The effects of innovation speed and quality on differentiation and low-cost competitive advantage: The case of Chinese firms

Abstract

Purpose

This paper aims to verify the effect of organizational learning (OL) and two specific aspects of innovation, innovation speed and innovation quality, on competitive advantage.

Design/methodology/approach

Structural equation modeling has been applied to test the degree of influence of OL and innovation on two types of competitive advantage (differentiation and low-cost advantage) using data collected from 279 Chinese firms.

Findings

The findings show that innovation speed and quality play mediating roles in the relationship between OL and competitive advantage. In general, while innovation speed has greater effects on low-cost competitive advantage, OL and innovation quality have greater effects on differentiation competitive advantage.

Research limitations/implications

This paper offers directors/managers a deeper understanding of the factors necessary to promote competitive advantage in their firms.

Practical implications

This paper offers CEOs/managers a deeper understanding of the necessary factors needed to promote competitive advantage in their firms.

Originality/value

This paper provides practical and theoretical initiatives on innovation and competitive advantage that can be used to promote specific aspects of innovation and build up competitive advantage for relevant organizations.

Citation

Le, P.B. and Lei, H. (2018), "The effects of innovation speed and quality on differentiation and low-cost competitive advantage: The case of Chinese firms", Chinese Management Studies, Vol. 12 No. 2, pp. 305-322. https://doi.org/10.1108/CMS-10-2016-0195