Nonlinear and complementary effects of responsive and proactive market orientation on firms’ competitive advantage

Purpose: The purpose of this paper is to clarify how responsive market orientation (RMO) and proactive market orientation (PMO) create competitive advantage. Design/methodology/approach: Nonlinear and interaction effects are tested by applying hierarchical regression analysis to a sample of 272 Colombian manufacturing companies. Findings: The results show that although market orientation promotes the competitive advantage of a business, both approaches – responsive and proactive – exhibit saturation effects and a positive interaction. Research limitations/implications: The main limitation of this study is the cross-sectional design and the use of a single source for data collection. It is suggested that future research includes different orientations combined with these two market orientations – responsive and proactive – for achieving competitive advantage. In addition, further studies could replicate this analysis for different environmental conditions. Originality/value: This paper simultaneously evaluates the nonlinear and complementary effects of RMO and PMO. From a strategic standpoint, it presents an empirical confirmation of the familiarity trap, the failure trap and the positive effects of combining RMO and PMO.