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IJCHM
35,6 Effects of entrepreneurial
orientation, marketing, and
innovation capabilities, on market
1986 performance: the mediating
Received 20 April 2022
Revised 25 July 2022
effect of sustainable
14 September 2022
30 September 2022
Accepted 5 October 2022
competitive advantage
Sayed Darwish Elgarhy
Department of Tourism Studies, Higher Institute of Tourism and Hotels,
King Marriott, Alexandria, Egypt, and
Mohamed Abou-Shouk
College of Arts, Humanities, and Social Sciences, University of Sharjah, Sharjah,
United Arab Emirates and Department of Tourism Studies,
Faculty of Tourism and Hotels, Fayoum University, Al Fayoum, Egypt

Abstract
Purpose – The purpose of this study is to examine the direct/indirect effects of sustainable competitive
advantage (SCA) antecedents (entrepreneurial orientation, marketing capability, innovation capability and
marketing innovation) on market performance (MP) in travel agencies.
Design/methodology/approach – A survey was used for data collection randomly from 315 managers
in travel agencies and structural equation modelling was used for testing research hypotheses.
Findings – The findings of this study showed that SCA is a partial mediator between SCA antecedents and
MP. SCA antecedents significantly improve the prediction of travel agencies’ MP.
Practical implications – This study offers useful insights to managers, services providers and marketers
of travel services who seek to achieve competitive positions and strengthen their marketing and innovation
capabilities to support their survival in the travel supply chain in an accelerated technological changeable
travel and tourism market.
Originality/value – The literature review lacks an integrated model that investigates the effect of SCA
and its antecedents on MP. The introduced research model provides a deep insight into the mediating role of
SCA in improving business performance.
Keywords Entrepreneurial orientation, Marketing capability, Innovation capability,
Competitive advantage, Market performance, Travel agencies, Egypt
Paper type Research paper

1. Introduction
International Journal of Changes in technology and the travel market’s fierce competition have pushed travel
Contemporary Hospitality
Management
agencies to achieve sustainable competitive advantage (SCA) to improve their market
Vol. 35 No. 6, 2023
pp. 1986-2004
performance (MP) (Abou-Shouk et al., 2021a). Lee and Yoo (2021) defined SCA as the
© Emerald Publishing Limited business’s capability to meet customer expectations better than their rivals. Widyanti and
0959-6119
DOI 10.1108/IJCHM-04-2022-0508 Mahfudz (2020) revealed that entrepreneurial orientation (EO) is one of the SCA
contributors. EO expresses a company’s willingness to improve performance by embracing Effects of
innovativeness, proactivity and risk-taking (Peters and Kallmuenzer, 2018). It operates as a entrepreneurial
business motivator to find and develop entrepreneurial opportunities (Donbesuur et al.,
2020) and to define strategic procedures and activities for tactical choices and actions
orientation
(Ribeiro et al., 2021).
Another contributor to SCA is business marketing capability (MC) (Kamboj and
Rahman, 2017). MC is the innovative procedure used to respond to market needs including
product, administration and marketing innovative tools (Bambang et al., 2021). Pascual- 1987
Fern
andez et al. (2021) emphasised the necessity of building business innovation capability
(IC) to achieve SCA. Meanwhile, Na et al. (2019) highlighted marketing innovation (MI) as an
enabler of SCA. Hussain et al. (2020) defined MI as implementing new and unique marketing
strategies to achieve SCA. An in-depth investigation of EO, MC, IC and MI in literature
studies revealed that integrating these concepts provides a better prediction of SCA. For
example, Makhloufi et al. (2021) found that EO is predicting MC and IC and Potocan (2013)
found that MC is an antecedent of IC, and Lee and Yoo (2021) found that SCA improves
business performance and mediates EO, MC, IC and business performance associations
(Hussain et al., 2020; Kamboj and Rahman, 2017; Mahmood and Hanafi, 2013).
Tracing the SCA concept, it is found that there is no integrative model that simultaneously
investigates the SCA antecedents and links SCA to MP. Prior investigations can be classified
into seven categories. The first explores the effect of EO on SCA (Bambang et al., 2021; Kiyabo
and Isaga, 2020; Sirivanh and Sukkabot, 2014; Widyanti and Mahfudz, 2020), the second
examines the impact of MC on SCA (Bambang et al., 2021; Kamboj and Rahman, 2017; Lee and
Yoo, 2021), the third studies the relationship between IC and SCA (Adam et al., 2017; Ferreira
et al., 2020; Pascual-Fern
andez et al., 2021; Ruiz-Ortega et al., 2021a), the fourth analyses the link
between MI and SCA (Anning-Dorson, 2018; Hussain et al., 2020; Javanmard and Hasani, 2017;
Na et al., 2019), the fifth estimates the interactive relationships among SCA’s antecedents (i.e. EO,
MC and IC) (Makhloufi et al., 2021; Potocan, 2013), the sixth explores the relationship between
SCA and MP (Lee and Yoo, 2021; Na et al., 2019) and the seventh measures the mediating role of
SCA (Hussain et al., 2020; Kamboj and Rahman, 2017; Mahmood and Hanafi, 2013).
The present study integrates the relationships between SCA antecedents (i.e. EO, MC and
IC) and MI. Therefore, it differs from previous studies, develops a comprehensive research
model that provides a deep understanding of SCA and MP and explores the mediating role
of SCA. Understanding these associations helps travel service providers to re-evaluate their
competitive positions and strategies to improve their MP (Hussain et al., 2020) and work
processes of trip planning, booking and scheduling (Ruiz-Ortega et al., 2021b). Investigating
the proposed research model in travel agencies helps improve travel supply chain processes.
Travel agencies are one of the most threatened players in the travel supply chain because of
competitive online platforms replacing traditional players, and therefore, they need creative
strategies of marketing and innovation to meet customer expectations and reinforce their
existence in the travel marketplace (Abou-Shouk et al., 2016).

