Crafting strategy for international marketing: outside-in or inside-out?

Abstract

Purpose Drawing on the resource-based view, dynamic capabilities and exploration literatures, the purpose of this paper is to simultaneously investigate the impact of outside-in (OI) and inside-out (IO) strategic approaches on international strategic performance. Design/methodology/approach A survey-based quantitative study was used. The final sample consisted of 202 internationally active SBUs of Israeli firms. Data were analyzed using structural equation modelling. Findings OI approach to strategy enhances international performance more than IO does. OI is antecedent of exploratory marketing capabilities (MCs), while IO is antecedent of exploratory technological capabilities (TCs). The direct positive effect of exploratory MCs on performance is twice as strong as exploratory TCs are. Additionally, exploratory MCs positively impact performance through product adaptation. Practical implications To enhance international performance, managers should devote attention to an OI approach by incorporating a market orientation with responsive flexibility. Managers should be aware that exploratory MCs are more important in an international context than exploratory TCs are. Stakeholders such as venture capitalists can use the OI–IO model to predict which international venture is more promising. Originality/value This paper contributes to the international marketing field by shedding light on the OI–IO debate, its transformation into exploratory capabilities and how it relates to the standardization–adaptation debate. New and broad OI–IO’s conceptualizations are developed and new viewpoints for understanding how international marketing should work and what motivates firms to adapt are offered. Overall, an OI–IO typology helps to bring order to an otherwise confusing conceptual landscape.