The contextual drivers of halal orientation strategy and its influence on financial and market performance of halal food firms

Purpose Halal food consumption is obligatory for the Muslim population which is the second largest and one-fourth of the world population and accordingly the need for Halal practices in the food business requires appropriate strategic orientation. Therefore, this study aims to examine how the contextual elements of a business affect its halal orientation strategy (HOS) and then how HOS affects the market and financial performance of halal food companies. Design/methodology/approach This study uses an explanatory research design. A self-administered questionnaire-based survey was used to collect the data. Food technologists and decision-makers provided a total of 155 acceptable data points, which were then used for additional analysis using the partial least squares method. Findings The study’s findings indicate that halal-oriented strategies positively impact the market and financial performance of firms dealing with halal products. In addition, these strategies are significantly influenced by halal market demand, government support and anticipated business opportunities. Practical implications The study may help the government, business owners, policymakers and managers of halal food companies to better understand the business context elements of HOS, which may encourage firms to invest in HOS to improve their own financial and market performance. Originality/value This study is one of a handful that focuses on the elements that facilitate the adoption of a halal approach in manufacturing companies.