Is Chain Affiliation a Strategic Asset or Constraint in Emerging Economies? Competitive Strategies and Performance in the Russian Hotel Industry

Abstract

The purpose of the paper is to find out how chain affiliation, an important strategic choice and a key determinant for hotel performance, influences the strategy-performance nexus in the emerging economy context. It combines the resource- and institution-based views to investigate how chain affiliation moderates the relationship between competitive strategy and performance. This is done by distinguishing between market-based strategies based on differentiation or cost leadership, and non-market strategies that manifest in institutional advantage. The empirical analysis draws from original survey data on 162 hotels located in the Russian cities Moscow and St. Petersburg. The paper finds that first, in emerging economies the competitive edge of chain-affiliated hotels largely arises from market-based advantage, but only in terms of cost advantage. The finding that differentiation advantage is not an important factor of performance for chain-affiliated hotels suggests that firm-level resources derived from chain affiliation would not transform into competitive advantage in the emerging economy context. Second, it is found that institutional advantage is more important determinant of performance for independent hotels, demonstrating the importance of local knowledge and relationships for firms in emerging economies. This finding also suggests that chain affiliation might be rather a strategic constraint than asset for creating superior performance via institutional advantages in the emerging economy context.

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“…These studies can be categorized into two primary approaches: the first primarily integrates financial data, while the second approach incorporates various intrinsic and other extrinsic variables. As an instance, these latter studies (Sami & Mohamed, 2014;Bresciani et al, 2015;Lado-Sestayo et al, 2017;Lado-Sestayo & Vivel-Búa, 2018Menicucci, 2018;Lima Santos et al, 2020;Karhunen & Ledyaeva, 2021) include size, location, ownership structure, hotel affiliation, internationalization, first activity of the hotel, education (of the general manager and/or financial manager), population density, proximity to the airport, seasonality, number of stars, chain branding, occupancy rate etc. In their research Sami & Mohamed (2014) conclude that hotels affiliated within international chains or franchises, and this is in line with the study carried by (Karhunen & Ledyaeva, 2021).…”

“…As an instance, these latter studies (Sami & Mohamed, 2014;Bresciani et al, 2015;Lado-Sestayo et al, 2017;Lado-Sestayo & Vivel-Búa, 2018Menicucci, 2018;Lima Santos et al, 2020;Karhunen & Ledyaeva, 2021) include size, location, ownership structure, hotel affiliation, internationalization, first activity of the hotel, education (of the general manager and/or financial manager), population density, proximity to the airport, seasonality, number of stars, chain branding, occupancy rate etc. In their research Sami & Mohamed (2014) conclude that hotels affiliated within international chains or franchises, and this is in line with the study carried by (Karhunen & Ledyaeva, 2021). In addition, Sami & Mohamed (2014) state that hotels strategically located in coastal or attractive area, demonstrate superior financial performance compared to standalone hotels.…”

Peculiarities of formation of competitive strategy of the enterprises of flour-milling branch of Ukraine

“…These factors will ensure the company with a competitive advantage. Karhunen and Ledyaeva (2021), Adechian, Baco and Olarinde (2021) considered the key factors in the formation of competitive strategy in various fields. In farming field, an important factor is the diversification of social ties (Karhunen & Ledyaeva, 2021), while in ijmp.jor.br v. 12, n. 6, Special Edition ISE, S&P -November 2021ISSN: 2236-269X DOI: 10.14807/ijmp.v12i6.1759 hotel business belonging to a retail chain does not provide a competitive advantage (Adechian, Baco & Olarinde, 2021).…”