Slater (2007) Strategic behavior, target market

Slater (2007) Strategic behavior, target market - J of the...

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ORIGINAL EMPIRICAL RESEARCH On the importance of matching strategic behavior and target market selection to business strategy in high-tech markets Stanley F. Slater & G. Tomas M. Hult & Eric M. Olson Received: 15 August 2006 /Accepted: 17 August 2006 /Published online: 3 February 2007 # Academy of Marketing Science 2007 Abstract Business strategy is fundamentally concerned with the actions required to create superior customer value in the firm s target markets with the ultimate goal of achieving superior performance. Marketing theory suggests that two critical marketing activities required to achieve this end are: (1) the adoption of appropriate strategic behaviors (i.e., customer-oriented, competitor-oriented, technology- oriented) and (2) targeting of the appropriate market segments (i.e., innovators, early adopters, early majority, late majority, laggards). This study builds on prior research which demon- strates that the strategic behavior firm performance relation- ship is contingent on the firm s strategy by examining this relationship in high tech markets and by considering the incremental contribution of appropriate target market selec- tion. Responses from 160 senior marketing managers in high- tech firms reveal strong support for our framework. Thus, this study provides useful guidance to executives and managers in high-tech firms regarding the steps that they should take to increase their probability of success. Keywords High-tech . Customer orientation . Competitor orientation . Technology orientation . Market segments . Business strategy . Performance Strategic market management requires understanding emer- gent market patterns and making decisions that lead to the creation of economic value (Dickson, Farris, &Verbeke, 2001 ). In this paper we present a study, conducted in high- tech markets, that examines the performance implications of matching strategic behavior, target market selection, and business strategy. The theoretical foundation for this study lies in evolu- tionary economics. Schumpeter ( 1934 ) proposed that macroeconomic equilibrium is perpetually destroyed by entrepreneurs innovations. A successful introduction of an innovation disturbs the normal flow of economic life because it forces some of the already existing technologies and means of production to lose their positions within the economy. Nelson and Winter ( 1982 ) focused on the issue of changes in technology and routines. They proposed that if the change occurs constantly in the economy, then some kind of evolutionary process must be in play. A consensus is emerging that the evolution of product- markets is the result of a confluence of a variety of market, technological, and competitive forces (Lambkin & Day, 1989 ). The strategy story here is exploration (technological innovation) followed by imitative market making followed by exploitation (cost or differentiation-based) (c.f., Dickson et al., 2001 ). Thus, the evolution that we envision is that Prospectors introduce new technologies into high-tech markets while Analyzers seek to understand the reasons for Prospectors
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