Strategic Orientation: Market Changer or Market Defender?

Abstract

Within a dominant marketing ideology, a firm's strategic orientation is grounded in the exchange of value with potential and existing customers and collaborators. Beyond an overarching value exchange objective, what compels firms to change or not change their strategic orientation? This work explores what external entities influence a firm's strategic orientation, and how do firms interact with those entities? A dynamic framework is presented to articulate the effects of three broad forces (ideology, legitimacy, and criticism) on a firm's strategic orientation. Specifically, a firm's strategic orientation both influences, and is directly influenced by, marketing ideology (i.e., what marketing is) residing within the collective state of mind of the discipline's members (academics, practitioners, consultants, authors, and associations). Legitimacy expressed by a firm's stakeholders via a number of proxies (e.g., market share, stock value, brand equity) serves as a primary objective for firms and therefore influences strategic orientation. Finally, criticism (i.e., critical dialogue and conflict) originating from society at large, serves as a separate force of influence on a firm's strategic orientation, directly and via legitimacy. In an effort to articulate how firms interact with the market, we assert that strategic orientation may be captured by a 2 × 2 matrix characterizing a firm's orientation as response-based (low and high) and change-based (low and high). The dynamic nature of markets is captured in this matrix wherein firms can shift to/from a market changer from/to a market defender.