Market Expansion and Product Innovation as Drivers of Sales Performance: A Resource-Based View Perspective

This study examines the strategic mechanism through which market-oriented capabilities translate into sales performance by integrating product innovation and market expansion within a Resource-Based View (RBV) framework. While market orientation has long been considered a key driver of organizational success, empirical findings regarding its performance outcomes remain inconsistent, suggesting the presence of intermediate strategic processes. Addressing this gap, the study proposes and tests a sequential model linking market orientation, product innovation, market expansion, and sales performance. Data was collected from 153 business owners operating in the food and beverage sector through a structured survey conducted between October and December 2025. The data were analyzed using partial least squares structural equation modeling (PLS-SEM). The results indicate that market orientation positively influences both product innovation and market expansion, although the effect on expansion is relatively weak. Product innovation significantly contributes to market expansion and sales performance, highlighting its role as a key capability for value creation. Unexpectedly, market expansion demonstrates a negative yet significant relationship with sales performance, suggesting that growth initiatives may generate operational and competitive pressures that limit performance gains when organizational capabilities are not fully aligned. The findings contribute to RBV literature by demonstrating that performance outcomes emerge from capability transformation and alignment rather than market knowledge alone. Managerially, the study emphasizes the importance of balancing growth strategies with internal capability development to achieve sustainable performance outcomes.