Firms' customer responsiveness: relationships with competition, market growth, and performance

Abstract

PurposeThe purpose of this paper is to examine important relationships pertaining to customer responsiveness of the industrial firm.Design/methodology/approachDrawing on strategy and competitive dynamics literature, a contingency model is developed. Hypotheses were tested on 432 Swedish industrial firms that market to business customers in growing or mature markets. Clean technology markets represented growing markets, while miscellaneous markets represented mature markets.FindingsThe relationship between the attention paid to customer responsiveness by the industrial firm and the attention paid to volume by the main competitor is negatively reinforced if the firm operates in a growing market. The relationship between the attention paid to customer responsiveness by the firm and competition‐based customer access obstacles in terms of supplier loyalty is positively reinforced if the firm operates in a growing market. The relationship between the firm's customer responsiveness attention and its financial performance is positively reinforced if the firm operates in a growing market.Practical implicationsThe industrial firm may find an efficient customer responsiveness strategy if the firm operates in a growing market. Because customer responsiveness does not improve firms' financial performance in mature markets, competition relationships are only important to examine in growing markets. Thus, customer responsiveness is more complicated than previously thought in the literature.Originality/valueThe paper presents a new model that integrates relationships among industrial firms' attention to customer responsiveness, competition, and performance. By including the market growth contingency, the model explains mixed findings in the literature regarding relationships between customer responsiveness and performance.