. Journal of Marketing Research, 34(1), 77-90. doi:10.2307/3152066
  9. ghazinouri, S., & ghazinouri, S. (2008). Extracting Solutions for Reforming the National Iranian Innovation System Based on Comparative Study of Selected Countries. Journal of Science and Technology Policy, 1(1), 16.
  10. Gonzalez-Benito, O., & Gonzalez-Benito, J. (2005). Cultural vs. operational market orientation and objective vs. subjective performance: Perspective of production and operations. Industrial Marketing Management. 34(8), 32-33.
  11. Hisrich, R. D., & Peters, M. P. (1998). Entrepreneurship. Boston: McGraw Hill.
  12. Jancenelle, V. E., Storrud-Barnes, S., & Javalgi, R. R. G. (2017). Corporate entrepreneurship and market performance: A content analysis of earnings conference calls. Paper presented at the Management Research Review.
  13. Kazem sheykhiyan, A., & Dustiyan, R. (2014). The Effect of Market Orientation, Organizational Innovation and Competitive Power on Financial Performance and Market Performance of Banks. Paper presented at the The First National Conference on Marketing Opportunities and Challenges, Tehran.
  14. Kiyan amiri, F. (2016). Investigating the Effect of Strategic Orientation on Organizational Performance with the Mediator of Innovation (Case Study of Tehran Teachers Engineering Companies). (MS), Ialamic Azad University, Najafabad.
  15. Khodadad, H. S., Khodami, S., & Moshabaki, A. (2015). Designing a Market Performance Model Based on Dynamic Marketing Capabilities with Operational Agility Approach. Management Research in Iran. 19(3), 29-34.
  16. Lau, C.-M., Yiu, D. W., Yeung, P.-K., & Lu, Y. (2008). Strategic orientation of high-technology firms in a transitional economy. Journal of Business Research, 61(7), 765-777. doi:
  17. Lin, K.-H., Huang, K.-F., & Peng, Y.-P. (2014). Impact of export market orientation on export performance: A relational perspective. Baltic Journal of Management, 9(4), 403-425. doi:doi:10.1108/BJM-03-2012-0012
  18. Llorens Montes, F. J., Ruiz Moreno, A., & Miguel Molina Fernandez, L. (2004). Assessing the organizational climate and contractual relationship for perceptions of support for innovation. International Journal of Manpower, 25(2), 167-180. doi:10.1108/01437720410535972
  19. Lawson, B., & Samson, D. (2001). Developing Innovation Capability In Organisations: A Dynamic Capabilities Approach. International Journal of Innovation Management. 5(3), 23-28.
  20. Maaloul, A., & Zeghal, D. (2015). Financial statement informativeness and intellectual capital disclosure: An empirical analysis. Journal of Financial Reporting and Accounting. 13(1), 66-90.
  21. Mazhari, M., & Rahmati, F. (2013). The Relationship between Strategic Orientation, Service Innovation and Market Performance. Paper presented at the International Management Conference, Challenges and Solutions.
  22. Morgan, R. E., & Strong, C. A. (2003). Business performance and dimensions of strategic orientation. Journal of Business Research, 56(3), 163-176. doi:
  23. Mulavi, M., & Nouzari shahriyari, M. (2016). The Effect of Strategic Direction on Organizational Performance with Emphasis on Innovation in Mahabad Municipality. Paper presented at the Fourth International Conference on Economics, Management, Accounting with a Value-creating Approach.
  24. Murray, J. (2012). Organisational innovativeness: The role of strategic orientation and environmental scanning. (Masters by Research). Retrieved from
  25. Nam, S. (2007). How innovation willingness influences the public organizational performance relationship: Developments in how stakeholders (external organizational factors) and internal management affect performance. The State University of New Jersey - Newark, United States - New Jersey.
  26. Narver, J. C., & Slater, S. F. (1990). The Effect of a Market Orientation on Business Profitability. Journal of Marketing. 54(4), 20-35.
  27. Nemati, R., & Farazja, M. (2016). Relationship between Customerism, Competitiveness, Innovationism and Costism and Marketing Capabilities with Organizational Performance) Case Study of Bushehr Province Manufacturing Companies. Paper presented at the Fourth International Conference on Applied Research in Management and Accounting.
  28. Noorolahi, S., Kafashpou,r A., & Hadadiyan, A. (2013). Investigating the effect of marketing capabilities on market performance due to the variable value creation for customer in the food industry of Toos industrial complex in Mashhad. Second National Conference on Modern Management Science; Gorgan.
  29. Papadas, K. K., Avlonitis, G. J., & Carrigan, M. (2017). Green marketing orientation: Conceptualization, scale development and validation. Journal of Business Research, 80, 236-246. doi:10.1016/j.jbusres.2017.05.024
  30. Rahimnia, F., & Sadeghiyan, S. H. (2011). Strategic orientation and success of exporting companies. Enterprise Resource Management Research, 1(1), 21-32.
  31. Rahimnia, F., & Sadjad, A. (2015). The Effect of Strategic Directions on the Performance of Companies Offered in Khorasan Science and Technology Park by Organizational Innovation. Journal of Innovation Management, 4(2), 27-32.
  32. Sabzevar, S., & Hosseinpour, M. (2017). Investigating the effect of market orientation on business performance through the role of business intelligence mediator. Paper presented at the The 5th International Conference on Advanced Research in Management, Economics and Accounting, Russa.
  33. Sahi, G. K., Gupta, M. C., & Lonial, S. C. (2018). Relating strategic market orientation and market performance: Role of customer value types. Journal of Strategic Marketing, 26(4), 318-338. doi:10.1080/0965254X.2016.1240215
  34. Taghva, M., Hosseini, B. S., & Falah, l. H. (2013). Influence of Information Technology Application on Organizational Performance and Competitive Advantage. Smart Business Management Studies. 2(5), 1-17
  35. Tanriverdi, H. (2005). Information Technology Relatedness, Knowledge Management Capability, and Performance of Multibusiness Firms. MIS Quarterly, 29(2), 311-334. doi:10.2307/25148681
  36. Terziovski, M. (2007). Building Innovation Capability in Organizations: An International Cross-Case Perspective. United Kingdom: Imperial College Press.
  37. Thompson, J. L. (1999). A strategic perspective of entrepreneurship. International Journal of Entrepreneurial Behavior & Research. 5(6), 79-96
  38. Tutar, H., Nart, S., & Bingol, D. (2015). The Effects of Strategic Orientations on Innovation Capabilities and Market Performance: The Case of ASEM. Procedia - Social and Behavioral Sciences, 207, 709-719. doi:
  39. Venkatraman, N. (1989). The Concept of Fit in Strategy Research: Toward Verbal and Statistical Correspondence. The Academy of Management Review, 14(3), 423-444. doi:10.2307/258177
  40. Yu, Y., Dong, X.-Y., Shen, K. N., Khalifa, M., & Hao, J.-X. (2013). Strategies, technologies, and organizational learning for developing organizational innovativeness in emerging economies. Journal of Business Research, 66(12), 2507-2514. doi: