Market orientation, strategic flexibility and business model innovation

Purpose This study aims to investigate how market orientation (MO) motivates firms to develop business model innovation and how such effects are moderated by strategic flexibility. Design/methodology/approach In this study, a questionnaire-based survey was undertaken to test the proposed hypotheses. The empirical study was conducted on a sample of 204 firms using two key informants (408 respondents) in China. The regression model is used to test the proposed model. Findings This research finds that both responsive market orientation (RMO) and proactive market orientation (PMO) have a positive effect on business model innovation. The effects of RMO and PMO on business model innovation are contingent on resource (coordination) flexibility in different ways. More importantly, this study finds that resource flexibility enhances the positive effect of RMO and weakens the positive effect of PMO. The study also finds that coordination flexibility enhances the positive effect of PMO. Originality/value The conclusion extends the business model innovation research from the view of dynamic capabilities. As one of types of dynamic capabilities, MO is also the important antecedent of business model innovation. Further, this research also discusses the role strategic flexibility plays in business model innovation.