Literature Review for My Ph.D.

1. Khorntawatt
Sakhonkaruhatdej
Ph.D.
Business
Administration
My
Dissertation
Topic
:
The
Strategy
for
Competitive
Advantage
Creation
of
Thai’s
Independent
Hotel
Business.

2. Table
1
Definition
and
Examples
Variable
Definition
Examples
D. V. 1
Firm’s
Performance
-­‐
Al-­‐
Manasra
et
al
(2013)
Considered
the
earliest
researchers
who
identified
entrepreneurship
as
a
strategy
to
create
competitive
advantage.
Entrepreneurial
activity
will
result
in
positive
macroeconomic
outcomes
and
can
lead
to
improved
performance in established organizations.
-­‐
Firm’s performance could be defined in terms of a wide variety of organizational effectiveness criteria. A firm's
economic performance is generally acknowledged to have two primary dimensions; growth and profitability. Al-­‐
Manasra
et
al
(2013) Mentioned several possible non-financial outcomes: increasing employee motivation and task
involvement; keeping the firm's best and most talented people who might have left for lack of opportunities; and
creating a positive culture that encourages the integration of employee and organizational needs.
PTT Public
Company
Limited,
TMB Bank
Public
Company
Limited.
D. V. 2
(Mediator)
Competitive
Advantage
- Is conceptualized as the implementation of a strategy that is currently not used by competing firms,
which helps reduce costs, exploit market opportunities, and neutralize competitive threats (Leonidou
and et al., 2013).
- Advantage over competitors gained by offering consumers greater value, either by means of lower
prices or by providing greater benefits and service that justifies higher prices. It is concerned with the
interplay between the types of competitive advantage, i.e., cost and differentiation, and the scope of
the firm’s activities (Broadly or narrow). Superior performance outcomes and superiority in production
resources reflect competitive advantage (Singh, 2012).
- Competitive advantage is the antecedent of increasing firm performance Low cost competition and
TMB Bank
Public
Company
Limited.

3. product differentiation become valuable strategies for helping firms compete in the market
(Ussahawanitchkit, 2012).
I.V. 1
Competitive
Environment
- Hotel’s competitive environment affects the strategic planning performance relationship. External
environment/ competitive environment can be described in terms of uncertainty, three environmental
characteristics are included market turbulence that is the (1) rate of change of customers and their
tastes. The more rapid the change, the greater the need for managers to change their product/service
offerings accordingly. (2) Competitive intensity is the second environmental characteristic.
Organizations operating as a monopoly, with no substitutes, have a strong hold over customers, as
customers are simply stuck with the organization’s offerings. The third environmental characteristic, is
(3) technological turbulence. Organizations that are at the forefront of technology may be able to keep
ahead, by innovation, thereby abating, but not discharging, the importance f being customer orientated
(Pillips,1999).
- Competitive environment is defined as situations, circumstances and views of general (hotel)
business operations in markets, including environmental heterogeneity, dynamism and uncertainty. It
includes the perceived complexity of a firm’s environment; the perceived rates of change in the
industry; and the perceived non – stability of its environment (Ussahawanitchkit, 2012).
- Intensity of rivalry among competitors in one branch of industry, entry barriers, bargaining power of
buyers, bargaining power of suppliers, threat of substitute products and services (Dobrivojevic ,2013)

