Delving into the interplay among market-driving strategy, dynamic capabilities, transformational leadership and firm performance

Purpose The purpose of this study is to explore the interplay among market-driving strategy (MDS), dynamic capabilities (DCs), transformational leadership (TL) and their impact on firm performance. Design/methodology/approach This study adopts a robust quantitative methodology (online survey with 300 firms) from the technological sector in Greece. Findings Strong positive influences of MDS on DCs, TL and firm performance are revealed. Furthermore, DCs and TL mediate the MDS–firm performance relationship. Research limitations/implications This research focused on the technological sector, used a cross-sectional design and relied on self-reported measures. An array of implications is presented for marketing strategy’s theory and practice. Practical implications Intriguing advice on marketers is provided, regarding the complex mechanisms with which MDS can trigger firm performance, through the orchestration of the elements of MDS, DCs and TL. Social implications Light is shed on aspects such as changing markets and influencing the preferences and behavior of market players (i.e. customers, competitors, channels of distribution and wider society). Originality/value This study brings to the fore the roles of TL and DCs as enablers and catalysts for the transmutation of MDS endeavors into performance outcomes. Thus, it both connects leadership, strategy and innovation literature and provides actionable guidance on how to execute MDS and successfully innovate in markets. It also reflects that the MDS–firm performance relationship encompasses complex mediating factors, and sizable indirect relationships that, combined with the direct effect, benefit the given market-driving firm.