Abstract
This study examines how market orientation contributes to sustainable supply chain performance through process improvement and supply chain efficiency, and whether digital readiness strengthens these relationships. Drawing on the Resource-Based View and Dynamic Capabilities Theory, the study conceptualizes sustainability as a dynamic capability that connects operational efficiency with long-term strategic performance. A cross-sectional survey was conducted among manufacturing firms operating in an emerging economy, and the proposed relationships were tested using structural equation modeling. The findings indicate that market orientation enhances strategic performance primarily through a sequential capability chain involving process improvement and supply chain efficiency. Sustainability plays a mediating role by transforming efficiency gains into enduring competitive outcomes. In addition, digital readiness strengthens the impact of process improvement on supply chain efficiency, highlighting the importance of technological preparedness in capability transformation. This research contributes to supply chain management literature by integrating digital readiness and sustainability within a unified capability-based framework and offers practical insights for managers seeking to align digital transformation initiatives with sustainable performance objectives.