A study of relationships between environment, marketing strategy, and performance at the business level in organizations

Despite growing interest in marketing strategy research over the last decade, both the substantive and measurement streams of marketing strategy research are largely undeveloped. Field research assessing relationships among various components found in marketing strategy frameworks is difficult to find, while haphazard measurement approaches discourage substantive research by making any systematic accumulation of research findings an almost impossible task.;This study develops and assesses a set of measures for one marketing strategy construct, Business Level Marketing Strategy (termed BLMS). These measures are used to test hypothesized relationships among five BLMS dimensions (aggressiveness, defensiveness, adaptability, differentiation, and cooperation), two environmental variables (market attractiveness and competitive position), and one performance variable (business profitability). Focusing on both construct measurement and tests of substantive relationships, the study aims to strengthen the empirical foundation of marketing strategy research.;Analysis of covariance structures, implemented within a LISREL framework, is used to assess validity of measures and to test hypothesized relationships. Each of the study variables is operationalized in terms of managerial perceptions, with data collected from organizational informants representing the divisions, subsidiaries, and affiliates of the 530 largest American manufacturing companies.;Results support nine of the hypothesized relationships among study variables, five hypothesized relationships are found to be nonsignificant, and four relationships are significant but the relationships are opposite from those hypothesized. Market attractiveness positively affects defensiveness and adaptability and negatively affects differentiation and cooperation. Competitive position is found to positively impact aggressiveness, defensiveness, adaptability, differentiation, and cooperation. Aggressiveness negatively affects business profitability, but defensiveness is found to positively impact business profitability. Both market attractiveness and competitive position positively impact business profitability.;The tests of substantive relationships among environmental, marketing strategy, and performance variables reported here strengthen the empirical foundation of marketing strategy research. In addition, the marketing strategy measures developed in this study may be of future use to researchers, either directly in testing substantive relationships or as a basis for developing refined and extended marketing strategy measures.