Aligning Business Strategy with Consumer Trends in a Rapidly Changing Market

Abstract

The current consumer markets are rapidly changing on multiple dimensions because of altered socio-cultural values, increasing digitalization, growing consciousness of sustainability, and fluctuating economic conditions. The present study explores the possibilities of achieving sustainable competitive advantage through the effective integration of business strategy with emerging consumer trends. In this research, Consumer-Trend Strategic Alignment (CTSA) framework was developed and tested using the mixed-method approach, including the structured survey of 260 managers and brand executives in 52 consumer-oriented organizations, combined with 30 semi-structured interviews. Through Structural Equation Modeling (SEM), the hypothesis that consumer trend sensing positively affects strategic alignment (β = 0.55, t = 5.89, p < 0.001), which, in its turn, positively impacts market performance (β = 0.60, t = 6.74, p < 0.001) was confirmed. Furthermore, the roles of firm size, industry turbulence, and digital maturity as moderators were revealed (β = 0.24, t = 2.61, p = 0.010). The mean scores of constructs' measures ranged between 3.85 and 4.18, which indicated a high level of strategic orientation within the participating organizations. In addition, the results also reveal that firms that have high levels of consumer insights and digital integration are able to respond to changes in consumer expectations and thus become more flexible and adaptive to changes. The paper provides theoretical contributions in terms of strategic alignment by proposing the CTSA model, and also offers some practical implications to managers who want to align their innovation and marketing strategies with consumers.