Exploring the role of market learning capability in competitive strategy

Abstract

It has been argued that a firm's capacity to learn from its market is a source of both innovation and competitive advantage. However, past research has failed to conceptualize market‐focused learning activity as a capability having the potential to contribute to competitive advantage. Prior innovation research has been biased toward technological innovation. However, there is evidence to suggest that both technological and non‐technological innovations contribute to competitive advantage reflecting the need for a broader conceptualization of the innovation construct. Past research has also overlooked the critical role of entrepreneurship in the capability building process. Competitive advantage has been predominantly measured in terms of financial indicators of performance. In general, the literature reflects the need for comprehensive measures of organizational innovation and competitive advantage. This paper examines the role of market‐focused learning capability in organizational innovation‐based competitive strategy. The paper contributes to the strategic marketing theory by developing and refining measures of entrepreneurship, market‐focused learning capability, organizational innovation and sustained competitive advantage, testing relationships among these constructs.