The first Blockbuster store, an American-based chain of DVD and video game rental, opened in Dallas, Texas in 1985. In the following two decades Blockbuster experienced a high popularity and tremendous growth, including well known advertising campaigns during the Super Bowl. Blockbuster became a multi-billion dollar company with over 6,500 stores in the U.S. and 17 countries worldwide, and the world leader for video renting. During this time, Blockbuster scored high on customer satisfaction rankings and introduced user-based innovations, for example “special weekend packs” and “no-late-fees” pricing options. However smaller rivals like Netflix and Redbox recognized what Blockbuster had failed to - that customers’ expectations were changing. Although Blockbuster conducted regular customer surveys and market tests, they were not aware that due to new technological possibilities, customers would demand more convenience, service, and value in the future. While Netflix and Redbox successfully identified these upcoming needs and provided solutions, Blockbuster failed to do so and saw significant revenue losses over the past years. Blockbuster became a laggard, and finally filed for bankruptcy on September 23, 2010
This chapter presents a comprehensive review of the conceptual foundations that lead to the construct development in Chapter 3 and the formulation of the hypotheses in Chapter 4. The first part of this chapter introduces the resource-based view of the firm as the theoretical background of this study and elaborates on the two dimensions of customer orientation, responsive customer orientation and proactive customer orientation. To gain a clearer understanding of how performance might be affected by proactive customer orientation, research that has been conducted in this field is reviewed in the second part. The third part of this chapter differentiates between the proactive customer-oriented climate and proactive customer-oriented processes based on evidence from specialized departments and insights from existing research, and finally the conceptual model is developed.
The primary goal of scale development is to create a valid measure of an underlying construct. The scale development process of proactive customer-oriented climate and proactive customer-oriented processes follows the guidelines of Churchill (1979), Gerbing and Anderson (1988), and DeVellis (2003) and is based on the conceptualizing of the two constructs in Chapter 2.5. First I point out some limitations of existing scales and explain the need to develop new scales for climate and processes. Then the generation of an item pool is described, including a meta-analysis of in-depth studies related to proactive customer orientation, interviews and workshops with managers, and expert judgments. Based on a sample of 420 key informants from various industries, I examine reliability, validity, and generalizability of the new scales.
In this chapter, a number of hypotheses regarding the impact of proactive customer orientation, its antecedents, and contingency factors are developed. Overall, findings from literature and my qualitative inquiries indicate that proactive customer orientation positively affects customer value and business performance. However, it still lacks insights of whether proactive customer-oriented climate and proactive customeroriented processes affect exploratory as well as exploitative innovation, and about contingency factors that moderate these relationships (see Chapter 2.3.2 for details). Further, little is known about the antecedents for proactive customer orientation. Thus, based on the conceptualization of proactive customer-oriented climate and proactive customer-oriented processes from the previous chapter, these relationships are examined. To overcome limitations of existing research (Connor 2007; Ketchen et al. 2007), I develop my hypotheses along the entire underlying framework of the resource-based view. The performance implications of proactive customer orientation in existing studies are displayed in Figure 4–1 and include exploratory innovation, customer value, and new product performance, all investigated separately. The framework of the hypothesized main effects is provided in Figure 4–2 and includes the strategic resource, the strategic action, the competitive advantage, and the resulting performance implication. Thus this study investigates proactive customer orientation and its consequences are much more detailed than previous research.
This chapter discusses the design and the results of the empirical study that was conducted to test the hypothesized relationships. A cross-sectional study of business units was considered to be the ideal way of inquiry in the current context. Firstly, the quantitative survey complement and co-operate with the explorative research from the previous chapters and the qualitative methods employed in the next chapter to gain richer insights (see Chapter 1.3). Secondly, it is necessary to examine business units from distinct firms and industries to gain insights about different organizational characteristics (e.g., business unit age, business unit size, type of culture). Thirdly, the theories and research traditions from which the hypotheses are derived (e.g., market orientation and innovation management research) are usually based on cross-sectional methods to increase the validity and generalizability of the results. To overcome potential limitations of this research approach, key informant bias and common method bias are addressed with various control mechanisms.
In the previous chapters, insights about climate and processes that lead to proactive customer orientation, the performance implications resulting from proactive customer orientation, organizational antecedents that support a proactive customer orientation and organizational characteristics that determine the relative importance of proactive customer-oriented climate and proactive customer-oriented processes have been achieved. However still little is known of how firms may systematically achieve a high level of proactive customer orientation, and about typical patterns of market-based innovations that firms may follow. Thus the first part of this chapter develops a systematic change process to increase proactive customer orientation, based on the qualitative as well as quantitative inquiries of this work. The obtained insights suggest four-steps to develop and benefit from proactive customer orientation. The second part consists of a cluster analysis resulting in different patterns of market-based innovations. The third part introduces typical firms for each pattern and provides situation-specific recommendations of how firms should optimize their proactive customer orientation.
The last chapter presents a final discussion of the results and the implications of this dissertation. More specifically, this chapter is structured as follows: The first part of this chapter briefly reiterates the research gaps and results for each of the research questions. The second part reviews on a more general level the theoretical and managerial contributions of this dissertation. This is followed by a discussion of the limitations of the present findings. Finally, some of the factors that could not be considered in the present study are described and some additional suggestions for future research are given.
