The Mediation Effects of Business Strategy on the Relations between Industrial Competition and Performance
Keywords:
Industrial competition, differentiation strategy, cost leadership strategy, combined strategy, industrial performance, industry, higher education
Abstract
This study aims to examine the mediation effects of differentiation strategy and cost leadership strategy on the relationship between industrial competition and the performance of the higher education industry in Timor-Leste. The total of 157 departments of 11 accredited tertiary institutions in Timor-Leste were chosen to fill in the questionnaires, while SMART-PLS 3.0 was used to test the hypothesis. The results of this study show that industrial competition does not significantly influence industrial performance, while both the differentiation and the cost leadership strategies fully mediate the relationship between industrial competition and the performance. This research contributes to the debate on competitive strategic fitness to sustain competitive advantage in regard to pure strategy or combined strategy which is still unsettled among researchers. This research also contributes to developing strategic policies in the higher education industry for improving competitive advantages which lead to superior performance. The higher education industry can also benefit from this research by considering a combined differentiation and cost leadership strategy as a competitive strategy to improve industrial performance.
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References
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Salavou, H. E. (2013) ‘Hybrid strategies in Greece: a pleasant surprise’, European Business Review, 25 (3), pp.301–314.
Salavou, H. E. (2015) ‘Competitive strategies and their shift to the future’, European Business Review, 27 (1), pp.80–99.
Saldanha, E. de S., Rahyuda, I. K., Yasa, N. N. K., and Sukaatmadja, I.P.G. (2018) ‘The Role of Business Strategy in Mediating the Relationship Between Industrial Competition and Performances : A Study in the Higher Education Industry in Timor-Leste’, European Jorunal of Business and Management, 10 (8), pp.152–172.
Saldanha, E. de S., Rahyuda, I. K., Yasa, N. N. K., and Sukaatmadja, I.P.G. (2019) ‘Industrial Competition, Hybrid Strategy and Industrial Performance: Study in Higher Education Industry in Timor-Leste’, Journal of Engineering and Applied Sciences, 14 (8), pp.2456–2464.
Saldanha, E. de S., Rahyuda, I. K., Yasa, N. N. K., and Sukaatmadja, I.P.G. (2019). Persaingan Industri, Strategi Bisnis, dan Kinerja Industri: Studi Pada Industri Jasa Pendidikan Tinggi', Denpasar: Udayana University Press.
Savino, M. M. and Shafiq, M. (2018) ‘An extensive study to assess the sustainability drivers of production
performances using a resource-based view and contingency analysis’, Journal of Cleaner Production, 204, pp.744–752.
Silva, R., Gerwe, O. and Becerra, M. (2017) ‘Corporate brand and hotel performance: A resource-based perspective’, Journal of Business Research, 79 (May), pp.23–30.
Sivo, S. A., Saunders, C. and Jiang, J. J. (2004) ‘How Low Should You Go ? Low Response Rates and the Validity of Inference in IS Questionnaire Research 1’, Journal of The Association for Information Systems, 7 (6), pp.351–414.
Soltanizadeh, S., Rasid, S.Z.A., Golshan, N.M., Ismail, W.K.W. (2016) ‘Business strategy, enterprise risk management and organizational performance’, Management Research Review, 39 (1016–1033).
Sun, K. A. and Lee, S. (2019) ‘Competitive advantages of franchising industrial organizations and the moderating role of organizational characteristics: Evidence from the restaurant industry’, International Journal of Hospitality Management, 77 (October 2017), pp.281–289.
Tavalaei, M. M. and Santalo, J. (2019) ‘Pure versus hybrid competitive strategies in the airport industry’, Transportation Research Part A: Policy and Practice, 124 (April), pp.444–455.
Valaei, N. (2017) ‘Organizational structure, sense making activities, and SMEs’ competitiveness: An application of conindustrial organizationatory tetrad analysis-partial least squares (CTA-PLS)’, VINE Journal of Information and Knowledge Management Systems, 47 (1), p.
Xie, H. Y., Xie, Q. (Jane) and Zhao, H. (2018) ‘Foreign industrial organizations’ strategic positioning and performance in a host market A resource partitioning perspective’, Multinational Business Review, 26 (2), pp.173–192.
Yuliansyah, Y., Rammal, H. G. and Rose, E. (2016) ‘Business strategy and performance in Indonesia’s service sector’, Journal of Asia Business Studies, 10 (2), pp.164–182.
