Download Change in international market strategy as a

Journal of Business Research 66 (2013) 2600–2611
Contents lists available at ScienceDirect
Journal of Business Research
Change in international market strategy as a reaction to performance decline☆
Luis Filipe Lages a,⁎, Jose Mata a, 1, David A. Griffith b, 2
a
b
Nova School of Business and Economics, Faculdade de Economia, Campus de Campolide, 1099–032 Lisboa, Portugal
College of Business and Economics, Lehigh University, 621 Taylor Street, Bethlehem, PA 18015-3117, USA
a r t i c l e
i n f o
Article history:
Received 1 May 2011
Received in revised form 1 November 2011
Accepted 1 May 2012
Available online 7 June 2012
Keywords:
International marketing
Strategic change
Competitive intensity
Adaptation/standardization
Local/global strategy
Organizational learning
a b s t r a c t
While a great deal of research has explored how international marketing strategy influences performance, researchers have paid scant attention to understanding changes to international marketing strategy resulting
from firm reaction to past performance. In this study, organizational learning theory addresses when and
how international marketing strategy will change. Employing data from over 500 exporters, the results,
which are consistent with theoretical predictions, indicate that (1) firms are generally not prone to inertia
and do, in fact, change their international marketing strategy when facing declines in performance, and (2)
that the direction of change depends on the level of competition in the specific foreign market, with firms
adapting their international marketing strategy in low competitive markets and standardizing their international marketing strategy in highly competitive markets. The paper includes implications for academics and
practitioners.
© 2012 Elsevier Inc. All rights reserved.
1. Introduction
International marketing strategy's influence on performance continues to be a focus of marketing researchers (Çavuşgil & Zou, 1994;
Kaleka, 2011; Morgan, Kaleka, & Katsikeas, 2004). While research
provides insights into international marketing strategy's influence
on performance, little is known about the factors affecting international marketing strategy. Although mounting evidence exists that
past performance stimulates strategy change, a result of managers' efforts to learn from, and respond to, performance feedback (Burgelman
& Grove, 2007; Iyer & Miller, 2008), limited research examines this
issue (Lages, Jap, & Griffith, 2008; Lages, Lages, & Lages, 2006; Lages
& Montgomery, 2004). More importantly, no study examines the impact of past performance change on international marketing strategy
change.
☆ An earlier version of this paper received the IMR Award for the best paper on international marketing at the Academy of International Business 2009. The authors thank
the editor and two anonymous JBR referees, referees from AIB 2009 and Academy of
Management 2010 conferences, as well as Chris Ahmadjian, Daniel C. Bello, John
Cadogan, Miguel Pina e Cunha, Violetta Gerasymenko, Costas Katsikeas, David Montgomery, John Huffstot and Jose Tavares for comments on earlier versions of the manuscript. This research was supported by Nova Forum and FCT- Fundação para a Ciência e
a Tecnologia, Portugal.
⁎ Corresponding author. Tel.: + 351 21 380 1600; fax: + 351 21 388 6073.
E-mail addresses: lfl[email protected] (L.F. Lages), [email protected] (J. Mata),
griffi[email protected] (D.A. Griffith).
URL: http://www.lflages.com (L.F. Lages).
1
Tel.: + 351 21 380 1653, + 351 21 380 1600x1347; fax: + 351 21 387 0933.
2
Tel./fax: + 610 758 4743.
0148-2963/$ – see front matter © 2012 Elsevier Inc. All rights reserved.
doi:10.1016/j.jbusres.2012.05.018
This perspective (i.e., viewing international marketing strategy
change as a consequence of performance rather than merely as an antecedent of performance) can help to understand a number of important issues related to when and how international marketing strategy
changes. For example, do firms facing declining performance change
their international marketing strategy or does inertia urge them to
stay the course of their established strategy? If they do undertake
change, do their foreign market strategy become more or less similar
to the one they employ in their domestic market? And, more importantly, does competition in foreign markets influence how international marketing strategy changes? If yes, in which way? To address
these questions the present study draws on organizational learning
theory, which contends that managers look to past performance as
a signal of success or failure in order to determine managerial action
(Cyert & March, 1963; Levinthal & March, 1981).
This study contributes to the international marketing literature in
two manners. First, this study deepens the understanding of when
international marketing strategy change occurs (examining the relationship of changes in past performance to international marketing
strategy). The research extends the literature pertaining to organizational learning theory by demonstrating that changes in past performance can be an important antecedent of international marketing
strategy change. Second, the present investigation reveals how changes
in international marketing strategies take place by specifying how firms
change their international marketing strategy (i.e., strategy standardization or adaptation) in a foreign market when responding to competitive intensity (i.e., the degree of competition a firm faces in a specific
market (Çavuşgil & Zou, 1994; Porter, 1980)). This is important as
there has been some disagreement as to whether the level of competition
L.F. Lages et al. / Journal of Business Research 66 (2013) 2600–2611
in a foreign market increases or decreases a firm's desire to standardize
its offering. For example, while James and Hill (1991) argue that firms
are more likely to standardize their offerings when operating in less
competitive markets, Aulakh, Kotabe, and Teegen (2000) argue that a
lack of competition in a market allows a firm to incur the higher costs
of meeting the needs of the local market. By advancing knowledge in
these areas, this study enhances academic understanding while also
providing guidance to the practicing international marketing manager.
2. Background literature
2.1. Organizational learning theory
Researchers in strategy recognize the importance of past performance as an antecedent to strategy (Cyert & March, 1963; Lant, 1992;
Lant, Milliken, & Batra, 1992; Levinthal & March, 1981). For example,
researchers suggest that past performance influences subsequent organizational change when managers learn from and react to performance
feedback (Boeker, 1997; Burgelman & Grove, 2007). Performance failure is a powerful motivation for managers to react without delay in
launching improved versions of products or changing prices, in order
to provide greater value to consumers (Miller & Chen 1994). Consistent with this logic, the argument that Western companies focus on
the short term (Doyle, Saunders, & Wong, 1986) reiterates the notion
that changes in performance serve as a stimulus to managerial action.
Organizational learning theory argues that managers have clearly
defined performance goals, which they compare to performance outcomes (Lant, 1992; Lant et al., 1992). This comparison effects success
or failure (Cyert & March, 1963; Levinthal & March, 1981), which in
turn influences managerial action (Lant & Mezias, 1992; Levitt & March,
1988). As such, organizational learning theory focuses on a process of
trial and error (e.g., Sullivan & Nonaka, 1986) in which managers work
to identify associations between behaviors (e.g., strategies) and outcomes
(e.g., performance) (Cyert & March, 1963; Levinthal & March, 1981).
With this perspective, the prior strategy serves as the foundational
reference point for making adjustments.
However, challenges exist regarding the application of organizational
learning theory in the business domain. Specifically, researchers find that
managers may be subject to the threat of inertia (cf., Miller, 1994). Inertia
resists fundamental reorientations in policy (Hinings & Greenwood,
1988). When subject to inertia, managers retain their strategies in the
face of deteriorating performance. To examine whether managers
employ organizational learning or are subject to inertia, the current
research looks at whether or not managers adjust strategy when
experiencing declines in performance.
2.2. International marketing strategy
The extent to which firms adapt or standardize their strategies when
they operate in foreign markets is central to the field of international
marketing strategy (Çavuşgil & Zou, 1994; Katsikeas, Samiee, &
Theodosiou, 2006; Lages, Abrantes, & Lages, 2008; Schilke, Reimann, &
Thomas, 2009). The arguments for and against standardization of international marketing strategy primarily derive from the differences in
perspectives about how to maximize firm returns. Specifically, those
supporting standardization argue that the firm can achieve a greater return by realizing cost savings gained through economies of scale across
markets (cf., Levitt, 1983; Ryans, Griffith, & White, 2003). Alternatively,
those supporting adaptation contend that firm returns will be greater
through the enhancement of value delivery in the market by adapting
the firm's strategy to local market needs (cf., Çavuşgil & Zou, 1994).
However, opting for one or the other is not a simple binary strategy decision. The decision has something to do with the degree to which a firm
standardizes or adapts its marketing strategy in a specified market in relation to a baseline comparison, e.g., the firm's domestic market strategy
2601
(Çavuşgil & Zou, 1994; Lages, Abrantes, & Lages, 2008, Lages, Jap, &
Griffith, 2008; Ryans et al., 2003).
A vast array of operational strategies exists regarding adaptation
and standardization (e.g., Schilke et al., 2009; Sousa & Lages, 2011).
Consistent with Brouthers, Werner, and Matulich (2000), the current
work builds on the price–quality relationship to capture a firm's generic
international marketing strategy, focusing on the trade-off between
price and quality, in which perceived value can increase by lowering
price or improving product quality (Doyle, 2000). This approach allows
us to examine the degree of consistency of the firm's price–quality strategy in its foreign market in comparison to its domestic market.
3. Hypotheses
3.1. Reacting to declining performance
Organizational learning theory contends that managers look to
past performance as a signal of success or failure, which then serves
as a guide to determining managerial action (Cyert & March, 1963;
Lant, 1992; Levinthal & March, 1981). Building on this belief, when
managers meet or exceed performance goals (i.e., performance from
one period to the next remains the same or increases) managers continue to employ their current strategy. The logic underlying this notion
is that managers believe that their identification of the underlying associations in the market that drive performance is correct and that their
strategy to stimulate desired outcomes is effective.