2. Literature review
2.1 Sustainable competitive advantage
The crucial goal of many businesses is to meet customer expectations and improve their
competitive positions (Lee and Yoo, 2021). Pratono et al. (2019) defined SCA as creating a
value through which a company pursues high innovation to stay competitive in the market.
Jin et al. (2022) pointed out that SCA is achieved by using the firm’s resources and
capabilities to gain a good advantage. Consequently, this advantage leads to improved MP
and consumers’ turn to purchase business products and services rather than others
IJCHM (Widyanti and Mahfudz, 2020). According to Lee and Hsieh (2010) and Molina-Collado et al.
35,6 (2022), competitive advantages should be sustainable and unique to keep the business ahead
of competitors. Sustainability needs firms to adopt innovative strategies to improve service
quality and introduce new products or services for better customer value (Gutiérrez-
Martínez and Duhamel, 2019; Hossain et al., 2021; Nashiruddin and Susanti, 2021). Previous
studies investigated SCA antecedents. Bambang et al. (2021) examined the link between EO
1988 and SCA; Kamboj and Rahman (2017) found an association between MC and SCA;
Hofmeister et al. (2022) and Pascual-Fern
andez et al. (2021) revealed a significant effect of IC
on SCA; and Anning-Dorson (2018) found a significant influence of MC on SCA. These
relationships will be introduced in detail in the following sections.

2.2 Entrepreneurial orientation and sustainable competitive advantage

Kamal et al. (2016) described EO as the company’s orientation to seek out new opportunities,
while Peters and Kallmuenzer (2018) said it is the company’s willingness to embrace
innovativeness, proactivity and risk-taking while it is affected by socio-cultural contexts
(Altinay and Wang, 2011). Thus, innovativeness, proactivity and risk-taking were identified
as the three components of EO in literature research (Becherer and Maurer, 1997; Chien and
Tsai, 2021; Dickson and Weaver, 2008; Do and Luu, 2020; Miller, 1983). Innovativeness
refers to the company’s tendency to backup new opinions and innovations to develop or
generate new products and services (Amarteifio and Agbeblewu, 2020; Jiménez-Jiménez and
Sanz-Valle, 2011; Luu, 2022; Tang et al., 2020). Proactiveness means that firms try to lead by
seeking new opportunities and introducing innovative products and operational
technologies (Amarteifio and Agbeblewu, 2020). Risk-taking is associated with risk
concerns, decision-making and choices in an uncertain environment (Casillas and Moreno,
2010). Hence, EO is considered the main incentive for building SCA and improving business
performance and growth (Altinay et al., 2016; Lee and Yoo, 2021; Thirumalesh et al., 2021).
The tourism and hospitality industry tends to be more entrepreneurial via competitiveness
in the market (Asmelash and Kumar, 2019; Ruiz-Ortega et al., 2021b). Prior studies have
revealed a positive consequence of EO on SCA (Bambang et al., 2021; Kiyabo and Isaga,
2020; Mahmood and Hanafi, 2013; Sirivanh and Sukkabot, 2014; Widyanti and Mahfudz,
2020). Thus, the first research proposition was formed as:

H1. Entrepreneurial orientation significantly affects sustainable competitive advantage.

