Which Competitive Advantage(s)? Competitive Advantage–Market Performance Relationships in International Markets

Abstract

Business scholars and managers stress the importance of achieving and sustaining competitive advantage as a critical strategic step in enabling superior firm performance. Yet which types of competitive advantage may yield the best performance outcomes—and what contingency factors may affect this—remains largely unexplored. This article examines the contribution of price, product, and service advantages to market performance in international ventures. Applying customer value logic to the literature on value creation and value capture, the authors posit that the symmetric achievement of all pairs of advantages leads to increased market performance. The findings confirm this conjecture, while for the product–service advantage pairing, even asymmetry in achievement has a positive market performance effect when the asymmetry is toward service. Using primary data from a sample of U.K. manufacturing exporters, the authors find that price advantage has a direct positive effect on market performance, while the strong positive effect of service advantage is further strengthened (and the nonsignificant effect of product advantage becomes negative) when the distributor has high-quality relationships with the overseas customers and there is available production capacity, even in technologically turbulent environments.