In contrast, erosion of performance challenges managers' earlierheld beliefs about the accuracy of prior causal associations (i.e., if the
prior associations between strategy and performance had held, then
performance should not have declined). Managers react to declining
performance by recognizing that their prior associations may no longer
hold, demanding changes in strategy, as a result (March & Simon, 1958).
For example, organizational learning theory suggests that when discrepancies between expected and actual outcomes occur, managers
become less satisfied with their performance and grow more amenable
to risk-taking (Lant & Montgomery, 1987). Furthermore, performance
downturns stimulate managers to consider more alternatives, calling
for environmental scanning and the analysis of past decisions in an attempt to infer which actions perhaps led to the poorer results (Boeker,
1997; Cyert & March, 1963). Managers then combine the information
they obtain with their own heuristics of the strategy to performance
relationship, placing greater emphasis on the strategies that they believe to be performance-enhancing (Lant, 1992; Lant & Mezias, 1992).
Given these arguments, we hypothesize:
H1. Firms whose performance declines change their international
marketing strategy more often than those whose performance does
not decline.
3.2. The moderating role of competitive intensity
If firms do in fact react to performance declines through a change
in international marketing strategy, the question remains as to how
they adjust their strategy. The literature indicates that competitive
intensity may influence a firm's international marketing strategy
adaptation/standardization (Katsikeas et al., 2006; Morgan et al., 2004).
Competitive intensity is the degree of competition a firm faces in a
market, and is directly related to the activities of competing firms
(Çavuşgil & Zou, 1994; Porter, 1980). We argue that competitive intensity moderates the relationship between a decline in performance and
greater standardization or greater adaptation.
Porter (1980) notes that competition in an industry drives down
the rate of return toward the competitive floor rate of return. In markets of higher competition, customers have more options to serve
their needs, increasing the difficulty of customer retention (Kohli &
Jaworski, 1990). As a result, firms must strive to lower their overall
2602
L.F. Lages et al. / Journal of Business Research 66 (2013) 2600–2611
cost structures in order to maintain performance levels (due to
heightened price competition and lower margins per unit). This logic
suggests that managers observing falling performance coupled with
higher levels of competitive intensity in a specific foreign market, leverage economies of scale to drive down their per unit cost via the
implementation of a more standardized strategy (cf., Samiee & Roth,
1992).
Alternatively, in foreign markets where competition is less intense, firms need not compete as fiercely for sales revenue (James &
Hill, 1991). In such markets one could argue for or against adaptation.
For instance, one could argue that low competition makes firms less
conscious of being competitive, which is then reflected in less adaptation to the market (James & Hill, 1991). While this is reasonable, we
believe that a stronger argument can be made in that the lack of competition affords firms higher profit margins, which allows them the
opportunity to experiment with their strategy in order to more effectively meet local market needs by adapting to the local market. This
logic is consistent with that of Aulakh et al. (2000), who note that
in situations of lower competition firms can work to present alternatives to increase the value offer to the final consumer. The first mover
argument also supports this logic, whereby first movers work to define the needs of the market, creating high switching costs, which in
turn creates a competitive barrier in the market (Lieberman &
Montgomery, 1988). Given these arguments, we hypothesize:
H2. Firms respond to a decline in performance by making their international marketing strategy more standardized in high more often
than in low competitive export markets.
H3. Firms respond to a decline in performance by adapting their international marketing strategy to the foreign market in low more
often than in high competitive export markets.
4. Methods
4.1. Research context
Data were gathered via a self-administered questionnaire sent to
Portuguese exporters. Portuguese exporters provide an excellent context, as the country's small size makes exporting an important business
activity. For Portugal, exporting is particularly important because of the
access to opportunities for scale economies, specialization, and access
to technology (Organization for Economic Co-operation and Development, 2008).
4.2. Pre-test
Before conducting the survey, the authors pre-tested the questionnaire in three stages: first, refining the English version of the survey instrument and cover letter, by developing the initial survey
format with preexisting measures from the literature. Second, the
instrument was translated and back-translated. To avoid errors, a different researcher translated the questionnaire into English. During
this stage, four Portuguese judges (researchers at different universities) assessed the content and face validity of the items. Third, the revised instrument was reviewed with 15 managers involved in export
operations to assure alignment with managerial views and interests
(Madsen, 1998) and comprehension of the measures.
4.3. Data collection
The database of the Portuguese government's export promotion
agency randomly generated a sample of 2500 firms, with individuals responsible for foreign operations identified. The individuals thus identified
received by post a questionnaire and international postage-paid business
reply envelope. The cover letter asked that survey be completed by the
person most involved with the daily administration of the main export
venture. After four weeks a follow-up survey packet went out to nonrespondents. To enhance the response rate, the authors offered respondents a list of potential importers or clients in the respondents' main destination market.
Of the 2500 questionnaires, 29 respondents returned information
indicating that they no longer exported, and the post office returned
119 questionnaires as undeliverable. These firms had either ceased
operations or had no forwarding information. The sample size thus
fell to 2352. Of these, 519 usable questionnaires were returned, for
a 22% response rate.
In order to increase variance and generalizability of the results, we
considered exporters in multiple industries and regions. The Portuguese
exporting industry comprises mostly small to midsized firms. Of the
firms in the sample, 27% had sales below €1.5 million, 34% had sales between €1.5 million and €5 million, 31% had sales between €5 million
and €35 million, and 8% had sales over €35 million. With regard to the
number of employees, 19% had fewer than 20, 27% had between 20
and 49, 22% had between 50 and 99, 27% had between 100 and 500,
and 5% had more than 500 employees. More than 75% of respondents
reported on ventures with other European countries. Respondent
firms had significant international experience: 22% had 2 to 7 years,
39% had 8 to 15 years, 26% had 16 to 30 years, and 13% had more than
30 years.
Respondents held positions such as president, marketing director,
managing director, and exporting director. Of the respondents, 83% indicated that they had been responsible for the exporting operations of their
firm for more than three years. Respondents also indicated their degree of
experience in exporting on a five-point scale (1=none; 5=substantial).
The mean response was 3.6 (SD=.84). These data indicate that all respondents have significant knowledge in the specific exporting activities
of the firm and are experienced with exporting in general.
Assessing the differences between the early and late respondents
with regard to the means of all the variables (a test for non-response
bias) reveals no significant differences, suggesting that nonresponse
bias is not a significant issue. Early respondents are the first 75% of the
returned questionnaires, with late respondents the remainder. These
proportions approximate the actual way the questionnaires were
returned.
4.4. Measurement issues
Table 1 shows descriptive statistics and correlations of the measures. Appendix A provides measurement details.
4.4.1. International marketing strategy
Consistent with earlier research (i.e., Brouthers et al., 2000), the
current research uses the price–quality relationship to capture a
firm's strategy. This relationship reflects the trade-off between price
and quality, in which perceived value can increase by lowering
price or improving product quality (Doyle, 2000). Three viable strategies emerge from the price–quality relationship: economy (low price
and low quality), value (low price but high quality), and premium
(both high price and high quality) (Brouthers et al., 2000). Plotting
price and quality choices on a two-dimensional chart and drawing a
“value line” between “compatible” prices and qualities, strategies
above this line should define good value, and strategies below should
reflect poor value (Doyle, 2000, p. 279). Price–quality strategy changes
from 1 year to the next are of special concern here, as is whether or not
the international marketing strategy in the export market is becoming
more or less similar to the strategy in the domestic market.
4.4.2. Export performance
Export performance attracts continuous attention in the business
literature (Ahmed, Mohamed, Johnson, & Meng, 2002; Hortinha, Lages,
& Lages, 2011; Kaleka & Berthon, 2006; Lages, Abrantes, & Lages, 2008,
L.F. Lages et al. / Journal of Business Research 66 (2013) 2600–2611
2603
Table 1
Descriptive statistics and correlations among independent, control, and moderating variables.
1
2
3
4
5
6
7
Change in export performance
Export market competition
Export performance level
Export performance clearly identified
Adaptation of international strategy
International experience
Total sales value
Mean
Std Dev
Min
Max
1
0.07
3.86
0.03
3.36
2.37
2.54
4.70
1.00
0.87
0.97
1.09
1.30
1.21
1.42
− 2.51
1.00
− 2.51
1.00
1.00
1.00
1.00
2.05
5.00
2.54
5.00
5.00
5.00
8.00
0.07
0.09
0.16
0.03
0.07
0.18
**
***
*
***
2
3
4
5
6
0.09 **
0.02
0.04
0.08 *
0.04
0.07
0.04
0.18 ***
0.08 *
0.10 **
0.13 ***
0.02
0.05
− 0.03
0.23 ***
Variables 1 and 3 are an aggregate score of 13 items (see Appendix A). ***, ** and * denote significance at the 1%, 5%, and 10% levels (two-sided tests) respectively.
Lages, Jap, & Griffith, 2008; Naidu & Prasad, 1994; Sousa & Bradley,
2008). The international marketing strategy literature indicates that
export performance is a complex (e.g. Diamantopoulos & Kakkos, 2007;
Katsikeas, Leonidou, & Morgan, 2000) and multi-faceted phenomenon
(e.g. Lages, Silva, & Styles, 2009; Lages, Silva, Styles & Pereira, 2009).
