The study of the market orientation of MNC subsidiaries in foreign markets has been generally limited. This paper, therefore, aims to assess the effects of market orientation on…
Abstract
Purpose
The study of the market orientation of MNC subsidiaries in foreign markets has been generally limited. This paper, therefore, aims to assess the effects of market orientation on performance and the factors affecting the utilization of market orientation by foreign subsidiaries.
Design/methodology/approach
Market orientation is operationalized within the context of the foreign market. Research hypotheses are tested using a sample of 168 Korean MNC subsidiaries operating in China and India, the two most giant emerging countries in the world.
Findings
The results show that market orientation performs an important function in foreign subsidiary performance. In addition, foreign subsidiaries, which possess superior technology advantages and maintain active network relationships with local key entities such as suppliers, distributors, customers, and governmental authorities, are shown to actively devote themselves to market orientation.
Originality/value
As this study is to address the influence of MNC subsidiaries' market orientation on their business performance in the emerging markets, the results are expected to make a contribution to the literature in the field of market orientation.
Details
Keywords
Yung‐Chul Kwon and Leonard J. Konopa
Focuses on characteristics of a host country′s market thatinfluence a firm′s entry mode choice of exporting versus producing inthat foreign country. A survey was conducted among…
Abstract
Focuses on characteristics of a host country′s market that influence a firm′s entry mode choice of exporting versus producing in that foreign country. A survey was conducted among US manufacturers who exported a given product to one country and locally produced the same product within another country. The host country′s market characteristics were described in terms of their business environment, production factors, and competitiveness of local competitors. The hypotheses tested indicated that the level of competitiveness of local competitors and availability of local production factors have a greater impact on the firm′s entry mode choice than a host country′s business environment factors.