4. I.V. 2
Internal
Resource
- Leonidou et al. (2013) Resource-based view (RBV), which emphasizes the firm’s resources as key
drivers of competitive and business performance. According to RBV theory, the firm’s control of
valuable, rare, imperfectly imitable, and non-substitutable resources helps it design and implement
strategies that will eventually create sustainable competitive advantages and achieve superior
performance. The firm gains a competitive advantage by building strategies that exploit its own
strengths and avoid its internal weaknesses, while responding to environmental opportunities and
neutralizing external threats.
- The founding base of RBV is given by Penrose (1959) describes a firm as a collection of resources
and goes on arguing that it is the heterogeneity (differences) of the services available from resources
that gives each firm its unique character. Penrose adopts a broad definition of resources to include
managerial skills as well as entrepreneurial skills. Later on, Wernerfelt (1984) defines firm’s resources
as tangible and intangible assets which are tied semi-permanently to the firm and posits that it is
possible to develop a theory of competitive advantage based on the resources that a firm controls in
accordance with the dualistic reasoning of economics (Brahma and Chakraborty, 2011).
- The firm’s resource can be in the form of organizational innovation; Ussahawnichakit (2012) classified
the organizational innovation as administrative innovation and technical innovation.
Administrative innovation is refers to a new management system administrative process, and staff
development program. It occurs in an administrative component and affects a social system of an
organization via organizational members and their relationships, including rules, roles, procedures, and
structures related to the communication and exchange between organizational members. Technical

5. innovation, defined as an adoption of new ideas pertaining to new products or services, and an
introduction of new elements in an organization’s production process or service operations. It occurs in
the operating component and affects the technical system of an organization through the equipment
and methods of operations used to transform raw materials or information into products or services. It
changes and applies new procedures and processes that initiate new products or services within the
organization in the volatile markets and environments that influence the speed and flexibility of
production and the quality of production.
- Different business strategies require different IT strategies. Prospectors desire for flexibility and
innovation in their IT strategy, defenders emphasize on cost containment and stability, and anlyzers
endeavor to simultaneously achieve both (Li and Tan, 2013).
- Leonidou, et al (2013) described internal resource as organizational resource and classified it into
three constructs 1. Physical resources, 2. Financial resources, and 3. Experiential resources.

6. Table
2
Measurement
and
Results
Variable
Measurement (Methodology)
Results
D.V. 1
Firm’s
Performance
- Variables were obtained from the survey.
- Four- item scale was developed to evaluate firms that achieve
the level and degree of performance, including efficiency,
effectiveness, management satisfaction, and customer response
and satisfaction (Ussahawanitchakit, 2012).
- Business performance were measures by 1) employee
productivity, 2) operation efficiency, 3) operation cost, 4)
customer satisfaction, 5) relationship with partners, 6) revenue
earnings, 7) profit, and 8) market share. This study measures all
these items with seven-point Likert scales that compare the
company to its key competitor, ranging form 1 (much worse than
the competitors) to 7 (much better than the competitors). The
authors place a survey package consisting of a cover letter
stating the study objective, the survey instruction, and the survey
questionnaire on a web server (Li and Tan, 2013).
-­‐
Financial Performance can be measurement by 1. Sales growth, 2.
Growth in profit after tax, 3. Return on assets, 4. Return on equity, 5.
- Beta between Competitive advantage
and Firm’s Performance = 0.48*** or
48 % (Ussahawanitchakit, 2012)
Non- financial performance (alpha=.889)
Scale Factor
loads
Mean SD
2)Customer
satisfaction .783 3.67 1.197
Customer
loyalty .787 3.64 1.157
Employee
satisfaction .781 3.36 1.121
Employee
turnover .628 3.23 1.175
1)Company
image .771 3.72 1.216

7. Return on sales, 6. Overall firm performance and success (Koseoglu et
al, 2013).
- Non-financial performance can be measurement by 1. Customer
satisfaction 2. Customer loyalty 3. Employee satisfaction 4. Employee
turnover and 5. Company image (Koseoglu et al, 2013).
Financial Performance (alpha= .779)
(Koseoglu et al, 2013).
Scale Factor
Loads
Mean SD
Sale Growth .670 3.56 1.098
Growth in profit
after tax
.583 3.45 1.055
ROA .663 3.46 .912
ROE .586 3.43 .920
ROS .690 3.57 1.062
3)Coverall firm
performance
and success
.670 3.66 1.030

