One of the most central questions in marketing and strategic management is the following: Why do some companies outperform others? There is still only a partial understanding of what succeeding in business in different operating environments requires. Since companies have limited resources, the successful allocation of these resources is vital.
The doctoral dissertation of Matti Jaakkola, M.Sc. (Tech.), completed at the Aalto University School of Economics identifies several background mechanisms affecting the success of businesses.
According to the study, companies can have very complex recipes for success and a certain result can often be achieved through several different routes. These recipes for success are strongly context-dependent, so what works in one country or market environment may not work in another.
Taking the operating environment and the capabilities of a company into consideration is an essential requirement for success. Otherwise, the plans made based on distorted analyses can weaken the impact of marketing and prevent a company from succeeding.
Capabilities help companies to better benefit from their resources
Unlike previous studies, Jaakkola's doctoral dissertation answers the question how strategic orientations (e.g. approach towards customers and innovation) and marketing capabilities (e.g. a company's product development and customer relationship management competence) affect business performance separately and as a combined entity.'
According to the results, capabilities, in particular, can help companies to benefit from the value hidden in resources. Even an exemplary understanding of the customers will not improve the performance of a company if this understanding is not used to develop value production processes and business. Strategic orientations, on the other hand, guide the development of capabilities.
Since there are synergistic relationships between orientations and capabilities, together they improve the performance of businesses more than on their own. This is why companies should look at resources and capabilities as a whole affecting their performance.
The study is part of the StratMark project by the Aalto University School of Economics and the Hanken School of Economics.
Explore further: How limiting CEO pay can be more effective, less costly