International Journal of Asian Management (2004) 3: 37–51DOI 10.1007/s10276-004-0019-8

Article

Relation between market orientation and marketenvironment et al., in Korean firms entering toNorth American markets

Yonggyu KimDepartment of Trade and Distribution, Anyang University, Anyang, Koreae-mail: ygkim@aycc.anyang.ac.kr

Abstract This study was conducted to test the antecedent factors of market orientationand the relationship between market orientation and business performance of overseassubsidiaries. The author also investigates whether competitive strategy might affect thestrength or weakness of the market orientation—performance relationship. The results ofresearch show that the magnitude of the firm and market turbulence have significance asantecedent factors of market orientation, and competitive strategy can also moderate therelationship between market orientation and performance. Lastly, the results show thatthe relationship between market orientation and performance has a positive significance.

Key words Market orientation · Performance · Antecedent factors · Moderator variables

The subject of market orientation has become the central stage of the theory andpractice of marketing strategy for the past decade. It has modified the traditionalmarketing concept. The definition of the existing marketing concept is that thefirm knows the consumers’ needs and satisfies them, but it has not shown specificpractical methods. Market orientation has been developed as a marketing con-cept in terms of the whole company, and many researcher have been interestedin it and have performed studies on this subject (Greenley 1995; Kohli andJaworski 1990; Narver and Slater 1990; Slater and Narver 1994).

Narver and Slater (1990) developed a scale of market orientation and tested itseffect on business performance. Their scale of market orientation closely paral-lels Kohli and Jaworski’s definition and consists of three behavioral components(customer orientation, competitor orientation, and interfunctional coordination),each of which involves intelligence generation and dissemination and managerialaction (Slater and Narver 1994).

The recent research background on market orientation is that consumers’needs have been diversified, technologies have been developed fast, and compa-nies have competed intensively, so traditional consumer-oriented minds and thefactors of market environment have been considered in marketing activitytogether. Research trends related to market orientation have generally been

38 Y. Kim

divided into three themes. The first subject is direct causality between marketorientation and business performance (Narver and Slater 1990; Ruekert 1992).The second is research about moderator effects such as environmental variablesinfluencing market orientation and business performance (Day and Wensley1988; Diamantopoulos and Hart 1993; Greenly 1995; Jaworski and Kohli 1993;Slater and Narver 1994). The third is research related to the antecedent factorsaffecting market orientation (Jaworski and Kohli 1993).

Unfortunately, most previous research has concerned market orientation indomestic markets, and there are few studies of the antecedent factors of marketorientation and whether market orientation in international markets could affectthe business performance of overseas subsidiaries. Besides these, it is necessaryto study moderating effects by which market orientation might influence businessperformance according to the degree of the company’s competitive advantagein the future. Actually, when the firm enters into foreign markets and conductsinternational business activity, they have much difficulty in increasing theperformance of overseas subsidiaries because cultural, political, economic,and legislative regulations are different from domestic markets. Therefore it isnecessary to use marketing strategies suitable in local markets to increase theperformance of overseas subsidiaries. The purpose of this study is to test therelationship between market orientation and business performance by applyingthe concept of market orientation invented in domestic markets to overseassubsidiaries.

Additionally, the author tests whether a company’s characteristics and marketenvironment could influence market orientation as the antecedent factors ofmarket orientation in international markets.

Lastly, the article investigates whether competitive strategy as moderator ef-fect (variable) could affect the strength of the market orientation—performancerelationship.

Research model and hypothesis

Research model

Previous studies about market orientation have been mainly focused on testingits effect on business performance in domestic markets. Actually, foreign marketshave much more opportunity and threat than domestic markets. However, thereare few studies concerning market orientation—performance relationships ofoverseas subsidiaries operating in foreign markets. Therefore, this study investi-gates the relationship between market orientation in overseas markets andperformance by using the sample of a Korean subsidiary entering into NorthAmerican markets. Additionally, the author tests whether the company’s charac-teristics and local market environments as the antecedent variables influencemarket orientation and competitive strategies as moderator variables could affectthe strength of the market orientation—performance relationship. The model ofthis study is shown in Fig. 1.

Market orientation of Korean overseas subsidiaries 39

Hypothesis

The contents mentioned below are research hypotheses based on the studymodel.