Akan, O. et al. (2006) ‘Critical tactics for implementing Porter’s generic strategies’, Journal of Business Strategy, 27 (1), pp.43–53.
Al-Rahmi, W. M. Alias, N., Othman, M.S., Marin, V.I. and Tur, G. (2018) ‘A model of factors affecting learning performance through the use of social media in Malaysian higher education’, Computers and Education, 121 (April 2017), pp.59–72.
Al-Surmi, A., Cao, G. and Duan, Y. (2019) ‘The impact of aligning business, IT, and marketing strategies on industrial organization performance’, Industrial Marketing Management, xxx(xxx) xxx-xxx.
Asif, M. and Searcy, C. (2014) ‘A composite index for measuring performance in higher education institutions’, The International Journal of Quality & Reliability Management, 31 (9), p.983.
Assaf, A. and Cvelbar, K. L. (2011) ‘Privatization, market competition, international attractiveness, management tenure and hotel performance: Evidence from Slovenia’, International Journal of Hospitality Management, 30 (2), pp.391–397.
Baack, D. W. and Boggs, D. J. (2008) ‘The difficulties in using a cost leadership strategy in emerging markets’, International Journal of Emerging Markets, 3 (2), pp.125–139.
Banker, R. D., Mashruwala, R. and Tripathy, A. (2014) ‘Does a differentiation strategy lead to more sustainable financial performance than a cost leadership strategy?’, Management Decision, 52 (5), p.872.
Barney, J. (1991) ‘Industrial organization Resources and Sustained Competitive Advantage’, Journal of Management, pp.99–120.
Bayar, T., Millon, M., Erhemjamts, O., Leverty, T. and Tehranian, H. (2018) ‘An examination of the relation between strategic interaction among industry industrial organizations and industrial organization performance R’, Journal of Banking and Finance. Elsevier B. V., 87, pp.248–263.
Bhatt, G., Emdad, A., Roberts, N. and Grover, V. (2010) ‘Building and leveraging information in dynamic environments: The role of IT infrastructure flexibility as enabler of organizational responsiveness and competitive advantage’, Information and Management. Elsevier B. V., 47 (7–8), pp.341–349.
Bobe, B. J. and Kober, R. (2015) ‘Measuring organizational capabilities in the higher education sector’, Education + Training, 57 (3), pp.322–342.
Busby, J. S. (2019) ‘The co-evolution of competition and parasitism in the resource-based view: A risk model of product counterfeiting’, European Journal of Operational Research, 276 (1), pp.300–313.
Chen, J., Yang, B. and Yang, L. (2019) ‘To BE or not to BE, that is the question’, Nature Biotechnology, 37 (5), pp.520–522.
Claver-Cortés, E., Pertusa-Ortega, E. M. and Molina-Azorín, J. F. (2012) ‘Characteristics of organizational structure relating to hybrid competitive strategy: Implications for performance’, Journal of Business Research. Elsevier Inc., 65 (7), pp.993–1002.
Fincham, J. E. (2008) ‘Response rates and responsiveness for surveys, standards, and the Journal. ’, American journal of pharmaceutical education, 72 (2), p.43.
Fleaca, E., Stanciu, R. D. and Zanin, A. (2019) ‘Digital-age Learning and Business Engineering Education – a Pilot Digital-age Learning and Business Engineering Study on Students ’ E-skills Education – a Pilot Study on Students ’ Costing models for’, Procedia Manufacturing, 32, pp.1051–1057.
Fogliani, M. (1999) ‘Low response rates and their effects on survey results’, Methodology Advisory Committee paper, (November), p.13.
Gabrielsson, M., Seppäläb, T. and Gabrielsson, P. (2016) ‘Realizing a hybrid competitive strategy and achieving superior financial performance while internationalizing in the high-technology market’, Industrial Marketing Management. Elsevier Inc., 54, pp.141–153. doi: 1.
Garwe, E. C. (2016) ‘Increase in the demand for private higher education: unmasking the “paradox”’, International Journal of Educational Management, 30 (2).
González-Rodríguez, M.R., Jiménez-Caballero, J.L., Martín-Samper, R. C., Köseoglu, M. A. and Okumus, F. (2018) ‘Revisiting the link between business strategy and performance: Evidence from hotels’, International Journal of Hospitality Management. Elsevier, 72 (November 2017), pp.21–31.
de Haan, H. H. (2015) ‘Competitive advantage, what it really mean in the context of public higher education institutions?’, Internaltional Journal of Education Management, 29 (1), pp.44–61.
