Does Service Innovation Act as a Mediator in Differentiation Strategy and Organizational Performance Nexus? An Empirical Study

Abstract

The study determines how service innovation impacts differentiation strategy and the impact on organizational performance. The target population of this research was 475 hotels, which are three to five star hotels in Malaysia. Due to the small population and the nature of the research, questionnaires were sent by mail and email to all the targeted three to five star hotels' managers. Regression was used to analyse the relationship of differentiation strategy, service innovation and organizational performance. The result shows that differentiation strategy has a significant effect on organizational performance and service innovation has a significant effect on organizational performance. Remarkably, this study found that service innovation partially mediates the relationship of differentiation strategy and organizational performance. This study found that hoteliers that pursuing a differentiation strategy should simultaneously employ service innovation to attain better organizational performance. Thus, this study contributes a significant knowledge to the Malaysia hotel industry. This study fills in some of the gap and showing the significance of differentiation strategy and service innovation in the hotel industry which has received little empirical attention in current strategic management literatures. It also offers some practical contributions to the development of service innovation in relation to differentiation strategy and organizational performance.

Resources and Competitive Strategies to Improve the Performance of Diving Tourism Business in Indonesia

“…The research findings reveal that competitive strategies influence business performance and support the research findings of Valipour et al (2012) which show that there is a relationship between cost leadership strategies and performance. This finding also supports Kaliappen and Hilman (2014) stating that differentiation strategies have a significant impact on organizational performance. Likewise they are in accordance with the findings of Teeratanirikool et al (2012) that all competitive strategies positively and significantly improve company performance through performance measurement.…”

“…7 Empirically a negative effects is found in Barro (1991), Barro and Lee (1994), Sachs and Warner (1995), Bassanini et al (2001), a positive effect in Caselli et al (1996) while in Levine and Renelt (1992), Bassanini et al (2001), empirical evidence is not robust. 8 See for example Valipour et al (2012), Kaliappen andHilman (2014), Teeratanirikool et al (2012).…”

“…Aspects that influence business performance according to Valipour, Birjandi, and Hamid (2012) research are cost leadership strategies. In addition, Kaliappen and Hilman (2014) found that differentiation strategies have a significant impact on organizational performance. Likewise with the findings of Teeratansirikool, Siengthai, Badir and Yuosre (2012) that competitive strategies positively and significantly improve company performance.…”

Differentiation Strategy of Soes Construction Service in Indonesia: A Point of View of Project Managers

“…The results of this study also confirm the literature of Porter [14] which states that innovation is the only way for a company to gain a sustainable competitive advantage and improve its performance. The study also supports the thesis that states the organization's ability to improve innovation management will directly affect the company's performance [ [30]; [31]; [32]]. This study also shows that the effects of innovation management on differentiation strategy will produce a strong and significant effect.…”

Hotel performance and research streams: a network cluster analysis

“…This list suggests, on one hand, the relevance of market orientation as a determinant of hotel performance, and, on the other, the presence of different approaches that reduce generalizability. In this group, there are some works that combine market orientation with product innovativeness, new service development or simply innovation (Kaliappen and Hilman, 2014). These papers explain a third sub-group of innovation.…”