Characteristics and market orientation of the firm The larger the magnitude of aninternational firm and the higher the degree of international experience, themore the firm will operate market-oriented business activity. Because large com-panies with much experience have abundant human and physical resources, it iseasy to collect local market information and share and diffuse it with otherdepartments. Because these companies can confront local market circumstancesflexibly, implementation of market orientation within the company might beconvenient.

Magnitude of the firm When the firm intends to extend the scope of businessthrough internationalization processing and gain hopeful performance, it isessential to invest production facilities such as construction of new factory and

Fig. 1. Research model

40 Y. Kim

marketing infrastructure. They need human and physical resources to obtaineconomy of scale and scope because of competition with local companies (Hoodand Young 1979). Therefore, large companies can easily supply such a hugeamount of investment (Buckley and Casson 1976; Kumar 1984).

Hypothesis 1: The larger the company’s size, the greater the extent of marketorientation.

Internationalization experience When the firm enters into overseas markets, ituses a high-entry mode through an incremental learning process according toaccumulation of Internationalization experience. The internationalization expe-rience of the firm leads to a learning effect that increases the ability of thebusiness to respond to the market environment fast and elastically. The degree ofinternational experience in overseas markets influences the market orientation ofsubsidiaries (Michael et al. 1977). The firm with internationalization experienceis able to use monopolistic assets that competitive companies cannot imitate easy.Therefore, international experience also might be the antecedent factor ofmarket orientation. The reason is that the firm with international experience canensure market needs and profit opportunities and continuously acquire informa-tion related to consumers and competitors, and all the employees can accessthese information easily.

After all, internationalization experience makes it easy to combine thestrength of interfunctional coordination, which is needed to realize the concept ofmarket orientation for providing more value to the consumers than competitors.Therefore,

Hypothesis 2: The greater the internationalization experience of the firm, thegreater the extent of market orientation.

Market environment and market orientation The factors of market environmentas moderator variables may weaker or strengthen the market orientation—performance relationship (Greenly 1995; Jaworski and Kohli 1993; Slater andNarver 1994), but other studies have shown that the factors of market environ-ment do not influence the market orientation—performance relationship(Narver and Slater 1990; Jaworski and Kohli 1993).

The results of established research have differed according to the operationaldefinitions of market orientation and the study samples used by researchers. Thisstudy tests empirically whether the factors of market environment as the anteced-ent variables influence market orientation.

When market orientation is considered as organizational culture, most studieson organizational culture have classified environmental factors as antecedentconditions (Lush and Laczniak 1987). This study also considers factors of themarket environment such as market turbulence, technology turbulence, competi-tive intensity, and market growth as antecedent factors of market orientation.

Market turbulence Market turbulence means the changing degree of consumers’needs and preferences. The firm does not need to adjust the marketing mix

Market orientation of Korean overseas subsidiaries 41

strategy in order to respond to consumers’ behavior efficiently when consumers’needs and preferences are stable, so the firm might be a less market-orientedorganization. To the contrary, if the degree of consumers’ preference is unstableover time, the firm does not respond to consumers’ needs in a timely fashion, sothat performance may be decreased. Thus, the firm will become a market—oriented organization when consumer preference is variable (Kohli and Jaworski1990; Slater and Narver 1994). Therefore turbulence preferences of local con-sumers will influence the market orientation of overseas subsidiaries in interna-tional markets. Jaworski and Kohli (1993) also found that market turbulence hasa positive effect on the market orientation—performance relationship, but Slaterand Narver (1994) conversely showed a negative relationship. Therefore,

Hypothesis 3: The greater the extent of market turbulence, the greater thedegree of market orientation.

Technology turbulence Technology turbulence means the changing degree oftechnology in products and service. Market orientation may become a tool ofcompetitive advantage when the firm can understand and satisfy consumers.Besides market orientation, when the company has fast-changing technology,they can have a competitive advantage through technological innovation (Tauber1974).

Fast Turbulent technology could not be considered importantly than slowtechnology in terms of market orientation. The reason is that technologicalinnovation in industry is inclined to concentrate much more on R & D than marketorientation (Hays and Abernathy 1980; Hays and Wheelwright 1984). The indus-try using stable technology depends on market orientation more because thisindustry has a low probability that it can gain a competitive advantage throughtechnological advantages (Kohli and Jaworski 1990; Slater and Narver 1994). Thestudies of Jaworski and Kohli (1993) and Slater and Narver (1994) found negativeeffects in the market orientation—performance relationship. Therefore,

Hypothesis 4: The lesser the extent of technological turbulence, the greater theextent of market orientation.

