Market orientation and incumbent performance in dynamic market

The extant literature suggests that performance may be a function of the degree to which market information is systematically collected, disseminated and responded to (i.e. market orientation). However, the majority of empirical research on the market orientation to performance relationship has focused on manufacturers and has not distinguished between incumbents and new entrants. Our study of incumbent firms involves the market orientation to performance relationship in the context of services in the growing and competitive Internet industry. We found that market orientation did not directly affect performance, nor did the interaction of market orientation and perceptions of new competitors. However, perceptions of traditional competitors directly affected performance and interacted with market orientation to affect performance.