Index of Paper Presentations for the Parallel Sessions - Academy of ...

The exchanges between international and local small firms provide new avenues of growth (Weitz and Jap, 1995;Park et al., 2004). Local firms are a source of wealth for stakeholders (Certo et al., 2001), a source of employmentfor local regulating bodies (Amin, 1999) and source of local resource for international organizations (Kumar andLiu, 2005). The contributions made by both the partners in business relationships allow innovativeness in marketing(Dacin et al., 1997; Stuart 2000; Lee et al., 2001). Relationship between competitive advantage and resource basedview of the firm has been explicitly and implicitly proposed (Srivastava et al., 2001) but the perspective of abusiness relationship has been overlooked.Innovation in marketingBusiness relationships are useful for addressing demanding stakeholders in increasingly competitive markets (Weitzand Jap, 1995). Local firms can be innovative in their approach to competitively deliver value to customers becauseof their knowledge of local culture (Frey, 1969). Forming alliances with international firms enable local firms tooffer quality products or services with strong marketing and after sales support that becomes a competitiveadvantage for them amongst the local competitors (Hitt et al., 2002). Complexities and uncertainties of operating innew markets can negatively influence the performance of an international firm (Hitt et al., 1997).Marketing strategies of an international firm should be developed based on the understanding of the insights aboutthe factors that make its customers dissatisfied (Ram and Sheth, 1989). Small local firms play a critical role inenabling international firms to understand its customers (Fillis, 2004). The small local firms act as a source ofinnovation for marketing initiatives of international firms by giving them deep insights into the local marketconditions and specific cultural requirements of the market (Cox, 2007).Role of NetworksRole of quasi firms as a source of efficiency management based on exchanges between firms has been explained inliterature based on the general theory of networks (Larson, 1992). Dyer and Singh (1998) identified four areas ofinter-organizational competitive advantage, namely relation specific assets, knowledge sharing routines,complementary resources and capabilities and effective control. Yli-Renko et al. (2002) proposed a structurallytested model that reflected on the usefulness of inter and intra organizational relationship as internal and externalsocial capital in acquiring and creation of knowledge as a key resource for competitiveness. Hite and Hesterly(2001), ―The evolution of firm networks: from emergence to early growth of the firm‖, Strategic ManagementJournal3.0 Competitiveness by innovativenessMarketing innovativeness of a firm and its differentiation strategy to address requirements of its customers isreflected in its openness to new approaches (Akan et al., 2006; Calantone et al., 2006). Innovativeness in marketingis understood as application of new ideas, concepts and theories (Kohli, 2009). Innovation in marketing is deeplyassociated with use of market information and a critical understanding of the likes and dislikes of customers(Nambisan, 2002). It involves formulating strategies to address the needs of the customers delivered with extra valueadded in a way that leaves the customer in a satisfied state of mind (Olson et al., 2005). This conceptualizationprovides a valuable integration of international business and strategic marketing theories based on the resourcebasedview of business relationships. The shared resources may act as a moderating variable for the innovativenessin marketing and competitiveness of the firms in association. The constructs identified are used to develop a modelthat will be relevant to two types of firms acting as unit of analysis for this study. The model depicts the role ofinternational firm in providing competitive products, services and marketing support to those small local firms whocan provide local relationships, resources and sales opportunities to international firms but lack the financial strengthto manufacture and market products (Figure 1). This study aims to operationalise the constructs identified andevaluate the relevancy of the theory by establishing a structural model. The model reflects on the mutualcontributions of both local and international firms, in the form of factors that influences their individualcompetitiveness.