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rketing strategy formulation process in multinational firms can be viewed as comprising a series of decisions pertaining to the business's (1) strategic orientation (standardization vs. adaptation), (2) desired degree of standardization of the strategic resource mix (i.e., pattern of resource allocation among advertising, promotion, personal selling, and other marketing mix variables), and (3) the desired degree of standardization of the strategy content (i.e., decisions on product positioning, brand name, appropriate media, content of advertisements, etc.). Making effective decisions relating to strategic orientation, resource allocation across strategic variables, and strategy content with respect to individual marketing mix elements, in turn, can be viewed as being contingent on managers' understanding (derived from sources internal and external to the business) of relationships among strategic levers (i.e., marketing mix and other competitive strategy variables under the control of the business that impact performance and also are impacted by performance), industry drivers (i.e., industry structure variables that impact performance and in turn can be affected at times by a business's performance), firm drivers (i.e., the characteristics of the firm and business unit, such as firm-specific and business-specific skills and resources that can impact the strategic levers), and business performance. Unfortunately, there is a relative dearth of empirical information from sources external to the business on the determinants of business performance across foreign and domestic markets (exceptions include Ayal and Hirsch 1982; Craig, Douglas, and Reddy 1987; Douglas and Craig 1983; Kotabe 1990; Kotabe and Omura 1989; Kotabe and Murray 1990; Lecraw 1983; Roth, Schweiger, and Morrison 1991; Samiee and Roth 1992; Samli 1977; Takada and Jain 1991). The lack of sufficient information from external sources persists in many respects in spite of the potential value of information on the determinants of business performance across multiple national markets, particularly to managers of multinational firms and managers whose firms are entering international markets for the first time.
In an attempt to compensate for this void in the international marketing literature, we focus on two key questions facing international businesses: "Does an opportunity exist for standardizing the strategic resource mix across national markets?" and "On which strategic variables should businesses place relatively greater emphasis across national markets?" To provide insights into these issues, we examine a number of marketing mix variables for their effects on business profits in Western markets, i.e., the U.S., U.K., Canada, and Western Europe. Specifically, we build on the earlier cross-sectional work by Douglas and Craig (1983) and Craig, Douglas, and Reddy (1987), which examined the impact of marketing mix and marketplace factors on business performance across the U.S. and European markets. We build on these efforts by (1) expanding the set of marketing mix variables to include service quality, product line breadth, vertical integration, advertising expenditures, and shared marketing programs across businesses from the same parent company; (2) controlling for industry drivers and additional competitive strategy variables (i.e., research and development [R&D] expenditures, shared customers. and shared facilities) whose omission from the empirical model might oth