Whereas some authors argue for grouping indicators into constructs
to capture overall performance (Katsikeas et al., 2000), others maintain
that researchers should analyze performance variables at the individual
level (Hult et al., 2008). The current study considers multiple dimensions of export performance and three general dimensions: export intensity, export achievement, and export satisfaction, all of which
reflect performance levels and changes to these levels. Export intensity
refers to the proportion of production output to exports, measuring the
percentage of exports to the firm's total sales and profits (Katsikeas et
al., 2000). Export performance achievement is the extent to which
firms achieve their export objectives regarding different measures,
such as sales volume (unit sales), sales revenue, profitability, market
share, and overall performance. Finally, satisfaction is a psychological
variable (an affective state) with respect to the exporting activity (cf.,
Diamantopoulos & Kakkos, 2007). The measures of satisfaction in the
present study account for satisfaction with export sales volume, sales
revenue, profitability, and market share, as well as overall performance.
4.4.3. Competitive intensity
Competitive intensity is the degree of competition a firm faces in a
specific export market (Çavuşgil & Zou, 1994). Following Çavuşgil and
Zou (1994) this study measures managerial perception of the extent
to which competition exists in the specific foreign market.
4.4.4. Control variables
To minimize spuriousness, five control variables are used. The first
control variable is the export performance level in the year before performance change occurred. Thus, in each regression, along with each
measure of performance change (between years t‐2 and t‐1), the
corresponding measure of export performance level in year t‐2 appears.
The literature reveals that a frequent problem in exporting firms is
that company reports rarely differentiate between domestic and export
operations (Yang, Leone, & Alden, 1992). Thus, the second control variable identifies whether the export data are clearly identifiable vis-à-vis
domestic performance.
The third control variable identifies the type of marketing strategy
used before the period under analysis. According to Zajac and Shortell
(1989, p. 416), “the likelihood of an organization's changing its strategy may potentially be a function of an organization's prior generic
strategy.” Although this study controls for prior strategy, the reader
should bear in mind that firms employing an extreme strategy cannot
change their strategy in the same direction.
The fourth control variable is the degree of international experience
(La, Patterson, & Styles, 2009). International experience tends to be a
primary source of organizational learning (Hutzschenreuter, Pedersen,
& Volberda, 2007). The degree of international experience of people
involved with the export venture, such as having lived and worked
abroad, provides a broad knowledge base and cultivates self-confidence,
both of which bring diversity of insight(s) to deal with complex issues
of strategy adaptation to the foreign market.
The fifth control variable is total sales value. The study includes
this because larger firms tend to be more susceptible to inertia (less
likely to alter strategies) than smaller firms (Audia & Greve, 2006).
4.4.5. Common method bias
To minimize common method bias the study engages both of the
procedural remedies that Podsakoff, MacKenzie, Lee and Podsakoff
(2003) suggest, as well as ex post empirical testing. The procedure
includes four tactics: (1) to minimize measurement context effects—
the use of paper-and-pencil questionnaires as opposed to face-toface interviews, (2) to minimize common rater effects—protection
of respondents' anonymity in order to diminish apprehension, and
the assurance that no right or wrong answer exists, (3) to minimize
item characteristics effects—simple, specific, and concise items, and
(4) to minimize correlation effects—respondents were not aware of
the study's conceptual model.
Empirically, the study employs three ex post approaches to assess
common method bias. First, we carefully examined the correlation
matrix for suggestions of multicolinearity. The lack of highly correlated
constructs (see Table 1) suggests that common method bias is minimal.
Second, Harman's one factor test was used—finding a very poor fit for
the single-factor model, suggesting an absence of common method
bias. Third, in light of concerns about the rigor of Harman's one-factor
test (cf., Podsakoff et al., 2003)—recourse to objective data for comparison purposes.
The survey gathers subjective information on the evolution of export
performance with respect to (1) achievement, (2) satisfaction, and
(3) intensity of exporting activity to total activity. For each of these
dimensions the study assesses two items: sales volume (unit sales)
and sales revenue. The study also draws upon objective data from annual
reports and compares these to the survey responses. Unfortunately, due
to the make-up of the sample (public and private firms), such data were
available for only a limited subsample, and even for these firms, the objective data refer to the overall firm, as opposed to the specific export
venture. However, since the survey also collects information on sales
and employment at the firm level, a comparison is possible between
the questionnaire responses and the objective data.
Compilation of data on sales and employees utilizes 8 and 6 point
interval measures, respectively. Coding of the sales and employment
data from the annual reports uses the same intervals, revealing correlations between the subjective and objective measures of 0.86 and
0.93, respectively (sample sizes of 155 and 82).
In addition, while objective data on the firms' export ventures
were unavailable, Table 2 reveals that the correlations between the
objective percent growth in overall firm sales and the corresponding
perceptual export-venture sales performance items are positive and
significant, and increase considerably when restricted to firms for
which the export venture accounts for at least 60% of total firm sales
2604
L.F. Lages et al. / Journal of Business Research 66 (2013) 2600–2611
Table 2
Post hoc performance metrics.
Performance variable
Achievement of export sales
volume
Achievement of export sales
revenue
Satisfaction with export sales
volume
Satisfaction with export sales
revenue
Export sales volume intensity
Export revenue intensity
All firms (127)*
Firms for which the export
venture accounts for at least
60% of firm sales (35)
0.31
0.73
0.32
0.63
0.25
0.73
0.25
0.64
0.23
0.23
0.61
0.58
Table 3
The impact of past performance change on foreign market strategy change (using a 13item aggregated measure of global export performance change).
(1)
change in export performance
Strategy in the foreign
market becomes more
standardised with the change in export
performance in low
domestic market
competitive markets
change in export
performance in highly
competitive markets
export market competition
export performance level
*Note: Sample sizes are 124 and 126 for the intensity measures. All correlations are
statistically significant at all conventional levels.
export performance clearly
identified
adaptation of strategy
international experience
value. Considering the procedural and empirical approaches together
suggests that common method bias is minimal.
total sales value
constant
5. Analysis and results
5.1. Analysis approach and variable treatment
The variable of interest is an indicator taking three possible values
of whether the firm changed its international marketing strategy, and
the goal is to investigate whether the observed change relates to the
observed change in prior performance. Because the wish is to measure the influence of the covariates on the different directions of
change, the study uses a multinomial logit model, in which the reference category is the “no-change” case. Thus, the reported coefficients
indicate whether changes in one specific covariate changed the probability that the firm's export market strategy becomes more (or less)
adapted, depending on the equation.
The measure of change in strategy was a categorical variable taking
three possible values: (1) whether the firm marketing strategy became
more adapted to the foreign market between year t and year t‐1 (15% of
the firms in the sample), (2) whether the strategy did not change (74%),
and (3) whether the strategy became less adapted to the foreign market
(i.e., became more standardized) (11%). The use of a 1-year period to assess strategy and performance is a well-established approach in strategy research (McDonald & Westphal, 2003).
For testing the robustness of the findings, the current study uses
three different approaches of performance measurement: total item aggregation, intermediary aggregation, and total disaggregation (Bagozzi
& Foxall, 1996). The survey yields 13 performance change items. In
the most aggregated approach, these 13 items convert into a unique factor score of “global export performance change” (for operationalization
of the variables, see Appendix A). In an intermediary aggregation approach, the 13 individual items divide into three groups of performance
change factors: export performance achievement (factor score of 5
items), export performance satisfaction (factor score of 5 items), and
export intensity (factor score of 3 items). Finally, in the most disaggregated approach, the 13 items act individually.
5.2. Results
Table 3 reports the regression results using an all-inclusive aggregate measure of export performance. The top panel of the Table
shows the influence of the independent variables upon change to a
more standardized marketing strategy, and the bottom panel shows
the corresponding impact upon change to a more adapted marketing
strategy. Table 4 reports results obtained using measures of export
achievement, export satisfaction, and export intensity.
Strategy becomes more
adapted to the foreign
market
change in export performance
change in export performance
in low competitive markets
change in export performance
in highly competitive markets
export market competition
export performance level
export performance clearly
identified
adaptation of strategy
international experience
total sales value
constant
LR (zero slopes)
Number of observations
(2)
− 0.490 b
[0.039]
0.653
[0.313]
− 0.579 b
[0.024]
0.882 a
[0.008]
− 0.070
[0.728]
0.266
[0.323]
0.274
[0.273]
− 0.393 c
[0.077]
0.416 a
[0.010]
− 8,306 a
[0.000]
− 0.633 a
[0.002]
1.064 a
[0.003]
− 0.071
[0.743]
0.251
[0.358]
0.251
[0.320]
− 0.395 c
[0.090]
0.445 a
[0.010]
− 9.166 a
[0.000]
− 1.289 b
[0.018]
− 0.315
[0.203]
− 0.185
0.004
[0.465]
[0.990]
0.003
0.014
[0.990]
[0.957]
0.316
0.271
[0.145]
[0.221]
0.420 c
0.405 c
[0.062]
[0.073]
0.284 c
0.259 c
[0.074]
[0.097]
− 0.043
− 0.0587
[0.752]
[0.679]
− 3,921 a
− 4.342 a
[0.010]
[0.005]
− 145.291
− 141.585
220
220
Note: p values in parenthesis; Letters a, b, c indicate significance at the 1%, 5% and 10%
levels, respectively.