Competitive intensity As a competitive market leads consumers to make thenight choices, the firm should respond to consumers’ needs and preferencessensitively, but monopolistic or oligopolistic markets may reduce the necessity tomodify special products and service strategy for matching variable consumers’preference. The company under a greater competitive environment could be-come more market oriented than a lesser competitive one (Kohli and Jaworski1990; Slater and Narver 1994), but the studies of Jaworski and Kohli (1993) andSlater and Narver (1994) showed that competitive intensity does not have asignificant interaction in the market orientation—performance relationship.Therefore,

Hypothesis 5: The greater the extent of competitive intensity, the greater theextent of market orientation.

42 Y. Kim

Market growth The firm can pay little attention to market orientation if themarket demand is large. Because demand exceeds supply by a large marketdemand, consumers are inclined to accept products and service with ease. On thecontrary, a small market demand makes the firm concentrate more on marketorientation (Kohli and Jaworski 1990; Slater and Narver 1994). The study ofSlater and Narver (1994) found that an interaction relation between these vari-ables has a positive significance. Therefore,

Hypothesis 6: The lesser the extent of market growth, the greater the extent ofmarket orientation.

Relation between competitive strategy and market orientation—performancerelationship The following will test whether the competitive strategy of the firminfluences the market orientation—performance relationship.

Porter (1985) classified generic competitive strategy as cost leadership strategy,differentiation strategy, and focus strategy. According to the generic competitivelevel of the firm, the degree of market orientation and business performance isdifferent (Narver and Slater 1990). In the results of analysis using PIMS (ProfitImpact of Market Strategy) DB that tested the relation between competitiveadvantage and profitability, it was found that firms with greater competitiveadvantage realized higher performance. When the firm has a greater cost anddifferentiation advantage, the inner organization of the firm can becomemarket—oriented. Market orientation, as mentioned above, means customerorientation, competitor orientation, and interfunctional coordination (Narverand Slater 1990). Among those meanings, customer and competitor orientationare outside factors of the firm. Conversely, interfunctional coordination mightmake the firm become market-oriented because information diffusion and shar-ing within the firm could advance the cooperative relation. Price advantagestrategy could increase net revenue more than profitability due to a low pricepolicy. However, differentiation strategy might increase the net profit of thebusiness through high prices using nonprice competition. Therefore,

Hypothesis 7-1: The greater the extent of price advantage, the greater the effectof market orientation on quantitative performance (growth).

Hypothesis 7-2: The greater the extent of differentiation advantage, the greaterthe effect of market orientation on qualitative performance(profitability).

Market orientation and business performance The finding of Kohli et al. (1993)was that market orientation has a positive effect on business performance.Narver and Slater (1990) also studied the relationship between market orienta-tion and business performance by using the sample of commodity andnoncommodity industries. The result was that market-oriented firms also showedgreater performance. Therefore,

Hypothesis 8: The greater the extent of market orientation, the greater theperformance of the overseas subsidiary.

Market orientation of Korean overseas subsidiaries 43

Research method

Sample selection

The sample of this study selects Korean subsidiaries entering into NorthAmerican markets. The population group is “Korean Firm’s Directory Enteringinto Overseas in 1998” published by the Korean Trade Promotion Association.The survey questionnaires are sent by mail to 307 Korean subsidiaries operatingin North American markets. Sixty-one questionnaires are selected as valid sam-ples; the final response rate is 20%. The survey period is one month from May 1to May 31.

Variable measurement The variables of this study largely are four kinds, that is,company’s characteristics, market environment factors as the antecedent variableof market orientation, market orientation as independent variable, businessperformance as dependent variable, and competitive strategy as moderatorvariable.

This study uses the concepts of market orientation jointly, such as marketintelligence generation, dissemination, and intelligence responsiveness used byKohli and Jaworski (1990) and Kohli et al. (1993); customer orientation, competi-tor orientation, and interfunctional coordination measured by Narver and Slater(1990); and the method used by Kwon (1996), who studied market orientation ofexport firms.

This study defines market orientation of overseas subsidiaries as three kinds,that is, local market intelligence generation based on local consumers’ needs andcompetitors, local market intelligence dissemination and interfunctional coordi-nation, and local market intelligence responsiveness; each variable is scaled asfive items. In the scale of the firm’s characteristics, the size of the firm is measuredas the number of employees. Internationalization experience is measured as theyear involved in overseas business for the first time. Cost and differentiationadvantage is measured as 5-Likert scales.