2.3 Marketing capability and sustainable competitive advantage

MC is a significant driver of business SCA (Kamboj and Rahman, 2017). It is the investment
of business resources to maintain interactive relationships with customers, improve market
sensors’ capabilities (Lee and Yoo, 2021), provide value to customers (Martin and Javalgi,
2016), meet desired objectives (Day, 2011) and satisfy the market-related needs (Mainardes
et al., 2022; Najafi-Tavani et al., 2016). Bambang et al. (2021) classified MC into four subsets:
product, processes, administration and MI. In this respect, MC helps companies to acquire
market knowledge, develop marketing technologies and expand management capabilities to
adapt to the challenges of the marketplace (Day, 1994; Lee and Hsieh, 2010). The service
companies’ strategy depends on combining markets and capabilities with the client’s
demands as the basis for growth and competitive advantage building. Several empirical
studies revealed a positive link between MC and SCA (Bambang et al., 2021; Kamboj and
Rahman, 2017; Lee and Yoo, 2021). Hence, the second hypothesis is constructed:

H2. Marketing capability significantly affects sustainable competitive advantage.

2.4 Innovation capability and sustainable competitive advantage Effects of
IC is referred to as the capability to turn information and ideas into new products, procedures entrepreneurial
and structures for the advantage of the business (Balan and Lindsay, 2010; Mohammad et al.,
2019). Lee and Yoo (2021) defined IC as the abilities and knowledge necessary to efficiently
orientation
control and enhance current technologies in addition to adding innovative ones. IC is nominated
as a driver to create, develop and implement innovative design and production technologies
(Omar et al., 2016). The adoption of innovation is linked with leadership support (Arici and
Uysal, 2022), organisational learning (Akgün et al., 2022) and business intelligence (Khaddam 1989
et al., 2021). However, IC is one key source of SCA in hospitality and tourism enterprises (Balan
and Lindsay, 2010; Gürlek and Koseoglu, 2021; Pascual-Fern
andez et al., 2021; Ruiz-Ortega et al.,
2021a). To increase consumer value and gain a competitive advantage, tourism companies must
build and develop innovative ideas by using innovative and collaborative trip planners to meet
customers’ suggestions and improve their processes (Lee and Hsieh, 2010). In addition, IC helps
marketers get a unique value to distinguish their business from other rivals (Pongsathornwiwat
et al., 2019). In addition, tourism enterprises must meet the market needs for innovation and
adapt to changeable market conditions to survive particularly in crises times (Abou-Shouk et al.,
2016; Anh and Thong, 2020; Giousmpasoglou et al., 2021; Ritchie and Jiang, 2021; Yang and
Han, 2021). Literature studies have verified the significant consequence of IC on SCA (Adam
et al., 2017; Ferreira et al., 2020; Kamboj and Rahman, 2017; Lee and Yoo, 2021; Naidoo, 2010). On
this basis, the third hypothesis is:

H3. Innovation capability significantly affects sustainable competitive advantage.

2.5 Marketing innovation and sustainable competitive advantage

MI is defined as a process that enhances marketing practices and innovation to increase
business competitiveness and improve performance (Na et al., 2019). It refers to the
implementation of a new marketing strategy that includes substantial changes in designing
or packaging programs, promotion and pricing (Hussain et al., 2020). MI involves creative
and innovative tactics, techniques, devices, strategies, procedures, policies, schemes and
methods used in products’ marketing (Javanmard and Hasani, 2017). In addition, it includes
market knowledge, advertising, publicity, promotion and market control (Quaye and
Mensah, 2019). Most advances in marketing stem from incremental innovative activities to
penetrating new markets and taking new techniques to sales (Persaud et al., 2021).
Chichkanov et al. (2021) found that MI adoption is affected by business advertising’s share
of expenditure. Within the prompt moving market conditions, the survival of tourism
enterprises depends on how innovations are used to attract new customers and increase
efficiency and profits (Khristianto et al., 2021; Vipin and Ian, 2020). In this respect, tourists
become co-designers, planners, marketers, producers and co-customers of the tourism
experience (Vipin and Ian, 2020). Based on previous studies by Anning-Dorson (2018), Na
et al. (2019), Hussain et al. (2020) and Javanmard and Hasani (2017), it is revealed that MI is
one significant source of SCA. Therefore, this proposition is developed:

H4. Marketing innovation is positively affecting sustainable competitive advantage.

2.6 Interactive relationships between entrepreneurial orientation, marketing capability and

innovation capability
As introduced earlier that EO, MC and IC have significantly affected SCA, previous studies
have also explored interactive relationships between these concepts (EO, MC and IC). For
IJCHM instance, Lee and Hsieh (2010) and Bambang et al. (2021) found that EO is positively
35,6 affecting firms’ MC; meanwhile, Makhloufi et al. (2021) and Lee and Hsieh (2010) revealed a
substantial association between EO and IC. Meanwhile, Potocan (2013) and Lee and Hsieh
(2010) found a positive link between MC and IC. This means that EO is a contributor to MC
and IC, while MC is a predictor of IC. Therefore, the subsequent propositions are developed:

1990 H5. Entrepreneurial orientation has a positive effect on marketing capability.

H6. Entrepreneurial orientation significantly affects innovation capability.
H7. Marketing capability significantly influences innovation capability.

