This research focuses on the effects that three different strategic orientations have on firm performance in the specific domain of retailing. The paper also aims to deal with the mediating role that innovation plays in this relationship.
Component analysis is used to find out which factors really build up each of the constructs involved. In order to analyze the convergence of the model a confirmatory factor analysis is performed by means of a structural equation model based on LISREL 8.54 technique.
From the 244 responses the results show that market driving proved to be a strong predictor of performance in addition to innovation acting as a mediator between strategic orientations in retailers and business performance.
In a future research it would be advisable to include supplier and customer perceptions of the strategic orientation carried on by retailing firms. The study of different innovation categories should also be enlarged. Furthermore, a wider sample that encompassed several countries and different retailers‐type strata could help to understand culture and industry depending factors.
Among the strategic orientations developed by retail firms, market driving (MD) proved to be better both in its direct influence on performance and by jointly developing innovations – to benefit from the role of innovation as a mediator between MD and performance.
Although there are many references in literature devoted to market orientation (MO), hardly any research has addressed before the role of MD as strategic orientation in the retailing industry – and consequently the relationship between MO and MD. Moreover, the paper researches the role of innovation – in a twofold perspective: innovation in management processes and product innovation – as a mediator between strategic orientations in retail firms and business performance.