Tables 3 and 4 report two regressions for each measure. The first
regressions (Table 3: column 1; Table 4: columns 1, 3, and 5) test
Hypothesis 1. These columns include competitive intensity in the export market independently, that is, without any interaction with performance. The results in these first columns show that marketing
strategy change is more likely when performance declines. The negative coefficients that associate with changes in performance indicate
that improvement in performance significantly lowers the probability
of change, and conversely, a decline in performance increases the
probability of change. Furthermore, the results are consistent across
the different measures of export performance. Overall, in support of
H1, the results indicate that when a firm experiences a performance
decline, the likelihood of changing its international marketing strategy
increases.
H2 and H3 theorize directional moderation effects based upon the
level of competition in the specified foreign market. The effect of
competitive intensity emerges most clearly in the second regression
of each set (see Table 3: column 2; Table 4: columns 2, 4, and 6).
These regressions reveal that the effect of a decline in performance is
different between the two competitive conditions. Supporting H2, in
L.F. Lages et al. / Journal of Business Research 66 (2013) 2600–2611
2605
Table 4
The impact of past performance change on foreign market strategy change (using three different factor scores of past performance change).
Exp. performance
achievement
(factor score of 5 items)
(1)
Strategy in the foreign market
becomes more standardised
with the domestic market
change in export performance
change in export performance
in low competitive markets
change in export performance
in highly competitive markets
export market competition
export performance level
export performance clearly identified
adaption of strategy
international experience
total sales value
constant
Strategy becomes more adapted
to the foreign market
change in export performance
change in export performance in
low competitive markets
change in export performance in
highly competitive markets
export market competition
export performance level
export performance clearly identified
adaptation of strategy
international experience
total sales value
constant
LR (zero slopes)
Number of observations
(2)
− 0.486 b
[0.020]
Exp. performance
satisfaction
(factor score of 5 items)
(3)
(4)
− 0.466 b
[0.026]
− 0.108
[0.858]
− 0.513 b
[0.029]
0.854 a
[0.009]
− 0.164
[0.468]
0.0427
[0.843]
0.371
[0.115]
− 0.423 c
[0.057]
0.415 a
[0.006]
− 7.722 a
[0.000]
0.865 a
[0.005]
− 0.150
[0.500]
0.036
[0.868]
0.369
[0.117]
− 0.415 c
[0.056]
0.396 a
[006]
− 7,649 a
[0.000]
− 0.522 b
[0.011]
− 0.172
[0.481]
0.072
[0.741]
0.345 c
[0.079]
0.383 c
[0.062]
0.227
[0.149]
− 0.103
[0.437]
− 3,550 b
[0.012]
− 165.758
249
− 1.114 b
[0.021]
− 0.255
[0.313]
− 0.023
[0.932]
0.107
[0.653]
0.304
[0.133]
0.376 c
[0.068]
0.205
[0.187]
− 0.124
[0.376]
− 3.845 a
[0.007]
− 163.541
249
0.942 a
[0.003]
− 0.023
[0.922]
0.070
[0.760]
0.421 c
[0.074]
− 0.370 c
[0.080]
0.368 b
[0.013]
− 8,235 a
[0.000]
− 0.473 b
[0.028]
− 0.191
[0.418]
− 0.114
[0.659]
0.332 c
[0.093]
0.386 c
[0.064]
0.311 b
[0.048]
− 0.131
[0.340]
3,483 b
[0.013]
− 163.489
244
Export intensity
(factor score of 3 items)
(5)
(6)
− 0.712 a
[0.010]
0.472
[0.273]
−0.555 b
[0.019]
1.071 a
[0.001]
− 0.066
[0.979]
0.085
[0.711]
0.407 c
[0.083]
− 0.383 c
[0.084]
0.386 b
[0.014]
− 8.913 a
[0.000]
− 1.131 b
[0.032]
− 0.191
[0.449]
− 0.049
[0.854]
− 0.108
[0.676]
0.303
[0.137]
0.379 c
[0.074]
0.289
[0.061]
− 0.139
[0.322]
− 3.833 a
[0.008]
160.002
244
0.844 a
[0.010]
− 0.124
[0.557]
0.261
[0.329]
0.267
[0.277]
− 0.471 b
[0.040]
0.444 a
[0.004]
− 8,120 a
[0.000]
− 0.719 a
[0.000]
− 0.092
[0.719]
0.004
[0.988]
0.351
[0.117]
0.439 b
[0.046]
0.303
[0.061]
− 0.063
[0.649]
− 4,506 a
[0.002]
− 149.800
237
− 0.034
[0.966]
− 0.797 a
0.005]
0.830 b
[0.016]
− 0.136
[0.540]
0.267
[0.329]
0.260
[0.292]
− 0.476 b
[0.047]
0.471 a
[0.005]
− 8.203 a
[0.000]
− 1.334 a
[0.002]
− 0.396 c
[0.086]
0.147
[0.616]
0.001
[0.967]
0.306
[0.173]
0.423 c
[0.056]
0.283 c
[0.073]
− 0.075
[0.599]
− 5.208 a
[0.001]
− 146.561
237
Note: p values in parenthesis; Letters a, b and c indicate significance at the 1%, 5% and 10% levels, respectively.
high competition foreign markets firms respond to performance declines by aligning their marketing strategy more closely to the domestic
market (i.e., more standardized). Similarly, supporting H3, in low competition foreign markets firms react to performance declines by adapting
their marketing strategy more to the foreign market.
5.3. Control variables
The results hold after controlling for several control variables. The
first control variable is the level of performance in international markets. The findings indicate that the export performance level does not
significantly influence strategy change.
The results indicate that firms having a more adapted marketing
strategy were more likely to change their strategy. The estimates indicate that firms beginning with a more adapted marketing strategy
are more likely to adjust their strategy in both directions. The strategy
of these firms is equally likely to become less or more adapted, although
the effect of previous strategy upon change toward more standardized
strategies shows no statistical significance.
Managers' international experience influences both the likelihood
and the direction of change. More experienced managers are likely to
change toward a more adapted marketing strategy, but they are less
likely to move in the opposite direction. Managers dealing with international markets for a longer period seem to be more confident
in their skills to correctly adapt than those with less international
experience.
The identification of international performance in company reports does not emerge as a significant factor. The coefficients are positive in both equations, indicating that, if anything, the identification
of international operations in the company accounts makes change
in both directions more likely, but are only marginally significant.
Finally, larger firms tend to change to a more standardized marketing strategy. However, firm size does not relate to the probability
of marketing strategy becoming less standardized.
5.4. Robustness
Multiple performance metrics serve as a robustness test. Tables 3
and 4 show that the results are broadly consistent, regardless of
2606
L.F. Lages et al. / Journal of Business Research 66 (2013) 2600–2611
performance metric. The results (see Appendices B and C) confirm the
previous findings. Changes in export performance relate significantly
to change in 11 of the 13 cases in both equations. When accounting
for the interaction between performance change and the level of
competition, performance change relates significantly to greater standardization in 12 cases in highly competitive markets and in none of
the 13 cases in low competition markets. Conversely, performance
change relates significantly to greater adaptation in 13 cases in low
competition markets and in only 4 of the highly competitive ones.
Furthermore, the level of export performance does not relate with
statistical significance to change in either a more or a less standardized marketing strategy. The identification of international performance in financial reports also yields weak results. While the
coefficients are positive in all cases except 1, they are significant in
only 8 cases (all in the same equation). Firms with more adapted
marketing strategies are more likely to change both to more standardized (statistical significance in all 13 regressions) and to more
adapted strategies (statistical significance in 11 of 13 cases). Managers'
international experience clearly relates with the likelihood of the firm
becoming more adapted in its strategy (statistically significant in 11
of the 13 cases). Larger firms and firms competing in more highly competitive markets are more likely to standardize their strategies (results
for firm sales value and degree of competition hold in all 13 regressions), but no significant relationships exist between these variables
and the probability of the firm becoming more adapted in its marketing
strategy.
6. Discussion
6.1. Theoretical and managerial implications
Existing research in international marketing strategy views performance primarily as the outcome of strategy execution. This study,
which builds on the literature that past performance stimulates organizational change (Boeker, 1997; Burgelman & Grove, 2007), seeks to
discover if international marketing strategic change employs prior
performance changes as an antecedent under the theoretical perspective of organizational learning theory. This work theorizes that firms
experiencing continued performance success (either maintaining or
exceeding prior performance) will likely retain current international
marketing strategies and that when facing declining performance,
those firms will likely adjust their international marketing strategies.
The results provide compelling evidence that (1) declining performance influences when strategic change occurs and (2) that organizational learning theory provides an important framework for
understanding performance as an antecedent of international marketing strategy.
