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MARKET FORESIGHT CAPABILITY: DETERMINANTS AND NEW PRODUCT OUTCOMES
Title
MARKET FORESIGHT CAPABILITY: DETERMINANTS AND NEW PRODUCT OUTCOMES.
Creator
McCardle, Michael, J. Chris White, Ron Michaels and, University of Central Florida
Abstract / Description
To achieve and maintain a superior competitive position, firms must develop market sensing capability—the ability to sense events and trends in markets ahead of competitors (Day 1994a). According to Day, in firms with superior market sensing capability, “the processes for gathering, interpreting, and using market information are more systematic, thoughtful, and anticipatory than in other firms” [emphasis added]. Although Day asserted that market orientation captures the...
Show moreTo achieve and maintain a superior competitive position, firms must develop market sensing capability—the ability to sense events and trends in markets ahead of competitors (Day 1994a). According to Day, in firms with superior market sensing capability, “the processes for gathering, interpreting, and using market information are more systematic, thoughtful, and anticipatory than in other firms” [emphasis added]. Although Day asserted that market orientation captures the essence of a market sensing capability, researchers have suggested that market orientation, by itself, does not provide the requisite ability to develop competitive advantage because of its focus on detecting rather than anticipating market trends. While prior research, most notably pertaining to market orientation, has addressed the detection of current market trends, a gap in our knowledge remains regarding the ability to anticipate future market conditions. This research seeks to address this lacuna by exploring a firm’s market foresight capability, defined as the organizational capability that allows the firm to anticipate emerging shifts in the market before they are evident to competitors. Organizations possessing superior market foresight capability derive a multitude of benefits from having greater insight into future market conditions. These benefits include the ability to determine which future market trends warrant further exploration and exploitation, the identification of critical resources that will be needed in the future, and-of primary interest in this dissertation—the ability to develop new products that meet customer needs in the future. This research seeks to better inform managers as to the organizational characteristics that enhance the firm’s ability to anticipate future markets by developing and testing a model of the antecedents and new product outcomes of a firm’s market foresight capability. The constructs selected as determinants of market foresight capability are supported by dynamic capability theory, which focuses on the organization’s information processes, learning culture, and coordination/integration influences that elevate lower-level capabilities of individuals and teams to an organization-level or dynamic capability. The organizational information processes that are hypothesized to positively impact market foresight capability include active scanning, market experimentation, and lead user collaboration. The impact of information processes on market foresight capability is contingent on an organization’s learning culture (future orientation and learning orientation) and interdepartmental connectedness, which influence the coordination and integration of information between organizational actors. A firm’s potential for long-term competitive advantage lies in using the insights resulting from its market foresight capability to create advantageous resource configurations. To create valuable resource configurations, the firm with superior market foresight capability must capitalize on its ability to anticipate change through the development of new product and service offerings that better serve the needs of customers. It is hypothesized that superior market foresight capability results in heightened new product creativity, faster speed to market, and better market-entry timing. These new product outcomes of market foresight capability are further hypothesized to lead to superior new product financial performance. Of course, firms cannot realize the hypothesized new product benefits unless they are able to capitalize on market opportunities. Therefore, the relationships between market foresight capability and new product outcomes are hypothesized to be contingent on organizational inertia.
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Date Issued
2005
Identifier
CFE0000446, ucf:46381
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0000446