The Effect of Competitive Strategies on Market Orientation and New Product Development in Commercial Banks of Iran

The establishment of new banks and financial institutions has tremendously increased in recent years. Obviously, those banks and institutions which give serious attention to competitive strategies, market orientation, and new product development will be more successful. Thus, in the current research, given the three principal relationships between a) competitive strategies and new product development, b) competitive strategies and market orientation, and c) market orientation and new product development, the relationships among the competitive strategies, market orientation, and new product development have been examined in the Iranian commercial banks. To this end, the relevant data were collected using a questionnaire through a sample consisting of 257 managers and experts in the headquarters of 15 commercial banks, The data analysis and evaluation of the relationships among different variables were conducted via SPSS 19 and PLS. The results of this research provide general support for the conceptual framework and its hypotheses. Results indicate that the new product development activities of the banks are affected by their competition strategies, either directly or indirectly, through the market orientation variable. Based on the findings of this research, in the Iranian commercial banks, the differentiation strategy has the greatest impact on new product development activities compared to the cost leadership and focus strategies. Furthermore, those banks which have adopted focus strategy have much less new product activities than other banks.