MARKET ORIENTATION AS DRIVER OF SMES PERFORMANCE: EMPIRICAL EVIDENCE FROM SMES IN DISTRICT PESHAWAR, PAKISTAN

Abstract

The present study explores the relation between Market orientation and Performance of small and medium enterprises (SMEs) operating in District Peshawar. Based on the MKTOR model, the study investigated the impact of three dimensions of market orientation i.e., competitor orientation, customer orientation and inter functional coordination, on firm financial and non financial performance. In doing so, the study used cross sectional survey design. Data was collected from 194 small and medium enterprises owner managers using judgmental and convenience sampling. Multiple linear regression analysis was used after diagnostic tests for reliability and correlation using SPSS. The findings reveal that all the dimensions of market orientation have a statistically significant and positive impact on firm financial and non-financial performance. Particularly customer orientation has highest statistically significant effect on both performances. The findings are in lined with Resource Based View; substantiate that market orientation act as strategic capability that provides competitive advantage. The findings depict that adopting market orientation practices can enhance small and medium enterprises growth. Competitor analysis, improving inter functional communication channel, investing in customer feedback system and encouraging training programs can significantly enhance market orientation practices among SMEs operating in Pakistan.