Hair, J., Hollingsworth, C.L., Randolph, A.B., and Chong, A.Y.L. (2017) ‘An updated and expanded assessment of PLS-SEM in information systems research’, Industrial Management & Data Systems, 117 (3), pp.442–458.
Hair, J.F., Sarstedt, M., Hopkins, L., and Kuppelwieser, V.G. (2014) ‘Partial least squares structural equation modeling (PLS-SEM)’, European Business Review, 26 (2), pp.106–121.
Hair, J.F., Hult, G.T.M, Ringle, C.M., Sarstedt, M. (2014) Partial Least Squares Structural Equation Modeling (Pls-Sem). London: SAGE Publication LTD.
Hansen, E., Nybakk, E. and Panwar, R. (2015) ‘Pure versus hybrid competitive strategies in the forest sector: Performance implications’, Forest Policy and Economics. Elsevier B. V., 54 (1), pp.51–57.
Henseler, J., Ringle, C. M. and Sarstedt, M. (2015) ‘A new criterion for assessing discriminant validity in variance-based structural equation modeling’, Journal of the Academy of Marketing Science, 43 (1), pp.115–135.
Hopkins, L. (2015) ‘Partial least squares structural equation modeling ( PLS-SEM ) An emerging tool in business research’, European Business Review, 26 (2), pp.106–121.
Huang, H. -I. and Lee, C. -F. (2012) ‘Strategic management for competitive advantage: a case study of higher technical and vocational education in Taiwan’, Journal of Higher Education Policy and Management, 34 (6), pp.611–628.
Hunt, S. D. and Madhavaram, S. (2019) ‘Adaptive marketing capabilities, dynamic capabilities, and renewal competences: The “outside vs. inside” and “static vs. dynamic” controversies in strategy’, Industrial Marketing Management, (July).
Hussein, N. Omar, S., Noordin, F. and Ishak, N.A. (2016) ‘Learning Organization Culture, Organizational Performance and Organizational Innovativeness in a Public Institution of Higher Education in Malaysia: A Preliminary Study’, Procedia Economics and Finance. Elsevier B. V., 37 (16), pp.512–519.
Omar, S., Noordin, F. and Ishak, N.A.
Jin, D. Liu, J., Liu, L., and Yin, D. (2014) ‘Competition and profit hiding: evidence from banks in China’, Managerial Finance, 40, pp.1040–1051.
Kaliappen, N. and Hilman, H. (2017) ‘Competitive strategies, market orientation types and innovation strategies: finding the strategic fit’, World Journal of Entrepreneurship , Management and Sustainable Development, 13 (3), pp.257–261.
Kaya, N. (2015) ‘Corporate Entrepreneurship, Generic Competitive Strategies, and Industrial organization Performance in Small and Medium-sized Enterprises’, Procedia - Social and Behavioral Sciences. Elsevier B. V., 207, pp.662–668.
Kim, N., Shin, S. and Min, S. (2016) ‘Strategic marketing capability: Mobilizing technological resources for new product advantage’, Journal of Business Research. Elsevier Inc., 69 (12), pp.5644–5652.
Lee, C. -L. and Yang, H. -J. (2011) ‘Organization structure, competition and performance measurement systems and their joint effects on performance’, Management Accounting Research. Elsevier Ltd, 22 (2), pp.84–104.
Liu, W. and Atuahene-Gima, K. (2018) ‘Enhancing product innovation performance in a dysfunctional competitive environment: The roles of competitive strategies and market-based assets’, Industrial Marketing Management, 73 (February), pp.7–20. doi: 10.1016/j. indmarman.2018.01.006.
Lorenzo, J. R. F., Rubio, M. T. M. and Garcés, S. A. (2018) ‘The competitive advantage in business, capabilities and strategy. What general performance factors are found in the Spanish wine industry?’, Wine Economics and Policy, 7 (2), pp.94–108.
Metts, G. A. (2007) ‘Measuring the effectiveness of managerial action in SMEs’, Management Research News, 30 (12), pp.892–914.
Mikalef, P., Krogstie, J., Pappas, I. O., Pavlou, P. (2019) ‘Exploring the relationship between big data analytics capability and competitive performance: The mediating roles of dynamic and operational capabilities’, Information and Management, (February 2018).
Miles, P. C. (2013) ‘Competitive strategy: the link between service characteristics and customer satisfaction’, International Journal of Quality and Service Sciences, 5 (4), pp.395–414.
