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John C. Narver & Stanley F. Slater

In: Developing a Market Orientation

Chapter 3: The Effect of Market Orientation on Business Profitability

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The Effect of Market Orientation on Business Profitability
The effect of market orientation on business profitability
John C.NarverStanley F.Slater

It is a well-accepted maxim in the strategy literature that superior performance is the result of building a sustainable competitive advantage. Competitive advantage exists when a business creates value for its buyers in excess of the value of any competitor's offering (value being the difference between the perceived worth of the benefits of an offering and the perceived costs of acquiring and using the offering). There are two routes to competitive advantage, which may be pursued separately or in combination: differentiation, which focuses on buyer benefits, and lowest delivered cost, which focuses on buyer acquisition and use costs.

Competitive advantage requires that a business have an understanding of buyers' ...

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