Market orientation, strategic flexibility, and performance: implications for services providers

Purpose – This article proposes investigating implications for service providers who adopt a market orientation. It hopes to extend current thinking by integrating market orientation and market‐focused strategic flexibility. Design/methodology/approach – A model is extended to apply to services marketing. The “strategic wheel of service performance” provides a framework to discuss the managerial implications from integration of market orientation, strategic flexibility, competitive advantage, and service performance. Findings – The impact of developing a market orientation should be higher levels of customer relationship marketing (CRM), retention, satisfaction, loyalty, and lifetime value (LTV). Increases in one or more of these interrelated variables should help service providers improve their judgmental and objective performance. Research limitations/implications – More research needs to be conducted to expand the market orientation philosophy to the service provider. Subjecting the framework to analytic rigor would allow scholars and practitioners to understand more fully the inter‐relatedness of the service implications. Practical implications – Practice implications of the paper are: the service economy is an opportunity to practice market orientation; investments in customer profitability, retention, and loyalty programs pay dividends; A market orientation enhances financial and strategic performance; integration of principles across organizational boundaries requires a long time; financial and strategic business performance criteria need to be quantified; cross‐functional customer feedback mechanisms need to be designed; and market orientation must be integrated across all service function providers. Originality/value – The conceptual framework integrates market orientation, market‐focused strategic flexibility, strategic competitive advantage, and subjective and objective performance outcomes as applied to service providers. The discussion strengthens the strategic value of market orientation and provides managerial implications for the services sector.