Outside-in marketing capability and firm performance

Employing an outside-in strategic perspective, we address an under-researched question in the extant marketing literature: How and when do firms, by virtue of their outside-in marketing capability, manage to achieve superior performance? We find that outside-in marketing capability leads to superior firm performance via its impact on inside-out marketing capability and strategic flexibility. Outside-in marketing capability provides a basis for the firm to update its inside-out marketing capability and to flexibly allocate resources leading to a performance advantage. Our results suggest that modeling outside-in marketing capability along with inside-out marketing capability and strategic flexibility provides a more accurate picture of firm performance outcomes and enhances the efficacy of marketing capability logic with respect to firm performance. We also show that outside in marketing capability positively affects firm performance only when transformational leadership and employee proactivity are relatively high. When transformational leadership and employee proactivity are low respectively, increasing outside-in marketing capability can have counter-productive impact on firm performance. This interaction between outside-in marketing capability and human capital shows that both factors work together to achieve superior firm performance. The results suggest that firms stand to gain more from outside-in marketing capability by devoting resources to developing leadership skills and nurturing employee proactivity. We conclude the article by discussing the implication of this research for theory and practice, highlighting the limitations and offering future research directions.