The Quality of Relationship with Stakeholders, Performance Risk and Competitive Advantage in the Hotel, Restaurant and Café Market

Vida Skudiene,Yuhua Mccorkle,Daniil Blagoveščenskij,Denny Mccorkle

doi:10.15388/omee.2021.12.54

Abstract

   While emerging markets have become an opportunity for companies in the less populated and saturated markets to expand their business, they also impose challenges for foreign partners’ competitive behavior. To offer the value that would be competitive in emerging markets, companies need to improve the quality of their relationship with business partners. Relationship quality may enhance the probability of continued interchange between companies and their stakeholders, leading to increased attractiveness for the emerging markets’ economy. This research explores antecedents (communication and relationship longevity) of relationship quality with stakeholders (suppliers, customers, and employees) and how the relationship quality with three stakeholders impacts the company’s performance risk and competitive advantage in the Lithuanian hotel, restaurant, and café market. The findings suggest that communication and relationship longevity have a positive effect on relationship quality with all three stakeholders. A higher level of relationship quality with stakeholders has a more positive effect on competitive advantage and a more significant negative effect on performance risk. The study expands the understanding of relationship quality antecedents (communication and relationship longevity) and relationship quality with customers, suppliers, and employees in terms of competitive advantage and performance risk in the less populated and saturated hotel, restaurant, and café market seeking expansion to emerging markets.  

Highlights

As domestic markets of less populated and developed countries become more saturated, companies consider the opportunities to expand their activities in emerging markets that are attractive for their rapid economic growth, customer, and market size
The findings suggest that communication and relationship longevity have a positive effect on relationship quality with all three stakeholders
Data gathering and research instrument operationalization This research aims to evaluate the effect of relationship quality antecedents on the quality of the relationship with stakeholders and the impact of the relationship quality with the three stakeholders on the company‘s performance risk and competitive advantage

Summary

Introduction

As domestic markets of less populated and developed countries become more saturated (www.lpk.lt), companies consider the opportunities to expand their activities in emerging markets that are attractive for their rapid economic growth, customer, and market size. According to Hoskisson et al (2000), emerging economies seek to maintain economic growth and willingly open their borders to other countries. The successful entry to emerging markets depends on the external factors and on people-based skills (Sekliuckiene, 2013). The relationship quality with stakeholders may enhance the chances of successful expansion to emerging markets. The rapidly developing Baltic countries’ economy and borderless marketplace has made it an imperative that researchers better understand the phenomena of the relationship quality with stakeholders that enable a less populated, saturated market expansion to emerging markets

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