An Examination of the status of competitor orientation and ...

1 InternationalResearch Journal of Applied and Basic Sciences 2014 Available online 2251-838X /Vol,8(2):231-240 Science Explorer PublicationsAn Examination of the statusof competitororientation and customer orientation of SMEs andTheir Relationship with Customer s PerformanceA Case Study:Industriesin Ilam ProvinceAliReza Mahmoodean1,Yasan Allah Poor Ashraf2,Seyed Reza of Master of business Administration-Marketing InIslamicAzad UniversityKermanshah Professor in Management Department of Ilam Professor of Management Department inIslamicAzad UniversityKermanshah branchCorresponding Author main aim of present study is to examine the relationship of competitor orientation andcustomer orientation with customer s performance in small and mediumindustries of province of of research is a type of correlative survey.

2 In thisstudy,the relationship of competitor orientationand customer orientation with customer s performance in small and medium industries of province of Ilamwould be examined. Population of the study consists of small and medium industries in province of Ilamwith 141 samples using relative stratified random sampling method. The questionnaire was applied s alpha coefficientof was obtained for the questionnaire. Researchdata was analyzed using LIZREL and at the level of descriptive statistic, frequency percentage, andcolumn chart and at the level of inferential statistic, structural equations were used. The findings ofresearch indicate that two hypotheses of the research are confirmed.

3 Therefore, competitor orientationand customer orientation of SMEs have a positive significant relationship with increasing performance Words:customer orientation , competitor orientation , Customer performance, Structural and complicatedevolutions during recent decades and also acceleration of globalization have madedifferent countries trying to receive the evolutions more than ever (Rao, 1987). Whatever was assumed as aneconomic advantage until some previous decades included to set upand to keep active big enterprises and it wasargued that the bigger are these enterprises, the more dynamic and more powerful would be the economicsituation. Although this assumption was prospered during some decades, based upon which giant firms wereappeared, recent evolutions, especially population pressures, from time to time innovations, complicacy ofmanagement and decision making processes, the need for immediate and necessary decision makings, andcommerce resulted from activities of small and medium enterprises have revealed the importance of theseenterprises (SabaghKermani, 1999).

4 During recent decades, fundamental changes have been occurred in business areas. These changes haveresulted in such a situations, in which small and medium enterprises by respecting their role in employment andeconomic development of countries, have played an expanded, diverse, and important part in developing countries(,Kula and Tatoglu 1, 2003).In addition to many effective factors, competitor orientation and customer orientation of SMEs and services ofsmall industries at world s markets depend upon market orientation as an important and strategic factor. In otherwords, SMEs should recognize carefully the features of target markets, characteristics and needs of customers andperformance of competitors within these markets and provide required regulations for competition in these marketswithin their own organizational system to represent their competitor orientation and customer orientation .

5 Theframework of present study is the direct and indirect relationship of competitor orientation and customer orientationand their relationship with customer s performance. It means that competitor orientation and customer orientationIntl. Res. J. Appl. Basic. Sci. Vol., 8 (2),231-240, 2014232have been related to customer s performance both directly and indirectly through making value. By considering SMEsstudied in present research, the orientation of discussions is towards small industries. Respecting limited resources insmall and medium enterprises, taking attention to the situation of competitor orientation and customer orientation hasa high importance, so that many of researchers consider having failure in mentioned factors as the main reason offailure in these enterprises (industries annual report, 2013).

6 Theoretical literature reviewCompetitor orientationAccording to(Narver and Slater 1990, pp21-22). competitor orientation , as an element of marketorientation, means that a seller understands the short-term strengths and weaknesses and long-term capabilitiesand strategies of both the key current and potential competitors . However, small organisations seem to viewcompetitor orientation differently and are not as concerned with long-term strategies. Theliterature suggests thatmost small businesses are short-term oriented (Carson 1990, Harris and Watkins 1998), and that short-term resultsare perceived to be more important than long-term strategic issues (Harris and Watkins 1998). Managers in smallbusinesses are more concerned with running daily operations than with long term business planning (Amer andBain 1990, Robinson and Pearce 1984).

7 Hence, for small businesses, short-term results are often a priority overprojected long-term advantages. However,in order to develop a sustainable competitive advantage, managersmay need to improve appropriate small business marketing and planning orientation as an element of market orientation means that seller recognizes weaknesses,strengths,and capabilities, and also long-term strategies of his current key potential competitors (Narver andSlater, 1990). competitor oriented firms are seeking for determining their weakness and strength in the firm not onlybased on theirs products and marketing, but also according to processes and the organization.

8 They regularlyreview their capabilities towards others based on skills, and knowledge of individuals, technical and physicalsystems, management systems, organizational structures, values, and cultural norms (Birchall and Tavstiga, 2005).The effect of competitor orientation indicates that this orientation can be helpful for innovation of new product and itincludes statements of Lee and Calanton (1998) that found that competitor s knowledge is always correlated withadvantages of new product. competitor s knowledge enables identification of all of available and developingtechnology collections and allows orientations timing on consumer s behavior and also flourishes innovation of newproduct (Augusto & Coelho, 2009).

9 As mentioned above, several researchers regard competitor orientation as an important part of what isreferred to as market orientation ( Han et al. 2000, Gray et al. 1998, Narver& Slater 1990). Competitororientation comes alongwith an organization wider understanding of what characteristics has the market where it isoperating. An exclusive customer focus may result in incomplete business strategy and action (Han et al. 1998). competitor orientation refers to a firm s ability to identify its competitors, understand and respond to the strengths,weaknesses, capabilities and strategies of those competitors, and constantly collect competitor information fromthe marketplace (Han et al.)

10 , 1998; Im and Workman, 2004; Narver and Slater, 1990).Yet, small firms understand competitor s orientation in different way and they are not related to long-termstrategies. Studies show that most of small businesses are short-term oriented (Carson, 1990), and long-termresults are considered to bemore important than short-term strategic results. Managers in small businesses aremore related with implementing daily operations rather long-term business planning. Therefore, in smallbusinesses, short-term results are often a priority over long-term advantages. However, in order to developingstable competitive advantage and ultimately reaching to manager s better performance should improve marketingskills and business planning.