Recent study has shown evidence of a positive relationship between market orientation and performance. However, some schorals have suggested that competitive environment could moderate this relationship. The authors investigate how competitive environment affects the strength of a market orientation-performance relationship and whether it affects the focused of the external emphasis within the market orientation-that is, a greater emphasis on customer analysis relative to competitor analysis, or vice versa, within a given magnitude of market orientation-performance relationship. The benefit of a market orientation are long term thougt environmental conditions are often transient, and thus being market oriented is cost-effective in spite of any possible short-term moderating effects of the environment.