Strategic orientations in a competitive context: The role of strategic orientation differentiation

Strategic orientation studies often provide ‘best practice prescriptions’ for firms in a given context—matching orientations to environmental conditions. While this perspective has value, empirical results are equivocal and an important reality has been overlooked: the fact that a firm’s decision to emphasize a particular strategic orientation can depend on its competitors’ orientation choices. Based on two studies of customer, technology and production orientations, we show that the emphasis a firm places on a strategic orientation depends on how competitive its environment is. When competition becomes less intense, firms place emphasis on the strategic orientation that matches the dominant environmental condition (e.g., technology orientation when technology turbulence is high). However, as competition intensifies, firms tend to follow strategic orientation differentiation: de-emphasizing the strategic orientation their main rival is emphasizing. Finally, we show that the greater the competitive intensity, the greater the contribution strategic orientation differentiation has on business performance. Copyright Springer Science+Business Media, LLC 2012