However, while these findings provide strong support for organizational learning theory, the lack of a perfect association between
performance decline and strategic change reflects the fact that not all
managers change strategy in response to performance declines. Anchoring and adjustment heuristics help to explain this behavior (Tversky
& Kahneman, 1974). With prior strategy serving as her/his anchor, a
manager can react to deteriorating performance by either (1) adjusting
strategy, working to learn from the past discrepancy (Lant & Mezias,
1992; Levitt & March, 1988), or (2) fall victim to inertia and fail to adjust from the prior anchor (e.g., Hinings & Greenwood, 1988; Miller,
1994). While the present findings show that managers predominately adjust from prior anchors, the results also reflect the existence of
inertia, thus suggesting the potential importance of integrating anchoring and adjustment heuristics into studies employing organizational learning theory for understanding strategic reactions to
declining performance.
The results also extend the understanding of how firms engage in
standardization/adaptation when considering their foreign market
strategy in relation to their domestic market strategy. The idea that
firms use knowledge from the local environment to align their strategies with local market conditions resides at the heart of the standardization versus adaptation debate—thus viewing the environment as
having an effect on strategy (e.g., Çavuşgil & Zou, 1994; Katsikeas et
al., 2006). However, this literature focuses on the adoption of a given
strategy, rather than on marketing strategy change over time. Extending this literature, the current study provides empirical evidence that
firms adjust their marketing strategy to their local market (i.e.,
perceived level of competitive intensity) when their performance
deteriorates.
Specifically, the results demonstrate that when firms experience a
performance decline, the determination as to whether to standardize
or adapt marketing strategy depends on the level of competition
within the specific foreign market. Current findings support the notion that competition in an industry continually works to drive the
rate of return down toward the competitive floor rate of return
(Porter, 1980). In light of this challenge, the results demonstrate
that under such conditions firms seek to lower their overall cost
structures via more standardized marketing strategies. Alternatively,
when competition is less intensive, firms take advantage of the
lower levels of competition in the local market to engage in marketing strategies more oriented toward the foreign market, thereby
working to enhance value by meeting local market needs in the
most aligned manner, maximizing value captured.
The managerial implications of the current work are two-fold.
First, this work serves to highlight the importance of learning and
strategic dynamism. Managers must work to be continual learners
and analyze how to make strategic adjustments when performance
worsens. Second, the results demonstrate the managerial importance
of perceptions of competition and how competition shapes the environment. The findings of this study are also interesting in that they
contradict common beliefs that firms engage in more standardized
strategies when competition is low (James & Hill, 1991). Contrary to
James and Hill (1991), the present findings suggest that managers
look to low competitive markets to explore opportunities to maximize value delivery to the customer, thereby gaining customers and
creating barriers to entry.
7. Limitations and directions for future research
Although advancing the literature, this study is not without its
limitations. First, the focus of this study is on the short-term reaction
to observed performance changes over a 1-year period, thus offering
no insight into effects over the long run. Because managers may refine their knowledge through short-term adaptation, they might succumb to a self-reinforcing bias toward learning (i.e., using what worked
in another market experiencing a performance decline as part of organizational learning theory's trial and error approach), which in turn may
damage their overall aptitude for learning (Levinthal & March, 1993).
Perhaps long-term success springs from the capability not only to
learn when facing environmental changes but also to become creative,
innovate and adapt continuously in the short run (Coelho, Augusto, &
Lages, 2011) even when the firm is performing well. Further, although
a long-term focus would seem to be desirable, international ventures
that perform poorly are unlikely to survive in the long term (Skarmeas,
Katsikeas, & Schlegelmilch, 2002). Thinking in the long term is a luxury
that only surviving firms can afford.
Second, although this study employs several measures of performance and finds consistent results for the influence of performance
decline on marketing strategy change, one should not conclude that
the results might not vary with other performance metrics. Furthermore, several scales used in this study are single-item measures. As
such, future research should examine other performance metrics,
use multi-item measures, and investigate the way(s) in which marketing managers respond to each.
L.F. Lages et al. / Journal of Business Research 66 (2013) 2600–2611
Third, the study is limited regarding its single entry mode
(exporting) from a single country (Portugal). Studies including a
broader set of entry modes (e.g., comparison of exporting, alliances,
and wholly-owned ventures) combined with a broader geographical
base (e.g., comparison of different countries, regions and institutional
environments) would advance this research area. Within this context,
further international business research is particularly encouraged to
explore how to “Go GloCal” (Lages, 2012), that is how to think and
act both globally and locally, which is very different from “think global
and act local” (the traditional definition of a GloCal approach).
2607
Beyond addressing the limitations for advancement of this area,
future researchers are also encouraged to explore the extent to
which firm's adjustments to the foreign market are a function of the
nature of the products that are exported (commodities or specialities)
and stage of the product life cycle (PLC). It is likely that in later stages
of the PLC, in which competition is intense, and in which consumers
might have a number of alternatives that are not really differentiated,
firms may use standardization of marketing strategy in order to
achieve the price points necessary to compete. Research in this area
is warranted.
Appendix A. Measures
Please select the Main Export Venture of your firm (the main product or group of products exported by your company to the most important
foreign market in terms of sales revenue), which will be the focus of this questionnaire:
a) the main export of your firm (product or group of products) in terms of sales revenue ______________________
b) the main importing country of your firm’s main export in terms of sales revenue __________________________
IMPORTANT: You have just defined the Main Export Venture, which this questionnaire is about.
DEPENDENT VARIABLE: CURRENT STRATEGY CHANGE
Question: Consider the main export venture. When comparing the domestic market with the market that imports the most from your
company, to what extent the price-quality relationship was changed from “Year t-1” to “Year t”?
Scale:
1= This year is much more similar between the two markets than it was in “Year t-1”; 2= This year is more similar …; 3- No
change; 4= This year is more differentiated… ; 5= This year is much more differentiated between the two markets than it was in “Year t-1”
The variable employed as the dependent variable in the study (StratChange), is defined as follows:
StratChange = 0, if strategy did not change from “Year t-1” to “Year t”StratChange = 1, if strategy in “Year t” is more or much more
similar than it was in “Year t-1”, 0 otherwise; StratChange = 2, if strategy in “Year t” is more or much more differentiated than it was
in “Year t-1”, 0 otherwise;
PAST PERFORMANCE CHANGE
PAST PERFORMANCE ACHIEVEMENT IMPROVEMENT FROM “Year t-2” TO “Year t-1” (α=.97)
Question: How well did your company achieve the following objectives for the main export venture from “Year
t-2” to “Year t-1”?
Scale:
1=Much Worse in “Year t-1” than in “Yeart-2”; 2= Worse …; 3= Equal to “Year t-2”;
4= Better …; 5=Much Better in “Year t-1” than in “Year t-2”
a) Export sales volume (unit sales)
b) Export sales revenue
c) Export profitability
d) Market share in the main importing market
e) Overall export performance
PAST SATISFACTION WITH PERFORMANCE IMPROVEMENT FROM “Year t-2” TO “Year t-1” (α= .97)
Question: How satisfied are you with the results of your main export venture from “Year t-2” to “Year t-1”?
Scale:
1=Much Less Satisfied in “Year t-1” than in “Year t-2”; 2=Less Satisfied …; 3=Equally Satisfied;
4= More Satisfied …; 5=Much More Satisfied in “Year t-1” than in “Year t-2”
a) Export sales volume (unit sales)
b) Export sales revenue
c) Export profitability
d) Market share in the main importing market
e) Overall export performance
PAST EXPORT INTENSITY IMPROVEMENT FROM “Year t-2” TO “Year t-1” (α= .96)
Question: With regard to your main export venture, to what extent did the following change from “Year t-2” to
“Year t-1”?
Scale:
1= Largely Decrease from “Year t-2” to “Year t-1”; 2= Decreased …; 3= No change;
4= Increased … 5= Largely Increase from “Year t-2” to “Year t-1”
a) Percentage of exporting venture to total sales volume (unit sales)
b) Percentage of exporting venture to total sales revenue
c) Percentage of exporting venture to total profitability
MODERATING VARIABLE: EXPORT MARKET COMPETITION
Question: Considering the main export venture over the past year (Year t-1), how would you characterize the competition in the
industry in the export market?
Scale: 1=None; 2= Little; 3= Moderate; 4= Considerable; 5=Substantial
2608
L.F. Lages et al. / Journal of Business Research 66 (2013) 2600–2611
CONTROL VARIABLES
EXPORT PERFORMANCE LEVEL
PAST PERFORMANCE ACHIEVEMENT IN “Year t-2” (α= .92)
Question: How well did your company achieve the following objectives for the main export venture in “Year t-2”?
Scale anchors:
1=Very Badly; 2- Badly; 3-Moderately; 4-Well; 5=Very Well
a) Export sales volume (unit sales)
b) Export sales revenue
c) Export profitability
d) Market share in the main importing market
e) Overall export performance
PAST SATISFACTION WITH PERFORMANCE IN “Year t-2” (α= .94)
Question: How satisfied are you with the results of your main export venture in “Year t-2”?
Scale anchors:
1=Not Satisfied at All; 2-A Little Satisfied; 3-Moderately Satisfied; 4-Very Satisfied; 5=Extremely Satisfied
a) Export sales volume (unit sales)
b) Export sales revenue
c) Export profitability
d) Market share in the main importing market
e) Overall export performance
PAST EXPORT INTENSITY IN “Year t-2” (α= .96)
Question: With regard to your main export venture in “Year t-2”, how do you assess the following?
