SOURCES OF COMPETITIVE ADVANTAGE FOR EMERGING FAST GROWTH SMALL-
TO-MEDIUM ENTERPRISES: THE ROLE OF BUSINESS ORIENTATION, MARKETING
CAPABILITIES, CUSTOMER VALUE, AND FIRM PERFORMANCE
Caroline Tan Swee Lin
BBus (Marketing), BBus Com (Hons)
School of Management
Business Portfolio
RMIT University
February 2007
A thesis submitted in fulfilment of the requirements for
the degree of Doctor of Philosophy from the
Royal Melbourne Institute of Technology
Statement of Authorship
I certify that except where due acknowledgement has been made, the work is that of the author
alone; the work has not been submitted previously, in whole or in part, to qualify for any other
academic award; the content of the thesis is the result of work which has been carried out since
the official commencement date of the approved research program; and, any editorial work,
paid or unpaid, carried out by a third party is acknowledged.
Caroline Tan Swee Lin
16 February 2007
ii
Acknowledgements
I wish to express my sincere appreciation to all persons who inspired, counselled, and assisted me
during the course of this dissertation. Special thanks to my supervisor, Professor Kosmas
Smyrnios, for his understanding, encouragement, and personal guidance during my candidature.
The completion of this thesis would not have been possible without his direction and mentoring.
His patience is greatly appreciated. Kos has not only been a supervisor, but, also a friend and
inspiration.
My parents and my brother, and for their love, encouragement, inspiration, confidence, and
support.
Don Bradmore, who sparked my interest in Competitive Advantage. Don has also been my
Thursday lunch buddy and good friend over the years.
Fabio Nelson Gutierrez, for his support and encouragement, and in particular for drawing and
ammending causal network models for the present thesis.
My friends, who kept me sane during the PhD process.
Wei Chun Wang, who assisted with the statistical aspects of this study.
The 21 Fast 100 CEOs, whom I interviewed.
Adjunct Professor Amanda Gome and Business Review Weekly, who sponsored the quantitative
data collection for the present thesis.
RMIT International, for their financial scholarship support which made the pursuit of this higher
degree possible.
The Research Development Unit and former School of Marketing, for providing the necessary
administration and financial support, which enabled me to travel to three different continents to
present my research.
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Table of Contents Page
Statement of Authorship…………………………………………………………………….
Acknowledgements………………………………………………………………………….
List of Tables………………………………………………………………………………..
List of Figures……………………………………………………………………………….
List of Appendices…………………………………………………………………………..
Summary…………………………………………………………………………………….
Publications, Conference Presentations, and Awards of the Candidate Originating from
the Present Thesis………………………………………………………………………….
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Chapter 1: Introduction
Purpose………………………………………………………………………………………
Background………………………………………………………………………………….
Rationale…………………………………………………………………………………….
Research objectives………………………………………………………………………….
Thesis structure……………………………………………………………………………...
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Chapter 2: Literature Review
Overview……………………………………………………………………………………..
Fast-growth firms…………………………………………………………………………….
Entrepreneur/founder characteristics………………………………………………………...
Management practices…………………………………………………….……..…………..
Marketing in fast-growth enterprises………………………………………………………...
Resources in fast-growth firms……………………………………………………………....
Competitive advantage: theoretical frameworks...………………………...………………...
Customer value……………………………………………………………………………....
Market, learning and entrepreneurial orientation as sources of competitive advantage……..
Interactions between business orientations…………………….…………………….
Development of a hypothesized model of competitive advantage and firm performance.….
Market orientation…………………………………………………………………………....
Characteristics of market-oriented firms…………………………………………….
Market-driven versus market-driving…………………..............................................
Reactive versus proactive market orientation……………..........................................
Empirical studies of market orientation……………………………………………...
Learning orientation……………………………………………………………………….…
Entrepreneurial orientation……………………………………………………………….….
Firm performance…………………………………………………………………................
Marketing capabilities…………………..................................................................................
Summary……………………………………………..............................................................
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Chapter 3: Study 1
Overview…………………………………………………………………….........................
Introduction………………………………………………………………………………….
Research paradigms...………………………………………………………………………..
Research design…….………………………………………………………………………..
Multiple method designs……………………………………………………………...
Method……………………………………………………………………………………….
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Table of Contents Page
Participants…………………………………………………………………………………...
The Fast 100 questionnaire…………………………………………………………………..
Measures of market orientation……………………………………………………...
Measures of learning orientation…………………………….....................................
Measures of entrepreneurial orientation…………………………..............................
Measures of marketing capabilities………………………………………………….
Measures of performance……………………………………………………………
Social desirability…………………………………………………………………....
Validity and reliability of the Fast 100 questionnaire…………………….............................
Procedure…………………………………………………………………………………….
Statistical procedures………………………………………………………………………...
Ethical considerations………………………………..............................................................
Results………………………………………………………………………………………..
Data screening……………………………………………………………………………….
Psychometric analysis of the instrument……………………………………….……………
Criteria for extracting factors in Exploratory Factor Analysis…..……………………….….
Confirmatory factor analysis………………………….…………………….……………….
Absolute fit indices…………………………..………………………………………
One-factor congeneric measurement models..……………………………………….
Multi-factor analysis………………………..……………..........................................
Convergent and discriminant validity………………………………………………..
Scale reliability…………………………….…….......................................................
Path Analysis: test of hypotheses…………………..………………………………………..
Test for common methods bias: social desirability...………………………………………..
Discussion……………………………………………………………………………………
H1: Market orientation is related positively to marketing capabilities……………………...
H2: Learning orientation is related positively to marketing capabilities……………………
H3: Entrepreneurial orientation is related positively to marketing capabilities……………..
H4: Marketing capabilities are related positively to firm performance……………………..
Relationships among market, learning, and entrepreneurial orientation…………………….
Limitations…………………………………………………………………………………...
Implications for future research……………………………………………………………..
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Chapter 4: Study 2
Overview…………………………………………………………………………………….
Introduction………………………………………………………………………………….
Research Design……………….…………………………………………………………….
Case Study Method………………………………………………………………………….
The role of theory in case studies…………………………………………...……….
Inductive versus deductive reasoning…………………………………………….….
Method………………………………………………………………………………….……
Participants…………………………………………………………………………………..
Instrument…………………………………………………………………............................
Interview protocol………………………………………………………….…...........
Validity and reliability of case study research……………………………….……………
Construct validity……………………………………………………….…………...
Reliability……………………………………………………………….……………
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