| Summary: | During the last decade, a subject which has captivated the attention of marketing and strategy researchers is the concept of market orientation. This thesis examines empirically, the relationship between market orientation and business performance in the context of the machine tool industry based in the UK. A more comprehensive market orientation scale was redeveloped by conducting comparative analysis of three previously developed market orientation scales with a view to make it an industry specific measure. The unit of analysis used in the study is at individual firm level. In the analysis, it was discovered that there are four significan latent dimensions underlying market orientation. These dimensions were labelled as customer focus, competitors focus, customer satisfaction focus and marketing focus. Next, the influence of each dimension on performance was assessed. Findings suggest that customer focus and customer satisfaction focus have a stronger impact on performance than the other dimensions. It was also revealed that competitor orientation has a U-shape relationship with performance in the short term but a positive linear relationship in the long term. The findings caution against overemphasising competitive influences to the neglect of distinct capabilities of firms. In order to find out if the strength of relationship between market orientation-performance is moderated by environmental factors, it was learnt that the hypothesised relationship is stronger when market turbulence and technology turbulence is low; and competitive intensity is high. Managers could use the multidimensional conceptualisation to develop particular kinds of orientation required for better performance. Avenues for future research are also discussed
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