Scale anchors:
0-9%; 10-29%; 30-59%; 60-84%; 85-100%
a) Percentage of exporting venture to total sales volume (unit sales)
b) Percentage of exporting venture to total sales revenue
c) Percentage of exporting venture to total profitability
EXPORT PERFORMANCE CLEARLY IDENTIFIED IN FINANCIAL REPORTS
Question: What is your opinion on the following statement?“
Our financial reports clearly differentiate between domestic performance and export performance”.
Scale: 1=Strongly Disagree; 2= Disagree; 3= Neither Agree nor Disagree; 4= Agree; 5=Strongly Agree
STRATEGY ADAPTATION TO THE FOREIGN MARKET
Question: Consider the main export venture over the past year (Year t-1). To what extent did the “price-quality relationship strategy” differ
in comparing the main export market to the domestic market?
Scale: 1=No Adaptation; 2= Little Adaptation; 3= Moderately Different; 4=Considerable Adaptation; 5=Extensive Adaptation
INTERNATIONAL EXPERIENCE
Question: Consider the people involved in your main export venture during the past year (Year t-1). How would you classify their degree
of overseas experience (i.e. live/work abroad)
Scale: 1=None; 2= Little; 3= Moderate; 4= Considerable; 5=Substantial
TOTAL SALES VALUE
Question: What was your company’s total sales value for last year (Year t-1)?
Scale: ≤ €100,000; €100,001-€350,000; €350,001-€1.5M; €1.5M-3.5M; 3.5M-5M; 5M-35M; 35M-145M; ≥145M
Note:
Year t-2= 1997
Year t-1= 1998
Year t = 1999 (The survey was conducted in this year)
Appendix B. The impact of performance change on foreign market strategy change (detailed results over 13 performance indicators)
Measures of performance
Export performance achievement
a
Strategy in the foreign market becomes more
standardized with the domestic market
change in export performance
export market competition
export performance clearly
identified
adaptation of strategy
international experience
total sales value
constant
Strategy becomes more adapted to the foreign change in export performance
market
export market competition
export performance level
export performance clearly
identified
adaptation of strategy
international experience
total sales value
constant
LR (zero slopes)
Number of observations
c
Export performance satisfaction
d
e
a
b
c
Export intensity
d
e
a
b
c
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
− 0.458 b
[0.029]
0.919 a
[0.004]
− 0.002
[0.993]
0.012
[0.958]
0.379
[0.103]
− 0.402 c
[0.056]
0.393 a
[0.007]
− 6.316 a
[0.000]
− 0.469 b
[0.013]
− 0.131
[0.596]
0.064
[0.798]
0.327 c
[0.097]
0.388 c
[0.057]
0.290 c
[0.063]
− 0.123
[0.365]
− 2.395
[0.166]
40.76
[0.000]
259
− 0.431 b
[0.029]
0.864 a
[0.005]
− 0.079
[0.746]
0.041
[0.855]
0.400 c
[0.089]
− 0.392 c
[0.068]
0.379 a
[0.007]
− 6.071 a
[0.001]
− 0.420 b
[0.026]
− 0.157
[0.544]
0.296
[0.260]
0.344 c
[0.077]
0.419 b
[0.037]
0.284 c
[0.074]
− 0.154
[0.257]
− 3.233 c
[0.062]
41.12
[0.000]
258
− 0.296
[0.191]
0.791 b
[0.017]
− 0.236
[0.413]
−0.211
[0.992]
0.368
[0.113]
− 0.395 c
[0.069]
0.356 a
[0.016]
− 5.463 a
[0.009]
− 0.370
[0.106]
− 0.238
[0.336]
−0.030
[0.918]
0.326 c
[0.094]
0.372 c
[0.073]
0.268 c
[0.086]
− 0.119
[0.365]
− 1.992
[0.310]
34.64
[0.002]
258
− 0.488 b
[0.049]
0.875 a
[0.005]
− 0.225
[0.333]
0.033
[0.877]
0.357
[0.134]
− 0.393 c
[0.065]
0.397 a
[0.006]
− 5.489 a
[0.000]
− 0.559 a
[0.006]
− 0.150
[0.566]
0.116
[0.589]
0.349 c
[0.064]
0.387 c
[0.056]
0.292 c
[0.072]
− 0.152
[0.267]
− 2.171
[0.176]
42.60
[0.000]
252
− 0.448 b
[0.022]
0.870 a
[0.005]
− 0.089
[0.741]
0.026
[0.906]
0.400 c
[0.087]
− 0.402 c
[0.061]
0.375 a
[0.008]
− 5.936 a
[0.000]
− 0.431 b
[0.038]
− 0.181
[0.444]
−0.186
[0.398]
0.357 c
[0.073]
0.419 b
[0.039]
0.300 c
[0.052]
− 0.123
[0.353]
− 1.758
[0.256]
40.24
[0.000]
258
− 0.419 c
[0.058]
0.968 a
[0.003]
0.113
[0.680]
0.062
[0.791]
0.424 c
[0.703]
− 0.361 c
[0.086]
0.347 b
[0.022]
− 7.311 a
[0.000]
− 441 b
[0.022]
− 0.716
[0.466]
−0.022
[0.940]
0.315
[0.109]
0.413 b
[0.049]
0.325 b
[0.035]
− 0.142
[0.298]
− 2.150
[0.188]
39.85
[0.000]
254
− 0.391 c
[0.051]
0.936 a
[0.003]
− 0.034
[0.906]
0.082
[0.725]
0.411 c
[0.081]
− 0.348
[0.106]
0.357 b
[0.013]
− 6.948 a
[0.000]
− 0.464 b
[0.023]
− 0.186
[0.451]
0.053
[0.859]
0.351 c
[0.081]
0.410 c
[0.052]
0.320 b
[0.037]
− 0.146
[0.290]
− 2.350
[0.152]
39.86
[0.000]
254
− 0.446 b
[0.026]
0.872 a
[0.006]
− 0.033
[0.901]
0.056
[0.812]
408 C
[0.084]
− 0.344
[0.108]
0.330 b
[0.027]
− 6.391 a
[0.001]
− 0.342
[0.126]
− 0.246
[0.312]
−0.201
[0.524]
0.325
[0.115]
0.388 c
[0.063]
0.336 b
[0.037]
− 0.155
[0.251]
− 1.669
[0.310]
38.69
[0.000]
252
− 0.618 b
[0.011]
0.973 a
[0.002]
− 0.056
[0.851]
0.078
[0.734]
0.395 c
[0.095]
− 0.387 c
[0.067]
0.405 a
[0.008]
− 6.458 a
[0.000]
− 0.506 b
[0.030]
− 0.166
[0.500]
−0.290
[0.329]
0.311
[0.102]
0.353 c
[0.088]
298 c
[0.059]
− 0.096
[0.494]
− 1.247
[0.452]
46.72
[0.000]
247
− 0.375 c
[0.090]
0.937 a
[0.004]
0.036
[0.901]
0.060
[0.795]
0.406 c
[0.084]
− 0.369 c
[0.081]
0.344 b
[0.019]
− 7.030 a
[0.000]
− 0.420 b
[0.047]
− 0.229
[0.347]
−0.098
[0.746]
0.327 c
[0.095]
0.397 c
[0.057]
0.323 b
[0.043]
− 0.139
[0.312]
− 1.845
[0.260]
38.71
[0.000]
253
− 0.631 a
[0.006]
1.007 a
[0.002]
− 0.085
[0.569]
0.085
[0.712]
0.409 c
[0.081]
− 0.465 b
[0.037]
0.380 a
[0.007]
− 5.978 a
[0.000]
− 0.547 a
[0.001]
− 0.052
[0.834]
0.0754
[0.629]
0.334
[0.101]
0.407 b
[0.045]
0.252
[0.120]
− 0.114
[0.388]
− 2.466 c
[0.083]
47.84
[0.000]
252
− 0.598 a
[0.005]
1.015 a
[0.002]
− 0.080
[0.615]
0.053
[0.823]
0.422 c
[0.076]
− 0.450 b
[0.037]
0.417 a
[0.003]
− 6.296 a
[0.000]
− 0.556 a
[0.000]
− 0.072
[0.772]
0.050
[0.746]
0.347 c
[0.085]
0.428 b
[0.038]
0.236
[0.140]
− 0.085
[0.527]
− 2.511 c
[0.083]
48.32
[0.000]
251
−0.406
[0.107]
0.765 b
[0.017]
−0.122
[0.427]
0.177
[0.497]
0.224
[0.361]
−0.415 c
[0.060]
0.367 a
[0.018]
− 5.572 a
[0.001]
− 0.645 a
[0.000]
− 0.151
[0.557]
0.027
[0.872]
0.324
[0.162]
0.394 c
[0.070]
0.339 b
[0.038]
-0.099
[0.472]
−2.069
[0.174]
41.54
[0.000]
239
L.F. Lages et al. / Journal of Business Research 66 (2013) 2600–2611
export performance level
b
Note: p values in parenthesis; Letters a, b and c indicates significance at the 1%, 5% and 10% levels, respectively.
