The effects of differentiation strategy on market orientation and performance in Vietnamese small restaurants

Abstract

Purpose - This study aims to explore the potential mediating role of differentiation strategy in the relationship between market orientation and restaurant performance based on balanced scorecard approaches. Methodology - Based on the Vietnamese Yellow Pages database, a sample of 144 small restaurants in Vietnam was analysed using partial least squares structural equation modelling. Findings - The results indicate that differentiation strategy fully mediates the relationship between market orientation and restaurant performance based on balanced scorecard approaches. Originality of the research - This study contributes significantly to the field by deepening our understanding of the underlying mechanisms of differentiation strategy on the market orientation-performance links. Focusing on Vietnam, a collectivistic and transitional economy, enhances our comprehension of the influence of market orientation and differentiation strategy on the performance of small restaurants in these distinctive environments. The study provides robust evidence supporting the positive effects of differentiation strategy on performance by using balanced scorecard approaches. It advances the theoretical development of the resourcebased view by using a contingency perspective to empirically demonstrate how organisations can sustain competitive advantages by leveraging their resources.

Keywords

• balanced scorecard
• differentiation strategy
• market orientation
• restaurant performance
• small business
• vietnam