The measurement of market environment factors classifies each variable asthree items by 5-Likert scales. In detail, market turbulence is measured as thechanging degree of local consumers’ preference about products and service, newproducts’ preference, and modified products’ preference. Technology turbulenceis measured as changing degree of technology, R & D investment, and newproducts or manufacturing process innovation. Competitive intensity meansoverall intensive degree, the responsive extent of competitors, and the number ofcompetitors.

Market growth is measured as market size, the extent of market growth, andthe degree of consumers’ interest. Business performance of overseas subsidiariesis divided into growth and profitability. Growth is measured as the average salesgrowth rate compared with competitors for three years, and profitability is mea-sured as the average net profit growth rate compared with competitors for threeyears.

44 Y. Kim

Method of analysis

This study translates nominal scales as 5-Likert scales, adds these to five otherinterval scales, and averages them. Multiple regression analysis is used to test therelationship between the firm’s size, internationalization experience, marketturbulence, technology turbulence, competitive intensity, market growth, andmarket orientation (hypotheses 1–6). Simple regression analysis is used to testbetween competitive strategy as moderator variable and market orientation-performance relationship (hypothesis 7). In this study, competitive strategy isclassified as price advantage and differentiation advantage; greater or lesserdegree of competitive advantage is based on the median in the 5-Likert scale, thatis, exception median value; measurement data are analyzed by classification intoa greater competitive advantage group and a lesser competitive advantage group.Lastly, the relationship between market orientation and business performance istested by simple regression analysis (hypothesis 8).

The summary of related measurements and scales of variables is as follows(Fig. 1).

Analysis and results

Reliability and validity test

Internal consistency of variables to test the reliability of independent variables ismeasured by Cronbach’s alpha coefficient. Among these variables, internation-alization experience and firm size are excluded because of 1 scale item.Cronbach’s alpha coefficients in Table 1 exceed .60 as general acceptance base insocial science. However, although alpha coefficient of market intelligencegeneration among the concepts of market orientation is .55, as studies on marketorientation of overseas subsidiary are few and exploratory research, this studyaccepts this coefficient due to beyond .50 as acceptance base of exploratory study(Nunnally 1978).

Pearson correlation analysis is used to test discrimininant validity that canmeasure related concept accurately. Discrimininant validity is high in the case ofhaving low correlation between variables. As we show in Table 2, because thereis construct validity in the case that absolute values of the correlation coefficientare below .39, these variables are used in hypothesis test. However, marketturbulence and technology turbulence may cause a multicollinearity problembecause of high correlation (.63). Therefore, the following method of analysis istested to determine whether both variables have multicollinearity problem.Although the correlation coefficient (.63) between these two variables does notexceed .70, the method of Variance Inflation Factor (VIF) is used to knowmulticollinearity problem clearly. This is the view that if the value of VIF be-comes more than 10, a multicollinearity problem might exist (Marquardt 1970).As we show in Table 3, because the VIF value of the variables is less than 1.8,there is no multicollinearity problem. Therefore, these variables are also used totest the hypothesis as independent variables together.

Market orientation of Korean overseas subsidiaries 45

Hypothesis test

Antecedent factors of market orientation Table 4 is the result of multiple regres-sion analysis concerning whether antecedent factors of market orientation, suchas internationalization experience, firm size, market turbulence, technology tur-bulence, competitive intensity, and market growth might affect market orienta-tion. In the result of the hypothesis test, as the firm’s size and market turbulenceare statistically significant (P � .1), these are supported.

However, internationalization experience, technology turbulence, competitiveintensity, and market growth are statistically nonsignificant, so those variablesare not accepted in the hypothesis test. These results mean that the greater the

Table 1. Reliability analysis of variablesItem-to-total Cronbach’s

Variable Operational definition correlation alpha

Market orientationIntelligence Budget for market research .3010 .5491

generation Market research department .2850Receiving of market information .4143Intermediary interview .4028Participation in international exhibition .2438

Intelligence Interfunctional coordination .5356 .7654dissemination Relationship with local intermediary .5997

Information sharing between departments .3880Report of dealer’s situation .5706Meeting between departments in .6226

policy decisionIntelligence Consumers’ consideration about new .4465 .6434

responsiveness products decisionIntermediary, competitor’s consideration .5953Consideration about deal condition .3910Consideration about consumers’ .4827

dissatisfactionProducts suitable in local market .1168

Market turbulence Preference variation of consumer .4201 .7204Product preferencePurchase trend of same kind of products .6461Products request of new consumers .5718