2609
2610
Appendix C. The impact of performance change on foreign market strategy change with the moderating effect competition (detailed results over 13 performance indicators)
Measures of Performance
Export performance achievement
a
Strategy in the foreign market becomes
more standardised with the domestic
market
export performance level
export performance clearly
identified
adaptation of strategy
international experience
total sales value
constant
Strategy becomes more adapted to the
foreign market
change in export
performance in low
competitive markets
change in export
performance in highly
competitive markets
export market competition
c
Export performance satisfaction
d
e
a
b
c
Export Intensity
d
e
a
b
c
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
− 0.264
[0.336]
− 0.252
[0.360]
− 0.233
[0.427]
− 0.300
[0.398]
− 0.332
[0.266]
− 0.244
[0.432]
− 0.220
[0.464]
− 0.353
[0.245]
− 0.483
[0.176]
− 0.200
[0.513]
− 0.400
[0.191]
− 0.368
[0.220]
−0.204
[0.527]
− 0.499 b
[0.022]
− 0.467 b
[0.022]
− 0.299
[0.199]
− 0.508 b
[0.039]
− 0.459 b
[0.022]
− 447 b
[0.048]
− 0.416 b
[0.042]
− 0.455 b
[0.027]
− 0.621 b
[0.012]
− 0.405 c
[0.083]
− 0.677 a
[0.003]
− 0.645 a
[0.003]
−0.461 c
[0.074]
1.200 a
[0.006]
0.010
[0.969]
0.017
[0.939]
0.357
[0.127]
− 0.416 c
[0.062]
0.405 a
[0.007]
− 7.501 a
[0.000]
−0.775 a
[0.003]
1.123 b
[0.012]
− 0.058
[0.815]
0.048
[0.830]
0.381
[0.107]
− 0.401 c
[0.073]
0.389 a
[0.007]
− 7.212 a
[0.002]
−0.704 a
[0.006]
0.852 c
[0.055]
− 0.233
[0.423]
0.001
[0.995]
0.365
[0.116]
− 0.401 c
[0.070]
0.359 b
[0.016]
− 5.752 b
[0.018]
−583 b
[0.037]
1.092 b
[0.012]
− 0.231
[0.329]
0.033
[0.878]
0.339
[0.153]
− 0.400 c
[0.072]
0.404 a
[0.006]
− 6.381 a
[0.002]
−0.795 a
[0.008]
0.998 b
[0.026]
− 0.081
[0.765]
0.026
[0.904]
0.390 c
[0.095]
− 0.412 c
[0.063]
0.381 a
[0.007]
− 6.503 a
[0.006]
−0.739 b
[0.011]
1.183 a
[0.006]
− 0.124
[0.651]
0.066
[0.776]
0.408 c
[0.084]
− 0.374 c
[0.091]
0.354 b
[0.022]
− 8.227 a
[0.000]
−0.719 a
[0.008]
1.141 a
[0.009]
−0.021
[0.942]
0.086
[0.713]
0.396 c
[0.092]
− 0.358
[0.112]
0.364 b
[0.013]
− 7.842 a
[0.001]
−0.736 a
[0.009]
0.958 b
[0.025]
− 0.023
[0.933]
0.058
[0.803]
0.402 c
[0.088]
− 0.350
[0.110]
0.332 b
[0.027]
− 6.787 a
[0.003]
−0.559 c
[0.055]
1.084 b
[0.012]
− 0.047
[0.875]
0.079
[0.730]
0.387
[0.103]
− 0.390 c
[0.075]
0.405 a
[0.009]
− 6.971 a
[0.001]
−0.794 b
[0.016]
1.153 b
[0.011]
0.041
[0.887]
0.065
[0.776]
0.390 c
[0.097]
− 0.382 c
[0.087]
0.350 b
[0.019]
− 7.930 a
[0.001]
−0.717 b
[0.014]
1.311 a
[0.003]
− 0.064
[0.668]
0.091
[0.693]
0.384
[0.107]
− 0.484 b
[0.040]
0.392 a
[0.005]
− 7.257 a
[0.000]
−0.959 a
[0.000]
1.320 a
[0.003]
− 0.062
[0.700]
0.052
[0.827]
0.389
[0.108]
− 0.462 b
[0.041]
0.430 a
[0.003]
− 7.546 a
[0.000]
−0.938 a
[0.000]
1.078 b
[0.022]
−0.115
[0.456]
0.163
[0.538]
0.197
[0.424]
− 0.425 c
[0.067]
0.382 b
[0.016]
−6.777 a
[0.001]
−0.882 a
[0.001]
−0.315
[0.113]
−0.299
[0.120]
−0.274
[0.234]
−0.470 b
[0.025]
−0.344
[0.117]
−0.306
[0.128]
−0.338
[0.118]
−0.231
[0.307]
−0.384
[0.106]
-0.276
[0.202]
−0.399 b
[0.023]
−0.414 b
[0.013]
−0.536 a
[0.003]
−0.784 c
−0.805 c
−0.693
−0.623
−0.746 c
−0.735 c
−0.734 c
−0.698 c
−0.707
−0.820 c
−0.795 c
−0.770 c
−0.590
[0.070]
[0.090]
[0.109]
[0.201]
[0.086]
[0.084]
[0.094]
[0.099]
[0.115]
[0.061]
[0.078]
[0.081]
[0.158]
export performance level
0.084
0.280
−0.031
0.138
−0.158
−0.019
0.062
−0.196
−0.295
0.076
0.064
0.029
0.017
[0.738]
[0.289]
[0.914]
[0.526]
[0.505]
[0.970]
[0.833]
[0.534]
[0.314]
[0.803]
[0.683]
[0.849]
[0.919]
export performance clearly
0.340 c
0.357 c
0.341 c
0.361 c
0.379 c
0.338 c
0.372 c
0.342 c
0.326 c
0.346 c
0.344
0.368 c
0.358
identified
[0.090]
[0.069]
[0.086]
[0.059]
[0.064]
[0.091]
[0.070]
[0.100]
[0.095]
[0.088]
[0.105]
[0.081]
[0.131]
adaptation of strategy
0453 b
0.480 b
0.414 b
0.423 b
474 b
0.455 b
0.457 b
0.427 b
0.389 c
0.448 b
0.477 b
0.501 b
0.444 b
[0.029]
[0.018]
[0.045]
[0.036]
[0.017]
[0.030]
[0.031]
[0.037]
[0.060]
[0.032]
[0.016]
[0.013]
[0.035]
international experience
− 0.280 c
0.272 c
0.258 c
0.282 c
0.283 c
0.311 b
0.304 b
0.326 b
0.289 c
0.304 c
0.249
0.240
0.337 b
[0.069]
[0.083]
[0.095]
[0.082]
[0.065]
[0.042]
[0.044]
[0.042]
[0.065]
[0.051]
[0.116]
[0.125]
[0.036]
total sales value
− 0.124
− 0.152
− 0.114
− 0.158
− 0.119
− 0.139
− 0.145
− 0.148
− 0.095
− 0.136
− 0.115
− 0.090
−0.091
[0.355]
[0.251]
[0.380]
[0.245]
[0.366]
[0.307]
[0.288]
[0.272]
[0.496]
[0.323]
[0.385]
[0.503]
[0.506]
− 1.053
− 0.471
− 0.546
constant
− 0.250
0.124
− 0.337
− 0.544
− 0.209
0.638
0.066
0.074
− 0.153
−0.735
[0.899]
[0.610]
[0.832]
[0.792]
[0.946]
[0.858]
[0.773]
[0.912]
[0.753]
[0.972]
[0.967]
[0.932]
[0.684]
LR (zero slopes)
− 166.779 − 166.967 − 169.865 − 165.461 − 167.912 − 164.639 − 164.811 − 165.725 − 160.279 − 164.834 − 160.478 − 160.335 −151.255
Number of observations
259
258
258
252
258
254
254
252
247
253
252
251
239
Note: p values in parenthesis; Letters a, b and c indicates significance at the 1%, 5% and 10% levels, respectively.
L.F. Lages et al. / Journal of Business Research 66 (2013) 2600–2611
change in export
performance in low
competitive markets
change in export
performance in highly
competitive markets
export market competition
b
L.F. Lages et al. / Journal of Business Research 66 (2013) 2600–2611
References
Ahmed, Z. U., Mohamed, O., Johnson, J. P., & Meng, L. Y. (2002). Export promotion
programs of Malaysian firms: An international marketing perspective. Journal of
Business Research, 55(10), 831–843.
Audia, P. G., & Greve, H. R. (2006). Less likely to fail: Low performance, firm size,
and factory expansion in the shipbuilding industry. Management Science, 52(1),
83–94.
Aulakh, P. S., Kotabe, M., & Teegen, H. (2000). Export strategies and performance of
firms from emerging economies: Evidence from Brazil, Chile, and Mexico. The
Academy of Management Journal, 43(3), 342–361.
Bagozzi, R. P., & Foxall, G. R. (1996). Construct validation of a measure of adaptive–
innovative cognitive styles in consumption. International Journal of Research in
Marketing, 13(3), 201–213.
Boeker, W. (1997). Strategic change: The influence of managerial characteristics and
organizational growth. The Academy of Management Journal, 40(1), 152–170.
Brouthers, L. E., Werner, S., & Matulich, E. (2000). The influence of triad nations' environments on price–quality product strategies and MNC performance. Journal of International Business Studies, 31(1), 39–62.