8. D.V. 2 (Mediator)
Business
Competitive
Advantage
- Four items were utilized to assess cost effectiveness, product
quality, delivery dependability, new product development, and
time to the market (Ussahawanitchakit, 2012).
-­‐
Competitive advantage : cost leadership and differentiation (Koseoglu
et al, 2013).
Cost leadership: 1. Efficiency of securing raw materials or components.
2. Finding ways to reduce costs 3. Level of operating efficiency 4. Level
of production capacity utilization.
Differentiation: 1. Using new methods and technologies to create
superior products 2. New product development 3. Rate of new product
introduction to market 4. Number of new products offered to the market
5. Intensity of advertising and marketing 6. Developing and utilizing sales
force 7. Building strong brand identification.
Scale Rank: **Mean (SD)
- Cost leadership: 1 Level of operating
efficiency; Mean (SD) = 3.84 (1.131),
2. Finding ways to reduce costs; Mean
(SD) = 3.73 (1.134), 3. Efficiency of
securing raw materials or components;
Mean (SD) = 3.73 (1.075).
- Differentiation: 1.Building strong brand
identification; 3.81 (1.227), 2. New
product development; 3.68 (1.094),
3.developing and utilizing sales force;
3.60 (1.169) (Koseoglu et al, 2013).

9. I.V. 1
Competitive
Environment
- Variable were obtained from secondary data.
- The five forces model, which was developed by Michael Porter,
is the most commonly used instrument for analysis and a very
useful tool when examining the competitiveness of environment.
Through Porter’s five forces, competitive environment is
described by the intensity of rivalry among competitors in one
branch of industry, entry barriers, bargaining power of buyers,
bargaining power of supplier, threat of substitute products and
services (Dobrivojevic, 2013).
Koseoglu et al, (2013) classified environment into three types; Market
uncertainty (MU1.In our kind of business, customer’s product
preferences change quite a bit over time, MU2. Our customers tend to
look for new products all the time. MU3. Sometime our customers are
very price-sensitive, but on other occasions, price is relatively
unimportant. MU4. New customers tend to have product-related needs
that are different from those of our existing customers. MU5. We cater to
many of the same customers that we used to in the past, MU6. It is very
difficult to predict any changes in this marketplace.
Technology uncertainty (TU1. The technology in our industry is changing
Scale Rank: **Mean (SD)
Market uncertainty; (1) MU5. 3.75 (1.234),
(2) MU1. 3.65 (1.226), and (3) MU4. 3.57
(1.160).
Technology uncertainty; (1) TU2. 3.51
(1.174), (2) TU4. 3.43 (1.207), and (3)
TU3. 3.28 (1.235)
Competitive uncertainty; (1) CU2. 3.67
(1.259), (2) CU4. 3.64 (1.185), and (3)
CU3. 73.62 (1.219)

10. rapidly, TU2. Technological changes provide big opportunities in our
industry, TU3. It is very difficult to forecast where the technology in our
industry will be in the next two to three years, TU4. A large number of
new product ideas have been made possible through technological
breakthroughs in our industry. TU5. Technological developments in our
industry are frequent.
Competitive uncertainty (CU1. Competition in our industry is cutthroat,
CU2. There are many ‘promotion wars’ in our industry, CU3. Anything
that one competitor can offer, others can match readily, CU4. Price
competition is a hallmark of our industry, CU5. One hears of a new
competitive move almost every day, CU6. Our competitors are relatively
weak.
I.V. 2
Internal Resource
(Organizational
Innovation)
- Variable were obtained from the survey.
- Administrative innovation, four-item scale was developed to assess the
degree to which firms promote work redesign and work systems, skills
enhancement, management systems, and changes in incentives.
- Technical innovation, four-item scale was utilized to measure the
degree to which firms change and apply new procedures and processes
within the organization that influence the speed and flexibility of
production and the quality of production (Ussahawanitchakit, 2012).
Factor loading / Cronbach alpha
Administrative innovation:
.83
-­‐
.89
/
0.82
Technical
innovation;
.91
-­‐
.95
/
0.84
**FL
must
>
0.40
/
Cronbach
must
>
0.70