Technology turbulence Degree of technology turbulence .6800 .8280Technology and R & D investment .7169Innovation of new products and processing .6712

innovation

Competitive intensity Degree of competitive intensity .6865 .8007Degree of competitors’ responsiveness .6080Numbers of competitors .6586

Market growth Market size .4936 .7188Market growth .7187Consumers’ concern .4290

46 Y. Kim

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Market orientation of Korean overseas subsidiaries 47

extent of the firm’s size and market turbulence, the more the overseas subsidiarymight become a more market-oriented organization.

Moderator effects of competitive strategy As we show in Table 5, competitivestrategy is divided into cost competitive advantage and differentiation competi-tive advantage. According to the high and low extent of competitive advantage,regression analysis is used to test whether market orientation could affect per-formance. The results of the hypothesis test show that the price advantagestrongly influences a relation between market orientation and quantitative per-formance (sales growth rate). This hypothesis is accepted because of statistical

Table 3. Multicollinearity test using the method of variance inflation factorCorrelation Collinearity statistics

Model Zero-order Partial Part Tolerance VIF

Experience .031 .094 .086 .870 1.149Size .240 .242 .226 .956 1.046Market-T .264 .244 .228 .584 1.711Technology-T .101 �.158 �.145 .562 1.780Competition .206 .146 .134 .772 1.296Growth .183 .150 .138 .836 1.197

VIF, variance inflation factor

Table 4. Results of multiple regression analysis of antecedent factors of marketorientationVariable Coefficient Standard error Standardized coefficient P-Value

Experience .106 .161 .092 .516Size 3.057 .002 .231 .091*Market turbulence 1.205 .692 .298 .088*Technology turbulence �.672 .606 �.194 .273Competitive intensity .651 .635 .153 .310Market growth .717 .681 .151 .298

*P � .1

Table 5. Moderator effects between competitive strategy and market orientation-performance relationship

Sales growth rate Net profit growth rate

High competitive Low competitive High competitive Low competitiveModerator advantage advantage advantage advantagevariable group group group group

Price 4.261** .104 1.978 1.761advantage (.017) (.054) (.017) (.075)

Differentiation 5.660*** .154 4.767*** .130**advantage (.013) (.026) (.014) (.010)

*P � .1; **P � .05; *** P � .01

48 Y. Kim

significance (P � .05). Also, in the case of differentiation advantage, the studyhypothesis is accepted. This means the higher the differentiation advantage, themore the market orientation affects qualitative performance (net profit rate).

Market orientation and performance Table 6 shows market orientation has astatistically significant effect on both sales growth rate and net profit growth rate.The results show that market orientation influences growth (5.978) more thanprofitability (3.484). This means that market orientation might contribute toimprove quantitative performance more than qualitative performance.

Discussion

The results of the empirical study noted previously can be discussed in threeparts. First, let us discuss the antecedent factors of market orientation in overseassubsidiaries. Internationalization experience of a firm as an antecedent factor ofmarket orientation is not supported due to having no statistical significance in theresearch hypothesis. However, as expected, the direction of the sign appearspositive (�). This result means that generally lots of foreign experiences maycreate high market orientation, but there is no statistical confirmation.

The magnitude of the firm is supported for antecedent factor of market orien-tation, as there is a statistical significance. This is understood because a largecompany can have more human resources needed to acquire and create marketinformation with ease, so that it is easy to pursue a market-oriented strategy.

The hypothesis of market turbulence, that is, the greater the extent of variabil-ity of consumers’ needs and preferences, the greater the market orientation ofthe firm to satisfy consumers, is supported by statistical significance. This isconsistent with studies of Jaworski and Kohli (1993) and Slater and Narver(1994). This means that if consumers’ preference is not stable and changes fast,the firm could be a market-oriented organization in order to change and imple-ment marketing policy to satisfy consumers’ needs flexibly.

Although technology turbulence does not have statistical significance, thedirection of the sign is negative (�), as expected. This means that a rapidlychangeable technology industry may be more focused on R & D than marketorientation as compared with a stable one. However, since this contention doesnot have statistical confirmation, it is not supported.