Burgelman, R. A., & Grove, A. S. (2007). Let chaos reign, then rein in chaos—repeatedly:
Managing strategic dynamics for corporate longevity. Strategic Management Journal, 28(10), 965–979.
Çavuşgil, S. T., & Zou, S. (1994). Marketing strategy–performance relationship: An investigation of the empirical link in export market ventures. Journal of Marketing,
58(1), 1–21.
Coelho, F., Augusto, M., & Lages, L. F. (2011). Contextual factors and the creativity of
frontline employees: The mediating effects of role stress and intrinsic motivation.
Journal of Retailing, 87(1), 31–45.
Cyert, R. M., & March, J. G. (1963). A behavioral theory of the firm. Englewood Cliffs, N.J.:
Prentice-Hall.
Diamantopoulos, A., & Kakkos, N. (2007). Managerial assessments of export performance: Conceptual framework and empirical illustration. Journal of International
Marketing, 15(3), 1–31.
Doyle, P. (2000). Value-based marketing: Marketing strategies for corporate growth and
shareholder value. New York: John Wiley and Sons.
Doyle, P., Saunders, J., & Wong, V. (1986). Japanese marketing strategies in the UK: A
comparative study. Journal of International Business Studies, 17(1), 27–46.
Hinings, C. R., & Greenwood, R. (1988). The dynamics of strategic change. Oxford: Basil
Blackwell.
Hortinha, P., Lages, C., & Lages, L. F. (2011). The trade-off between customer and technology orientations: Impact on innovation capabilities and export performance.
Journal of International Marketing, 19(3), 36–58.
Hult, G. T. M., Ketchen, D. J., Jr., Griffith, D. A., Chabowski, B. R., Hoffman, M. K., Dykes, B.
J., et al. (2008). An assessment of the measurement of performance in international
business research. Journal of International Business Studies, 39(6), 1064–1080.
Hutzschenreuter, T., Pedersen, T., & Volberda, H. W. (2007). The role of path dependency and managerial intentionality: A perspective on international business. Journal
of International Business Studies, 38(7), 1055–1068.
Iyer, D. N., & Miller, K. D. (2008). Performance feedback, slack, and the timing of acquisitions. The Academy of Management Journal, 51(4), 808–822.
James, W. L., & Hill, J. S. (1991). International advertising messages: To adapt or not to
adapt. Journal of Advertising Research, 31(3), 65–71.
Kaleka, A. (2011). When exporting manufacturers compete on the basis of service: Resources and marketing capabilities driving service advantage and performance.
Journal of International Marketing, 19(1), 40–58.
Kaleka, A., & Berthon, P. (2006). Learning and locale: The role of information, memory
and environment in determining export differentiation advantage. Journal of Business Research, 59(9), 1016–1024.
Katsikeas, C. S., Leonidou, L. C., & Morgan, N. A. (2000). Firm-level export performance
assessment: Review, evaluation, and development. Journal of the Academy of Marketing Science, 28(4), 493–511.
Katsikeas, C. S., Samiee, S., & Theodosiou, M. (2006). Strategy fit and performance consequences of international marketing standardization. Strategic Management Journal, 27(9), 867–890.
Kohli, A. K., & Jaworski, N. J. (1990). Market orientation: The construct, research propositions, and managerial implications. Journal of Marketing, 54(2), 1–18.
La, V., Patterson, P., & Styles, C. (2009). Client perceived performance and value in professional B2B services: An international perspective. Journal of International Business Studies, 40(2), 274–300.
Lages, L. F. (2012, April). Going GloCal. Gold Magazine, 13. (pp. 72–75): InBusiness
Publisher.
Lages, L. F., Abrantes, J. L., & Lages, C. R. (2008). The STRATADAPT scale: A measure of
marketing strategy adaptation to international business markets. International
Marketing Review, 25(5), 584–600.
Lages, L. F., Jap, S., & Griffith, D. A. (2008). The role of past performance in export
ventures: A short-term reactive approach. Journal of International Business Studies,
39(2), 304–325.
2611
Lages, L. F., Lages, C., & Lages, C. R. (2006). Main consequences of prior export performance results: An exploratory study of European exporters. Journal of
Euromarketing, 15(4), 57–75.
Lages, L. F., & Montgomery, D. B. (2004). Export performance as an antecedent of export commitment and marketing strategy adaptation: Evidence from small and
medium sized exporters. European Journal of Marketing, 38(9/10), 1186–1214.
Lages, L. F., Silva, G., & Styles, C. (2009). Relationship capabilities, product quality, and
innovation as determinants of export performance. Journal of International Marketing, 17(4), 47–70.
Lages, L. F., Silva, G., Styles, C., & Pereira, Z. L. (2009). The NEP scale: A measure of network export performance. International Business Review, 18(4), 344–356.
Lant, T. K. (1992). Aspiration level adaptation: An empirical exploration. Management
Science, 38(5), 623–644.
Lant, T. K., & Mezias, S. J. (1992). An organizational learning model of convergence and
reorientation. Organization Science, 3(1), 47–71.
Lant, T. K., Milliken, F. J., & Batra, B. (1992). The role of managerial learning and interpretation in strategic persistence and reorientation: An empirical exploration. Strategic Management Journal, 13(8), 585–608.
Lant, T. K., & Montgomery, D. B. (1987). Learning from strategic success and failure.
Journal of Business Research, 15(6), 503–518.
Levinthal, D., & March, J. C. (1981). A model of adaptive organizational search. Journal of
Economic Behavior in Organizations, 2(4), 307–333.
Levinthal, D., & March, J. C. (1993). The myopia of learning. Strategic Management Journal, 14(S2), 95–112.
Levitt, T. (1983, May/June). The globalization of markets. Harvard Business Review, 61,
92–102.
Levitt, B., & March, J. C. (1988). Organizational learning. Annual Review of Psychology,
14, 319–340.
Lieberman, M. B., & Montgomery, D. (1988). First mover advantages. Strategic Management Journal, 9(S1), 41–58.
Madsen, T. K. (1998). Executive insights: Managerial judgment of export performance.
Journal of International Marketing, 6(3), 82–93.
March, J. G., & Simon, H. A. (1958). Organizations. New York: John Wiley and Sons.
McDonald, M. L., & Westphal, J. D. (2003). Getting by with the advice of their friends:
CEOs' advice networks and firms' strategic responses to poor performance. Administrative Science Quarterly, 48(1), 1–32.
Miller, D. (1994). What happens after success? The perils of excellence. Journal of Management Studies, 31(3), 325–358.
Miller, D., & Chen, M. -J. (1994). Sources and consequences of competitive inertia: A
study of the US airline industry. Administrative Science Quarterly, 39, 1–23.
Morgan, N. A., Kaleka, A., & Katsikeas, C. S. (2004). Antecedents of export venture
performance: A theoretical model and empirical assessment. Journal of Marketing,
68(1), 90–108.
Naidu, G. M., & Prasad, V. K. (1994). Predictors of export strategy and performance of
small- and medium-sized firms. Journal of Business Research, 31(2/3), 107–115.
OECD (2008, June 25). Economic survey of Portugal 2008: Maximizing the Gains from Integration in the World Economy. : OECD Publishing.
Podsakoff, P. M., MacKenzie, S. B., Lee, J. -Y., & Podsakoff, N. P. (2003). Common method
biases in behavioral research: A critical review of the literature and recommended
remedies. The Journal of Applied Psychology, 88(5), 879–903.
Porter, M. E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. New York: The Free Press.
Ryans, J. K., Jr., Griffith, D. A., & White, D. S. (2003). Viewpoint: Standardization/adaptation
of international marketing strategy: Necessary conditions for the advancement of
knowledge. International Marketing Review, 20(6), 588–603.
Samiee, S., & Roth, K. (1992). The influence of global marketing standardization on performance. Journal of Marketing, 56(2), 1–17.
Schilke, O., Reimann, M., & Thomas, J. S. (2009). When does international marketing
standardization matter to firm performance? Journal of International Marketing,
17(4), 24–46.
Skarmeas, D., Katsikeas, C. S., & Schlegelmilch, B. B. (2002). Drivers of commitment and
its impact on performance in cross-cultural buyer–seller relationships: The importer's perspective. Journal of International Business Studies, 33(4), 757–783.
Sousa, C. M. P., & Bradley, F. (2008). Antecedents of international pricing adaptation
and export performance. Journal of World Business, 43(3), 307–320.
Sousa, C. M. P., & Lages, L. F. (2011). The PD scale: A measure of psychic distance and its
impact on international marketing strategy. International Marketing Review, 28(2),
201–222.
Sullivan, J. J., & Nonaka, I. (1986). The application of organizational learning theory to
Japanese and American management. Journal of International Business Studies,
17(3), 127–147.
Tversky, A., & Kahneman, D. (1974). Judgement under uncertainty: Heuristics and
biases. Science, 185, 1124–1131.
Yang, Y. S., Leone, R. P., & Alden, D. L. (1992). A market expansion ability approach to
identify potential exporters. Journal of Marketing, 56(1), 84–96.
Zajac, E. J., & Shortell, S. M. (1989). Changing generic strategies: Likelihood, direction,
and performance implications. Strategic Management Journal, 10(5), 413–430.