Speed or quality? How the order of market entry influences the relationship between market orientation and new product performance

The role of market orientation as an antecedent of new product performance has been extensively documented in the literature. What is less clear, however, is how firms should make use of their market orientation under different market conditions. This study addresses this question by investigating how market orientation leads to superior new product performance for products that enter the market at different times. In particular, the study examines the moderating effect of order of market entry on the mediated relationship between market orientation and new product performance via product quality and innovation speed. Data from a sample of 244 new product development projects show that a firm's market orientation can improve the performance of first-to-market products and late entrants by facilitating the development of quality products, whereas it can improve the performance of early entrants by facilitating greater innovation speed.

Research Highlights
► This study examines the role of market entry order as a moderator of the mediating effects of innovation speed and product quality on the MO–NP performance relationship.
► The findings indicate that the performance of first-to-market products, early entrants, and late movers is related to the specific use that firms make of its MO, whether it is developing high-quality products or accelerating innovation speed.
► Firms can improve the performance of first-to-market products and late movers by using MO to develop high-quality products, whereas they can improve the performance of early entrants by using MO to increase innovation speed.
► Because market entry order is not entirely under firms' control, firms should remain sufficiently flexible to shift their MO focus between product quality and innovation speed as market conditions change in the short run.