Strategic orientation is a topic of substantial discussion in business, particularly for smaller enterprises. The primary contention that is related to it is that through specific approaches, a company can improve its financial performance. The three aspects that are discussed in this paper are technology orientation, alliance orientation, and market orientation. A study by Al-Ansaari et al. (2015) came out recently that assessed the relationship between each of these items and the business performance of small and medium businesses in the UAE or, more specifically, Dubai. It concluded that, while the relationships between the first two and the dependent variable were insignificant, there was a positive association between market orientation and business performance. This paper will provide a critical overview of each of the three aspects of strategy and use them to analyze the findings of the study.
A technological orientation is an approach wherein the company aims to obtain and use new technologies for the development of new, superior products. The reasoning behind this method is that the new products will be superior to those of the competition in ways that can be challenging to match, creating an advantage and, therefore, improving performance. Solberg (2017) provides evidence of a strong association between technological orientation and success, claiming that in growth industries, businesses drive the market by capitalizing on new possibilities of which customers are unaware. However, the same considerations may also mean that in established industries, technology is less important than other aspects of the market, such as buyer needs and preferences. As such, while a technology orientation can be substantially beneficial to a business, the scope of the advantages it provides is dependent on the state of the industry.
An alliance orientation is an intention of forming partnerships with other companies to share information and use different methods of improving each other’s performance. Theoretically, such an approach can benefit the company by opening new markets for it and offering efficiency improvements in its operations. Nakos et al. (2019) find that alliances can help small and medium businesses expand internationally, serving as mediating factors for their performance. With that said, while collaboration may be beneficial globally, in the local arena, their benefits are likely to be more limited. Partnerships with companies in the same market are unlikely to create substantial new customer bases for the business that it could not access before. Moreover, the close degree of integration that is necessary to derive significant benefits from the cooperation between two firms can be too challenging to attain to justify the benefits.
The last aspect, market orientation, is an attitude of considering customers and competitors to develop strategies that are appropriate for the situation. According to Mahmoud et al. (2016), it benefits companies by letting them generate innovations and use them to improve their performance substantially. The usage of methods and products that are appropriate for the situation is highly likely to contribute to the success of the business’s products, improving performance. As such, most companies should aim to review the state of the market regularly and consider the development of responses to any new changes. The most problematic aspects, in this case, would be the accurate analysis of the situation and the development of interventions that capitalize on opportunities while avoiding threats. The other modalities of strategy can assist companies in making appropriate decisions in this matter, contributing to performance indirectly.
In light of this analysis, the results of the study can appear to be appropriate to the circumstances. Market orientation was the only aspect of strategy that had a significant relationship with the performance of the business because it is relevant in most or all cases. Al-Ansaari et al. (2015) used a sample of service and manufacturing companies, neither of which is likely to be highly dependent on technology. As such, the businesses’ technology orientation would not be relevant in this case, which would explain the weak relationship between it and performance. Lastly, though alliance orientation could be beneficial for manufacturing companies, the study’s findings imply that it is not highly relevant in the general context. Additional information would be required for a more detailed response, such as whether the firms operate locally or internationally.
Overall, the study that is considered in this paper provides results that are indicative of its local situation. The importance of market orientation is constant for most businesses, particularly smaller ones. However, technological and alliance orientations are more advantageous in some industries and companies than in others. The weak relationship that was found by the authors is likely indicative of the sample businesses’ position and specific field. As such, the finding does not mean that there is no reason for smaller firms to consider technological advancements or try to form alliances with other firms. Instead, they should consider their specific situations and circumstances and choose their strategies based on the results. The relationship between different approaches and market orientation warrants particular consideration, as they are likely to be substantial mediating factors.
References
Al-Ansaari, Y., Bederr, H., & Chen, C. (2015). Strategic orientation and business performance. Management Decision, 53(10), 2287-2302. Web.
Mahmoud, M. A., Blankson, C., Owusu-Frimpong, N., Nwankwo, S., & Trang, T. P. (2016). Market orientation, learning orientation, and business performance. International Journal of Bank Marketing, 34(5), 623-648. Web.
Nakos, G., Dimitratos, P., & Elbanna, S. (2019). The mediating role of alliances in the international market orientation-performance relationship of SMEs. International Business Review, 28(3), 603-612. Web.
Solberg, C. A. (2017). International marketing: Strategy development and implementation. Taylor & Francis.