The impact of marketing capability, operations capability and diversification strategy on performance: A resource-based view

Prithwiraj Nath*, Subramanian Nachiappan, Ramakrishnan Ramanathan

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

249 Citations (Scopus)

Abstract

Using resource-based view (RBV) of the firm as a theoretical backdrop; we aim to find out the relative impact of a firm's functional capabilities (namely, marketing and operations) and diversification strategies (product/service and international diversification) on financial performance. We hypothesize that this linkage depends on the firm's relative efficiency to integrate its resource-capabilities-performance triad. Using archival data of 102 UK based logistics companies, we find marketing capability is the key determinant for superior financial performance. This study highlights that a market-driven firm is likely to have better business performance than a firm focusing solely on operational capabilities. Also, firms are better off when they focus on a narrow portfolio of products/services for the clients and concentrate on a diverse geographical market. Our findings provide a new perspective to model a firm's functional capabilities and diversification strategy on its financial performance and offer a benchmarking tool to improve resource allocation decisions. Crown

Original languageEnglish
Pages (from-to)317-329
Number of pages13
JournalIndustrial Marketing Management
Volume39
Issue number2
DOIs
Publication statusPublished - 1 Feb 2010
Externally publishedYes

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