Executive Summary
Hultman, Robson, and Katsikeas investigate the issue of balancing the economic benefits gained through standardized product strategies with the performance gains achieved when adapting products to local conditions. The basic idea is that more than one product strategy potentially maximizes performance for exporters; it all depends on environmental conditions. The authors view contingency theory as the solution to the product adaptation–performance relationship. They maintain that achieving a high level of performance depends on whether firms are able to treat the environment as an exogenous variable and adjust product strategy to fit the macro-, micro-, and internal environments.
Hultman, Robson, and Katsikeas find evidence consistent with the notion that product adaptation is not of its own accord related to export performance. Likewise, tempting as product standardization is as a means of reducing costs, highly standardized strategies are unlikely to be inherently beneficial to exporters in general. The study identifies nine significant drivers of product adaptation: sociocultural environment, technological environment, market characteristics, marketing infrastructure, competitive intensity, stage of product life cycle, export commitment, scope of exporting experience, and duration of export venture. Most of these—namely, sociocultural environment, technological environment, marketing infrastructure, stage of product life cycle, scope of exporting experience, and duration of export venture—shape product strategy fit and its performance relevance.
The authors conclude that export venture contingencies are all important. Exporters would be well advised to monitor assiduously the contextual rationale underpinning the deeper customer penetration benefits of adaptation. On the one hand, managers need a holistic perspective because export product strategy formulation is a complex system that cannot be easily decomposed into a narrow set of macro-, micro-, and/or internal contingency factors. On the other hand, given the finite resources of exporters, product strategy should be generated from awareness that not all internal and external factors impede product strategy.
Initial results indicate that the attainment of fit with the external environment, and not the internal environment, is conducive to export performance. However, further analysis reveals that the individual constituents of the internal environment are just as influential in determining export performance as the external factors but that this effect is masked by offsetting factors (i.e., the firm’s scope and duration of exporting). Here, firms’ efforts to match the wide scope of experience with low adaptation seem to be ill conceived and counterproductive. The authors caution managers not to oversimplify their view of the contextual factors with which they wish to achieve fit.
Biography
Magnus Hultman is Lecturer in Marketing at Leeds University Business School, University of Leeds. He recently received a Ph.D. in industrial marketing from Lulea University of Technology. Though his research centers on export strategy and performance, he writes on a range of topics including electronic supply chain management, marketing communications, and brand management.
Matthew J. Robson is Professor of Marketing at Leeds University Business School, University of Leeds. He earned a Ph.D. at Cardiff University. His research interests focus on distribution channel relationships, cross-border interfirm collaborative strategies, and social and structural relationship governance and maintenance mechanisms. His research has been published in Journal of World Business, Industrial Marketing Management, International Marketing Review, Management International Review, Organization Science, and others.
Constantine S. Katsikeas is the Arnold Ziff Research Chair in Marketing and International Management at Leeds University Business School, University of Leeds. He holds a Ph.D. from Cardiff University. His main research interests lie in the areas of global marketing, strategic alliances, and competitive strategy. He has published widely in these fields and his articles have appeared in Journal of Marketing, Organization Science, Strategic Management Journal, Journal of International Marketing, Decision Sciences, Journal of International Business Studies, and other journals.
Journal International Marketing, Volume 19, Number 4, December 2009
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