Revista Internacional de Economía y Ciencias de la Gestión

GAINING COMPETITIVE ADVANTAGE AND ORGANIZATIONAL PERFORMANCE THROUGH CUSTOMER ORIENTATION, INNOVATION DIFFERENTIATION AND MARKET DIFFERENTIATION

Abstract

Basheer Abbas Al-alak , Saeed (M.Z) A. Tarabieh

This paper examines the relationship between customer orientation, innovation differentiation, market differentiation and organizational performance in the banking industry in Jordan. A survey of 16 Jordanian banks provides the basis for the empirical investigation. The relationships between the four latent constructs are examined using structural equation modeling and confirmatory factor analysis. The findings show that customer orientation contributes positively to organizational performance by providing innovation differentiation and market differentiation. Another finding of this study is that the impact of innovation differentiation on organizational performance is greater than market differentiation. In addition, doing both innovation differentiation and market differentiation simultaneously achieves greater competitive advantage that leads to best results in organizational performance. Finally, this paper also discusses the theoretical and managerial implications of the results.