Market Orientation and Competitive Advantage in Vietnamese Food Processing Enterprises: Exploring the Moderating Effect of Digital Orientation

[Purpose] Innovation is crucial in enabling organizations across various industries, particularly food processing, to gain a competitive advantage. This research examines how market orientation and digital transformation orientation influence innovation and competitive advantage in the Vietnamese food processing industries. [Design/methodology/approach] Data collected from 122 managers in food processing firms were subjected to partial least squares structural equation modeling (PLS-SEM) analysis to assess the validity of proposed relationships within the research model. [Findings] This study emphasizes the importance of innovation that incorporates market orientation, including customer, supply chain, and competitor orientation, as well as digital orientation, in enhancing the overall competitive advantage of food processing businesses. Customer orientation exerts the strongest influence on firms' innovation capabilities, followed by supply chain orientation and competitor orientation. This integrated market orientation improves firms' innovation capability, which in turn enhances their competitive performance. The research also highlights the direct contribution of digital orientation to a business's competitive advantage. Moreover, it confirms the role of digital orientation as a moderator in the relationship between innovation capability and competitive advantage. [Research implications] Through empirical validation, this study provides actionable insights for practitioners, especially food processing company managers in developing economies, and offers a comprehensive roadmap for building innovation capability and implementing digital transformational strategies in the food processing industry. [Originality/value] This research is the first to integrate customer, supply chain, and competitor orientations while investigating both the direct impact of digital orientation on competitive advantage and its moderating role in the relationship between innovation capability and competitive advantage. On the one hand, the findings shed light on the combined effect of market orientations on firms' innovation capability and competitive advantage. On the other hand, they add to the understanding of the mechanisms through which digital orientation influences competitive advantage in the food processing industry, which has received scant scholarly interest. The study aligns with the field of decision sciences by developing a framework that explains how strategic orientations, particularly market and digital orientations, enhance innovation capability and competitive advantage in the food processing industry. It also offers empirically grounded insights to support managerial resource allocation and decision-making in an evolving economic landscape.