The relationship between competitive intensity and market orientation showsa negative sign (�), as expected, but there is no statistical significance. Thismeans that great competition in the market can increase the width of consumer

Table 6. Results of regression analysis on market orientation and performancerelationship

Sales growth rate Net profit growth rate

Coefficient Standard error P-Value Coefficient Standard error P-Value5.978*** .011 .000*** 3.484 .010 .002***

* P � .1; **P � .05; *** P � .01

Market orientation of Korean overseas subsidiaries 49

choice greatly, so the firm should respond to consumers’ needs and preferencessensitively.

Conversely, in monopolistic and oligopolistic markets, modification ofproducts and service strategy may not be necessary for responding to changingconsumers’ preference.

The direction of the coefficient sign between market growth and market orien-tation shows a positive correlation, conversely to what the researcher expected,but this hypothesis is not supported due to having no statistical significance. Thismeans we cannot assert for certain that a large market demand causes a firm tobe little interested in market orientation, but a small market demand leads a firmto focus on market orientation more for satisfying consumers’ needs efficiently.

Next let us discuss moderator effects between competitive strategy and themarket orientation-performance relationship.

The researcher suggests the degree of price and differentiation advantageaffects the market orientation-performance relationship. Moderator effects be-tween price advantage and the market orientation-performance relationship aresupported because of statistical significance (P � .05). This means that the higherthe price advantage, market orientation influences more quantitative perform-ance (growth) than qualitative performance (profitability). The researcher sug-gests the hypothesis that the higher the differentiation advantage, the moremarket orientations affect qualitative performance than quantitative. The resultshows that the relation between market orientation and performance also has apositive significant correlation according to the extent of differentiation advan-tage. As also expected, high differentiation advantage has a greater influence onthe relation (4.767) between market orientation and quantitative performancethan low differentiation advantage (.130). This means that price advantageinfluences quantitative performance more than qualitative performance but dif-ferentiation advantage might become converse.

Lastly, market orientation and performance show a positive correlation. Thisresult is consistent with the studies of Narver and Slater (1990), Kohli et al.(1993), and Kwon (1996). This study also shows that the correlation betweenmarket orientation and quantitative performance (5.978) is higher than thecorrelation between market orientation and qualitative performance (3.484), sothe greater the market orientation, the more both quantitative and qualitativeperformance is improved.

Conclusion and practical implications

Studies on market orientation have been focused on the relation between marketorientation and business performance, so studies concerning the antecedent fac-tors of market orientation have been relatively few. Also in terms of researchfirms, previous studies have been limited to domestic firms. However, this studytested empirically what the antecedent factors of market orientation are, whethercompetitive strategy as a moderator variable might influence the marketorientation-performance relationship, and market orientation could affect the

50 Y. Kim

performance of overseas subsidiaries. The study results show that the antecedentfactors of market orientation are as follows. The larger the firm’s size and thegreater the market turbulence, the greater the market orientation. High priceadvantage has a more positive effect on quantitative performance (sales growth)than low prices, but differentiation advantage strategy affects qualitative per-formance (profitability) more than quantitative performance (sales growth).

Finally, competitive strategy is understood as a moderator variable interveningin the market orientation-performance relationship. The relation between mar-ket orientation and performance shows, as in previous studies, that the greaterthe market orientation, the higher the business performance. On the basis of thisstudy, the practical implications for localization of Korean subsidiaries extendingmarkets’ scope in local markets are as follows. The international firm shouldcreate local information related to local consumers, competitors and intermedi-ary merchandisers and share and diffuse these with overseas intermediary mer-chants and related domestic and foreign departments. Through interfunctionalcoordination, implementation of marketing policy for confronting the local mar-ket situation may improve the business performance of overseas subsidiaries.Additionally, in the case that market turbulence in local markets is high, anoverseas subsidiary could become a market-oriented organization. This meansthat when local consumers’ preference changes rapidly, the firm should recognizeconsumers’ needs in a timely fashion and practice local market-oriented market-ing policy.

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Table 7. Summary of results of hypothesis testsHypothesisno. Hypothesis contents Expectation Result

1 Internationalization—market orientation � NotExperience—market orientation supported

2 Market size-market orientation � �

3 Market turbulence-market orientation � �

4 Technology turbulence-market orientation � Notsupported

5 Competitive intensity-market orientation � Notsupported

6 Market growth-market orientation � Notsupported

7-1 Price advantage-market orientation performance � �

7-2 Differentiation-market orientation performance � �

8 Market orientation-performance � �

Market orientation of Korean overseas subsidiaries 51

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