Obembe, O. B. and Soetan, R. O. (2015) ‘Competition, corporate governance and corporate performance’, African Journal of Economic and Management Studies, 6 (3), pp.251–271.
Porter, M. E. (1980) Competitive strategy: Techniques for analyzing industries and companies, New York. New York: The Free Press.
Porter, M. E. (1985) Competitive Advantage - Creating and Sustaining Superior Performance, New York: FreePress. New York: The Free Press.
Roemer, E. (2016) ‘A tutorial on the use of PLS path modeling in longitudinal studies’, Industrial Management & Data Systems, 116 (9), pp.1901–1921.
Salavou, H. E. (2013) ‘Hybrid strategies in Greece: a pleasant surprise’, European Business Review, 25 (3), pp.301–314.
Salavou, H. E. (2015) ‘Competitive strategies and their shift to the future’, European Business Review, 27 (1), pp.80–99.
Saldanha, E. de S., Rahyuda, I. K., Yasa, N. N. K., and Sukaatmadja, I.P.G. (2018) ‘The Role of Business Strategy in Mediating the Relationship Between Industrial Competition and Performances : A Study in the Higher Education Industry in Timor-Leste’, European Jorunal of Business and Management, 10 (8), pp.152–172.
Saldanha, E. de S., Rahyuda, I. K., Yasa, N. N. K., and Sukaatmadja, I.P.G. (2019) ‘Industrial Competition, Hybrid Strategy and Industrial Performance: Study in Higher Education Industry in Timor-Leste’, Journal of Engineering and Applied Sciences, 14 (8), pp.2456–2464.
Saldanha, E. de S., Rahyuda, I. K., Yasa, N. N. K., and Sukaatmadja, I.P.G. (2019). Persaingan Industri, Strategi Bisnis, dan Kinerja Industri: Studi Pada Industri Jasa Pendidikan Tinggi', Denpasar: Udayana University Press.
Savino, M. M. and Shafiq, M. (2018) ‘An extensive study to assess the sustainability drivers of production
performances using a resource-based view and contingency analysis’, Journal of Cleaner Production, 204, pp.744–752.
Silva, R., Gerwe, O. and Becerra, M. (2017) ‘Corporate brand and hotel performance: A resource-based perspective’, Journal of Business Research, 79 (May), pp.23–30.
Sivo, S. A., Saunders, C. and Jiang, J. J. (2004) ‘How Low Should You Go ? Low Response Rates and the Validity of Inference in IS Questionnaire Research 1’, Journal of The Association for Information Systems, 7 (6), pp.351–414.
Soltanizadeh, S., Rasid, S.Z.A., Golshan, N.M., Ismail, W.K.W. (2016) ‘Business strategy, enterprise risk management and organizational performance’, Management Research Review, 39 (1016–1033).
Sun, K. A. and Lee, S. (2019) ‘Competitive advantages of franchising industrial organizations and the moderating role of organizational characteristics: Evidence from the restaurant industry’, International Journal of Hospitality Management, 77 (October 2017), pp.281–289.
Tavalaei, M. M. and Santalo, J. (2019) ‘Pure versus hybrid competitive strategies in the airport industry’, Transportation Research Part A: Policy and Practice, 124 (April), pp.444–455.
Valaei, N. (2017) ‘Organizational structure, sense making activities, and SMEs’ competitiveness: An application of conindustrial organizationatory tetrad analysis-partial least squares (CTA-PLS)’, VINE Journal of Information and Knowledge Management Systems, 47 (1), p.
Xie, H. Y., Xie, Q. (Jane) and Zhao, H. (2018) ‘Foreign industrial organizations’ strategic positioning and performance in a host market A resource partitioning perspective’, Multinational Business Review, 26 (2), pp.173–192.
Yuliansyah, Y., Rammal, H. G. and Rose, E. (2016) ‘Business strategy and performance in Indonesia’s service sector’, Journal of Asia Business Studies, 10 (2), pp.164–182.
Published
2019-12-19
How to Cite
Saldanha, E. (2019) “The Mediation Effects of Business Strategy on the Relations between Industrial Competition and Performance”, Timor Leste Journal of Business and Management, 1(1), pp. 1-11. doi: 10.51703/bm.v1i1.6.
Section
Articles
Copyright (c) 2019 Timor Leste Journal of Business and Management
This work is licensed under a Creative Commons Attribution 4.0 International License.
