Abstract
In the world of competition, manufacturing and service companies are trying to enhance their competitive capabilities in order to be able to give more value to their customers and gain prominent positions in competition with other companies. Every company tries to concentrate on its one or more capabilities in competition in order to turn them into a clear competitive advantage that improves the firm performance. In fact, it is necessary for the firms being active in market and being consistent with competitive requirements to gain and maintain a competitive advantage. This study investigates the effect of competitive capability on firm performance under environmental uncertainty conditions. The findings show that competitive capability has direct positive effect on customer satisfaction, financial performance, and market performance. In other words, enhancing these capabilities leads to improving customer satisfaction and increases market and financial performance. Investigation of the effects of different aspects of competitive capabilities on different performance aspects show that the capability of cost leadership positively affects financial performance and market performance but, has no effect on customer satisfaction. Also, the capability of differentiation has direct positive effect on customer satisfaction but affects financial performance and market performance negatively. Additionally, the examination of the moderating effect of perceived environmental uncertainty on the relationship between competitive capability and firm performance shows that in different environmental conditions, the effects of cost leadership capability on customer satisfaction, differentiation capability on financial performance, and differentiation capability on market performance are moderated. On the other word, managerial decisions in these areas are affected by environmental conditions involved in processes of material supply, production, and market demand.
Highlights
The market is changing rapidly and more than before, it seems critical to have quick and appropriate action to these changes
ISSN 1913-9004 E-ISSN 1913-9012 www.ccsenet.org/ibr. It is the main purpose of this study to investigate the role of competitive capability and its elements on firm performance under the conditions of environmental uncertainty perceived by the managers of the firms
The findings show that competitive capability has direct positive effect on firm performance
Summary
The market is changing rapidly and more than before, it seems critical to have quick and appropriate action to these changes. Competition era with qualities of technological changes, global markets effects, and close competition is both creating threats to firms and providing opportunities for them simultaneously Succeeding in such environment needs to gain competitive advantage with enhancing firm’s competitive capabilities. As Porter (1990) mentions in explanation of the success of industries and firms in global competition, competitive advantage will be gained from the organizations’ environmental position as well as their inbound properties of industry and firms He believes that a firm will enhance its competitive advantage when it is surrounded in a powerful boundary of customers, suppliers, and related industries. It is the main purpose of this study to investigate the role of competitive capability and its elements on firm performance under the conditions of environmental uncertainty perceived by the managers of the firms. The main question of the study is: How do competitive capabilities -cost leadership and differentiation- affect firm performance -customer satisfaction, financial performance, and market performance? How does this effect change with conditions of perceived environmental uncertainty?
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