The construct of marketing orientation has been extensively researched in marketing and strategy literatures (Kohli and Jaworski 1990). Strategic management (e.g., Dobni and Luffman, 2003; Hult and Ketchen, 2001) and marketing ( Jaworski and Kohli, 1993) researchers posit that market orientation (MO) gives a source of competitive advantage to the firms. It is a well-grounded central concept of marketing discipline (Gebhardt et al. 2006; Kotler 2000). As far as this research is concerned; the concept of market orientation of firms is essentially the extent to which a firm is involved in the generation, dissemination, and response to market intelligence in relation to ongoing and prospective customer needs, competitor strategies and actions, channel management etc. In short it deals with the broad spectrum of broader business landscape (e.g., Kohli and Jaworski, 1990, Hult and Ketchen, 2001; Jaworski and Kohli, 1993). It provides the scope for the drivers of competitive advantage to act. Firms with superior MO achieve superior business performance because they boast a ‘know-what’ advantage by which the decision makers choose the most productive accessible resource combinations to match fluid market conditions (Slater and Narver, 1995).

Many studies have conducted research on relationship between market orientation and performance ( Pelham 2000; Slater and Narver 1994), with general empirical backing that market orientation enhances competitive advantage and hence firm performance. (c.f.,Kirca et al. 2005). For the purpose of this research as per the operationalization of the construct by Jaworski and Kohli, 1993, market orientation (MO) is considered as a reflective construct comprising of market intelligence generation capability, market intelligence dissemination capability, and responsiveness to market intelligence

Based on the above discussion the following hypothesis has been made:

H2: The relationship between market orientation of firms and its competitive advantage is significant

h 2 a: Market Intelligence generation capability positively affects firm competitive advantage