Market orientation and uncertain supply in upstream markets: an exploratory study

Abstract

A key task of the purchasing function is to secure adequate and timely supplies of necessary input factors. In some industries, however, this task is challenging, as it may be difficult to obtain timely and reliable input, e.g. in industries based on natural resources. This may have serious implications for firms’ ability to compete effectively in their output markets. Few empirical studies of purchasing behaviour have focused on how actors cope with uncertain supply. Also, the fast-growing market orientation literature generally seems to have neglected the importance of supply. This paper aims to provide insight into the poorly understood question of how upstream actors cope with uncertain input supply to handle customers’ needs and wants. To investigate our research problem an exploratory study was conducted among 20 upstream actors in the seafood industry. A quasi-experimental approach was applied by selecting firms from two industry branches so that one group was exposed to the “treatment” (i.e. uncertain supply) while the other group was not. Our findings show that when supply is uncertain it is of utmost concern and considered a key determinant in satisfying the firms’ target markets.