The influence of key account management on competitive advantage and firm performance: A dynamic capability approach

Grounded in the dynamic capability view of the firm, the present research examines the mechanism of the influence of key account management orientation on the market and financial performance of B2B supplier firms and proposes a model of key account management orientation–organizational capabilities–competitive advantages–performance relationships. This research offers a nuanced understanding of how strategic orientation in key account management can drive sustainable competitive advantage and operational excellence. Examining the survey data of 568 B2B supplier firms based in Europe and conducting confirmatory factor analysis and covariance-based structural equation modeling through AMOS 23.0, we find that key account management orientation significantly affects relational and key account management capabilities that, in turn, result in differentiation advantage and key account management effectiveness. These competitive advantages subsequently enhance levels of market and financial performance. Moreover, the current research indicates that while formalization and innovativeness attenuate the effects of key account management orientation on relational and key account management capabilities respectively, environmental impact complements these capabilities augmenting key account management effectiveness. Moreover, in the case of managing relationships with key accounts, satisfaction is complementary to the acquired differentiation advantage, increasing levels of financial performance. • Key account management boosts B2B firms' market and financial performance, study of 568 firms shows. • Key account capabilities mediate between management orientation and competitive advantages, improving performance. • Formalization, innovativeness modify key account management's impact on capabilities. • Environmental factors, satisfaction enhance key account management effectiveness, financial performance. • Differentiation advantage, key account effectiveness crucial for enhancing market, financial outcomes.