Competitive advantage and firm performance: the moderating effect of industry forces


Ong, Jeen Wei and Ismail, Hishamuddin and Yeap, Peik Foong (2018) Competitive advantage and firm performance: the moderating effect of industry forces. International Journal of Business Performance Management, 19 (4). pp. 385-407. ISSN 1368-4892

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This study aims to examine the moderating effect of industry competitive forces on the relationship between competitive advantage and firm performance. Previous researches have concluded that competitive advantage leads to superior performance but the impact is limited. A possible reason is that the economic value created by firms is appropriated by other stakeholders. This study hypothesises that the five industry competitive forces moderate the relationship. 517 usable responses were collected from small and medium enterprises (SMEs) in Malaysia to test the research framework developed. The results show that buyer bargaining power, supplier bargaining power and threat of new entrants moderate the effect of competitive advantage on firm performance. Surprisingly, SMEs with differentiation advantage and cost advantage are able to appropriate more economic value when the buyers and suppliers have strong bargaining power respectively. On the other hand, the threat of new entrants reduces the economic value that SMEs can capture.

Item Type: Article
Uncontrolled Keywords: competitive advantage, firm performance, small and medium enterprises, SMEs, industry competitive forces, moderating effect
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28-70 Management. Industrial Management
Divisions: Faculty of Business (FOB)
Depositing User: Ms Suzilawati Abu Samah
Date Deposited: 24 Nov 2020 11:09
Last Modified: 24 Nov 2020 11:09


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