Market Competitiveness and Quality Performance in High-contact Service Industries

Research output: Journal article publicationJournal articleAcademic researchpeer-review

12 Citations (Scopus)


Purpose - The purpose of this paper is to explore conceptually and examine empirically the impact of market competitiveness on employee satisfaction, service quality, and customer satisfaction in high-contact service industries. Design/methodology/approach - An empirical study was conducted in high-contact service shops in Hong Kong. Dyadic data were collected from 210 high-contact service shops and were analysed using structural equation modelling. Findings - The results confirm that market competitiveness has a direct impact on service quality, not employee satisfaction. The findings also reveal that service quality affects customer satisfaction, which in turn leads to employee satisfaction, forming a 'quality-customer satisfaction-employee satisfaction cycle'. Practical implications - The results recommend that firms take a long-term perspective towards investment in understanding the competitiveness of the market. Such an understanding helps managers identify and implement appropriate quality-improvement activities, such as establishing quality standards, providing appropriate job description to service employees, and adopting a customer-oriented strategy, leading to enhanced customer satisfaction and employee satisfaction in a cyclic manner. Originality/value - This study contributes to a detailed understanding of how service firms should strategically respond to market competitiveness.
Original languageEnglish
Pages (from-to)573-588
Number of pages16
JournalIndustrial Management and Data Systems
Issue number4
Publication statusPublished - 29 Jul 2013


  • Competitive strategy
  • Customer satisfaction
  • Customer services quality
  • Employee satisfaction
  • Hong Kong
  • Market competitiveness
  • Service industries
  • Service quality

ASJC Scopus subject areas

  • Management Information Systems
  • Industrial relations
  • Computer Science Applications
  • Strategy and Management
  • Industrial and Manufacturing Engineering


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