Executive Summary
Lages, Silva, and Styles investigate how a set of capabilities (organizational learning, relationship, and quality capabilities) influences product strategy (product quality and product innovation) and export performance (relationship performance and economic performance). Using data collected from export and quality managers in the same firm, they find strong support for the capability–strategy–performance link. Two important managerial insights emerge from this study.
First, the results indicate that managers should invest in relationship management capabilities to improve product innovation and product quality, which in turn leads to export performance enhancement. Managers are encouraged to explore and strengthen low-cost capabilities, such as relationship capabilities, to survive and grow, particularly in a difficult economic environment. Although this applies to all settings, it is particularly relevant to the small and medium-sized enterprise context, in which firms often have limited resources on hand and must rely heavily on partners—particularly internationally. Firms that have established solid relationships with their importers are more likely to realize the full market potential of their products. In addition, the authors find that product strategy (i.e., both product innovation and quality) enhances exporter–importer relationships and, as such, indirectly contributes to the economic success of the channel relationship.
Second, the results indicate complex relationships between different product strategies and export performance measures. The authors reveal that though product quality is critical for improving different dimensions of relationship performance with the importer (e.g., the quality of the relationship, reputation, loyalty), both product innovation and relationship performance play a greater role in enhancing economic performance. Thus, a significant finding is that quality, though it is often considered the strongest determinant of export performance by managers, is not enough to ensure economic performance in export markets. This suggests that export managers and researchers are overly concerned with basic aspects of firm survival in the international arena, such as product quality, while overlooking critical determinants of international differential advantage, such as product innovation and relationship management.
In summary, the results provide support for the view that though product quality might be a qualifier in today’s global markets, product innovation plays a significant role in enhancing economic performance. Moreover, this study suggests that both relationship capabilities and relationship performance are critical determinants of economic performance. Thus, managers should invest in both product innovation and relationship management capabilities. Relationship capabilities enable firms to improve product innovation and product quality, which in turn leads to export performance enhancement.
Biography
Luis Filipe Lages (PhD, Warwick, UK) is Associate Professor of Marketing and International Business in the School of Economics and Management at the Universidade Nova Lisboa, Portugal. His research interests include international marketing, managerial reactions to past performance, measurement of intangibles, innovation/disinnovation strategy, and technology transfer to the market. His publications have appeared in Journal of International Business Studies, Journal of International Marketing, Journal of Business Research, International Marketing Review, International Business Review, and Industrial Marketing Management, among others. He sits on several editorial boards, including those of Journal of International Marketing and International Marketing Review.
Graça Silva is a Lecturer in the School of Economics and Management at the Universidade Nova Lisboa and is a Doctoral Researcher at Faculdade de Ciências e Tecnologia, Universidade Nova de Lisboa. Her research interests include quality management, innovation, and international marketing. She has published in International Business Review, International Journal of Quality & Reliability Management, and Total Quality Management.
Chris Styles (PhD, London, UK) is Professor of Marketing and Associate Dean at the University of Sydney, Australia. His research on exporting, international alliances, and international entrepreneurship has been published in Journal of International Business Studies, Journal of World Business, Journal of International Marketing, International Marketing Review, and International Journal of Research in Marketing, among others. He also sits on five editorial boards, including those of Journal of International Marketing, International Marketing Review, and British Journal of Management.
Journal International Marketing, Volume 19, Number 4, December 2009
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