11. I.V. 4
Internal resource
(Physical
resources)
-­‐
Seven-point scale, adapted from Morgan et al. (2004) were used.
- PHR1- Use modern technology and equipment
- PHR2 – Have preferential access to valuable and environmentally
friendly sources of supply.
- PH3 – Have adequate service capacity availability
(Leonidou et al, 2013).
Items Item mean
(SD)
Construct
mean (SD)
PHR - 5.79 (1.06)
PHR1 5.68 (1.25) -
PHR2 5.71 (1.28) -
PHR3 5.96 (1.09) -

12. Table
3
Relationship
between
D.V.
and
I.V.
D.V. 1
Business Performance
D.V.2 (Mediator)
Competitive Advantage
D.V.2
(Mediator)
Competitive
advantage
*Significant at .05 level (Loseoglu et al., 2013)
- For the mediating effects,
competitive advantage has
a potential positive interaction with firm performance
(p14 = 0.47, p<0.01; b18 = 0.48, p<0.01).
Competitive advantage is the outcome of firms’
successful strategy implementation
(Ussahawanitchakit, 2012).
Financial / Non
Financial Performance
Cost leadership .188* / .288*
Differentiation .412* / .464*
-Correlation

13. I.V. 1
Competitive
Environment
Beta between competitive environment and competitive
advantage were -0.18, mean the firms with stronger
competitive environment will be weaker in competitive
advantage (Ussahawanitchakit, 2012).
Competitive environment negatively moderates the firm
performance relationships (b20 = -0.48, p < 0.01). Firms
with stronger competitive environment will be weaker in
firm’s performance (Ussahawanitchakit, 2012).
I.V. 2
Administrative
Innovation
No Direct Effect Administrative Innovation has a significant positive
relationship with competitive advantage. (b1 = 0.46, p <
0.01; b6 = 0.50, p , 0.01) Ussahawanitchakit (2012).
I.V. 3
Technical
innovation
No Direct Effect Technical innovation has an important positive
association with competitive advantage (b2 = 0.41, p <
0.01; b7 = 0.54, p < 0.01), technical innovation
becomes a critical driver of determining competitive
advantage. Ussahawanitchakit (2012).
I.V. 4
Physical
resources
No Direct Effect Correlation matrix.
(Leonidou et al, 2013)
Variable Competitive advantage
Physical resources 0.34
n= 152; Correlations greater than l±0.16l are
significant at the p< 0.05 level.

14. Market uncertainty
MU1.In our kind of business, customer’s product
preferences change quite a bit over time,
MU4. New customers tend to have product-
related needs that are different from those of our
existing customers.
MU5. We cater to many of the same customers
that we used to in the past, MU6. It is very difficult
to predict any changes in this marketplace.
Technology uncertainty
TU2. Technological changes provide big
opportunities in our industry,
TU3. It is very difficult to forecast where the
technology in our industry will be in the next two to
three years,
TU4. A large number of new product ideas have
been made possible through technological
breakthroughs in our industry.
Competitive uncertainty
CU2. There are many ‘promotion wars’ in our industry, CU3.
Anything that one competitor can offer, others can match readily,
CU4. Price competition is a hallmark of our industry,
Internal
Resources
Organizational
Resources
-­‐ Administrative
Innovation
-­‐ Technical
Innovation
Physical
Resources
- PHR1- Use modern technology and
equipment
- PHR2 – Have preferential access to
valuable and environmentally friendly
sources of supply.
- PH3 – Have adequate service capacity
availability
Competitive
Advantage
- Cost
Leadership;
1 Level of
operating efficiency, 2.
Finding ways to reduce
costs, 3. Efficiency of
securing raw materials or
components.
-­‐
Differentiation;
1.Building
strong brand identification, 2.
New product development,
3.developing and utilizing sales
force
Hotel
Firm’
s
Performance
1. Customer satisfaction
2. Company image
3. Coverall firm performance and
success