MARKET ORIENTATION, INNOVATION, AND TELECOMMUNICATION FIRM’S PERFORMANCE IN AN EMERGING MARKET: THE STRATEGIC NEXUS OF SUSTAINABLE COMPETITIVE ADVANTAGE

Abstract

In today’s volatile, uncertain, complex, and ambiguous environment, sustaining superior performance poses particular challenges for firms in emerging markets, where rapid growth often coexists with institutional instability and resource constraints. Drawing on the resource-based view and dynamic capabilities theory, this study examines how market orientation (MO) and innovation capability (IC) contribute to firm performance in the telecommunications industry. Adopting a mixed-method research design, the study first conducted qualitative interviews with industry experts to refine constructs and contextualize measurement items. Subsequently, a survey of managers from firms in telecommunications was analyzed using partial least squares structural equation modeling. The findings reveal three main contributions. First, MO significantly enhances IC, demonstrating the interdependence of dynamic capabilities rather than their isolated effects. Second, MO and IC exert no direct influence on firm performance but instead operate through sustainable competitive advantage (SCA), confirming the full mediating role of SCA. Third, the study reconceptualizes SCA as a two-dimensional construct, namely differentiation-based and innovation differentiation capturing the unique technological and competitive dynamics of telecommunications. By combining qualitative insights with quantitative validation, this study advances theoretical understanding of the capability-advantage-performance nexus and provides practical guidance for emerging-market firms to strategically leverage MO and IC in creating long-term competitiveness.