Market-focused strategic flexibility and sales growth: empirical evidence from Nigeria

Abstract

A newly competitive environment is developing in Nigeria, the business environment has altered rapidly and unpredictably, and new knowledge and capabilities are consequently needed to survive in such a turbulent environment. This study suggests market-focused strategic flexibility as one survival strategy needed. Though a fair amount of literature exists on strategic flexibility and the performance of a firm the extant literature has been somewhat silent on market-focused strategic flexibility since it was conceptualized by Johnson, Lee, Siani and Grohnmann (2003). The mixed relationship of market orientation and firm performance (for example as found in studies by authors such as Jaworski and Kohli (1993), Zhou et al.2005, and Ellis 2006) causes one to suspect that certain moderating variables may be responsible; market-focused strategic flexibility is suggested as one of them. The effect of environmental variables on market-focused strategic flexibility and sales growth was also studied. In order to investigate these issues, the research instrument, a questionnaire, was distributed to the chief executive officers and marketing managers of five hundred firms in Nigeria. A 58.4% response rate was achieved. The psychometric properties of the instrument showed it to exhibit a good fit with the model. The data was then analyzed and tested using factor analysis, correlational and regressional analysis. The overall results suggest that market-focused strategic flexibility is a driver of organizational positioning in a dynamic environment, and it is also found to moderate the market orientation -sales growth relationship studied and environmental variables influence its relationship with sales growth in most firms. The results also established that while firms operating in a dynamic environment may gain advantage by adopting market-focused strategic flexibility, firms operating in a relatively stable environment may not achieve particularly good results if they do so. If most firms in a particular industry operating in a dynamic environment adopt market-focused strategic flexibility, they are not likely to achieve competitive advantage. The need for skills relating to selection of options, identification of resources, deployment capabilities, and sense-making capacities constitute an impetus to the implementation of effective market-focused strategic flexibility. It is recommended that research into the key characteristics of industries and market-focused strategic flexibility be carried out to further explain the differences in the results obtained for different industries, and that this study be repeated for other countries to facilitate comparative analysis.