Marketing Competences and Strategic Flexibility in China

In the age of globalization, China presents a unique setting for organizations. The unprecedented growth of China’s economy, which remains the fastest growing in the world, offers significant potential for both Chinese and foreign investors. Today, increased levels of competition in the wake of China’s entry into the WTO have resulted in experimentation and risk-taking as ways of doing business in China. Business networking, as a form of social capital, has emerged as a growth strategy in China’s emerging market economy. However, the uncertainties and ambiguities prevalent in the Chinese business environment, in particular, in the area of creating of marketing competences and strategic flexibility in the Chinese context, are neither well understood nor effectively negotiated by the international investment community. In addition, the complexities in understanding the Chinese philosophy and Chinese management style have led to the anxieties and hesitation of foreign operators. As to the international investors, China’s business environment continues to present many challenges, particularly in how to manage effective business networks and ensure smooth knowledge transfer, especially in international joint venture projects. In the meantime, the Chinese investors are facing even more severe competition, both the internal and external business environment presents to them a double-edged sword with China’s access into the WTO.

This chapter presents the philosophical notions, theoretical perspectives, models, and empirical findings in the literature that are highly related. The objective of this chapter is to provide a brief definition of philosophical notions and present framework of the book, identify the need for us to focus on customer-focus performance rather than traditional financial performance, define the notion of customer-focused performance, discuss its role in the overall firm performance, and to see which and how different factors influence firm performance. Furthermore, the possible determinants are discussed by examining different perspectives of what factors can exert significant influences on firm performance. To this end, this chapter is divided into four parts. In the first part, definitions of constructs and constituents of core competences in this book are discussed and the framework of this book is given. In the second part, customer-focused performance is discussed in detail based on extant literature and the limitations of traditional financial performance are reviewed. In the third part, determinants of firm performance are analysed, in which several key research streams are reviewed, for example, the environmental determinism such as industrial organizational economics perspective, institutionalism perspective, etc. the strategic adaptation stream, and the resource-based view. Finally, a chapter summary is provided.

This chapter develops a theoretical framework for the key resource-based determinants of customer-focused performance based on the more focused literature review. The objective is to identify the resource-based determinants and the dimensions of customer-focused performance so that we can discuss the impact of each determinant on a specific dimension of customer-focused performance and develop propositions. To this end, this chapter is divided into six sections as follows: the first section presents the theoretical framework and gives some necessary descriptions. The second section makes a deep and systematic analysis of the dimensions of customer-focused performance and their relationships. In this section, the role of customer-focused performance in the theoretical framework is emphasized and each dimension of customer-focused performance is discussed, related literature is reviewed, their contributions in this research are analysed and important propositions are developed. The third section identifies the key resource-based determinants and examines their impacts. In this section, the specific role of each determinant in our theoretical framework is discussed, related literature is reviewed and important propositions are developed. In addition, in order to operationalize the complex construct-core competences, efforts have been made to separate it into three key constituents based on previous studies and our analysis.

This chapter aims at describing the structured survey in three cities of China to collect and analyze empirical data from collaborative firms and their customers for testing the proposed research framework and relevant propositions of this book and presenting the basic results for survey responses. This chapter is organized around eight major topics as follows. The first section presents briefly the research design. The second section gives a detailed description of sample design and data collection in Tianjing, Beijing and Shenzhen. It is in this part that the rationale for such a selection is discussed. The third section reports the questionnaire design and revision based on the pilot study. Then in the fourth section, a comprehensive analysis of the operationalization of these constructs involved in the conceptual framework is conducted. The fifth section presents the basic results of our surveys such as the response rates and samples’ profiles of the two specific surveys in this book. Then the methods of data analysis in this book are described in the sixth section. And the potential problems in this book are identified, checked and discussed in the seventh section. Finally, a chapter summary is presented in section eight.

This chapter aims at validating the constructs involved and building structural equation models to test the theoretical framework and relevant propositions of this book based on data collected in China. This chapter is organized around four sections to offer some critical golden rules concerning how to create strategic flexibility and core competence for superior customer focused performance. The first section explores the reliability and validity of the constructs and their relevant measurement models. And the second section presents the results of structural equation model building and proposition testing using data from customer survey and from the senior manager survey. In addition, we also apply some basic statistical techniques to analyze the combined data based on the senior manager survey and the customer survey to complement the above-mentioned testing in the third section. Finally, we will discuss the implication of these strategic elements and offer golden rules to international business.

This final chapter discusses the empirical findings and potential implications for both researchers and managers; in particular, it aims at advancing potential implications of the results in light of the questions and theoretical frameworks of this book. It also offers possible directions of future research. This chapter will first discuss the conclusions about the direct relationships between dimensions of customer-focused performance, the direct effects of organizational learning on core competences and the direct impacts of core competences on strategic flexibility. Then the direct impacts of core competences and strategic flexibility on customer-focused performance and the moderating role of environmental turbulence are explored. Next, more attention is given to the contributions and implications of this book to the literature and managerial practices. Finally, limitations are addressed and directions for future research are presented.