Competitive capabilities: Measurement and relationships
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abstract
This study proposes a framework for research on competitive capabilities development within the context of manufacturing strategy. This framework comes to bridge a gap between research on the process and content of manufacturing strategy. Progressively, we identify relationships between competitive capabilities as manifested in a structural model and then we develop a measurement model. Competitive capabilities are an immediate antecedent to economic performance and includes product innovation, delivery dependability, value to customer quality, competitive price and premium price. Ultimately, the measurement and structural models are tested via a sample of 244 firms. The measurement model performed very well under an array of testing. Results from the structural model indicate that all competitive capabilities have a significant positive direct/indirect relationship with profitability. In addition, product innovation has a positive relationship with value to customer quality, delivery dependability, and premium price capability. Delivery dependability has a positive relationship with competitive price capability while value to customer quality had a positive relationship with premium price capability.