2.7 Sustainable competitive advantage and market performance

SCA is an added value to the business products and practices (Pratono et al., 2019). It helps
businesses to meet their customer needs better than competitors (Lee and Yoo, 2021) and to
achieve economic value for the business (Newbert, 2008). As a result of achieving SCA,
higher MP is also achieved (Widyanti and Mahfudz, 2020). Continuous improvements in
products, processes and services are the key drivers for improving MP and profitability
(Gutiérrez-Martínez and Duhamel, 2019; Hossain et al., 2021; Hussain et al., 2020; Lee and
Hsieh, 2010; Nashiruddin and Susanti, 2021). Marketing performance could be measured
financially and non-financially, and the latter focuses on the performance of customers in
terms of satisfaction, loyalty and brand recommendation to others (Jayapal and Omar, 2017;
Na et al., 2019). Previous studies revealed that SCA is significantly predicting high MP (Lee
and Yoo, 2021; Na et al., 2019; Newbert, 2008). Therefore, we hypothesised that travel
agencies that developed SCAs in their products, services or processes to meet customer
expectations will have high MP. Hence, it is suggested that:

H8. Sustainable competitive advantage influences market performance.

2.8 The mediating role of sustainable competitive advantage

Introducing the earlier direct relationships between EO, MC, IC, MI and SCA and the direct
relationship between SCA and MP provides evidence of the mediating role of SCA.
Furthermore, extant empirical research revealed a significant mediation effect of SCA
between strategic orientation, supply chain capability and business performance (Newbert,
2008). Mahmood and Hanafi (2013) verified the SCA mediation role between EO and the
performance of women-owned small and medium-sized enterprises (SMEs). Likewise,
Kamboj and Rahman (2017) found a significant mediation effect of SCA between marketing
capabilities and firm performance. A study by Widyanti and Mahfudz (2020) revealed a
significant mediation effect of SCA between EO, IC and business performance. Similarly,
Hussain et al. (2020) found a mediation effect between MI and MP. A recent study by Jin et al.
(2022) found that competitive advantage mediates the relationship between management
activities and corporate performance. Therefore, the following hypotheses are introduced:

H9. Sustainable competitive advantage mediates the association between entrepreneurial

orientation and market performance.
H10. Sustainable competitive advantage mediates the association between marketing
capability and market performance.
 H11. Sustainable competitive advantage mediates the association between innovation Effects of
capability and market performance. entrepreneurial
H12. Sustainable competitive advantage mediates the association between marketing orientation
innovation and market performance.

3. Research framework
1991
The current study adopts and integrates two models (Figure 1). The first investigates the
effect of EO, MC, IC and MI on SCA based on the theoretical basis of the resource advantage
theory, commonly used in tourism research (Amin, 2021; Hussain et al., 2020; Russen et al.,
2021), and validated by empirical research (Arnett et al., 2021; Hunt, 2011; Hunt and Arnett,
2004; Hunt and Morgan, 1996). The second explores the influence of SCA on MP, whereas
the resource advantage theory of competition posits that firms always strive for
comparative resource advantages to achieve better market positions and improve their
financial performance (Day, 1994; Hunt and Morgan, 1996). The research models proposed
in literature studies are partially adopted and integrated into this study (Bambang et al.,
2021; Hussain et al., 2020; Lee and Yoo, 2021; Makhloufi et al., 2021; Potocan, 2013) to
investigate the impact of EO, MC, IC and MI on SCA, as well as the mediation role of SCA on
MPs of the travel agents (12 hypotheses, Figure 1).

4. Research methods
4.1 Measures
The present study involves six variables (Figure 1) adapted and integrated from extant
studies. EO was assessed using five items based on previous research (Bambang et al., 2021;
Kiyabo and Isaga, 2020; Makhloufi et al., 2021; Tang et al., 2020; Widyanti and Mahfudz,
2020). MC is measured by four items (Kamboj and Rahman, 2017; Lee and Hsieh, 2010; Lee
and Yoo, 2021; Potocan, 2013). Five items of IC were used from literature investigations
(Adam et al., 2017; Anh and Thong, 2020; Ferreira et al., 2020; Kamboj and Rahman, 2017;
Lee and Yoo, 2021). MI was assessed through five items (Anning-Dorson, 2018; Hussain
et al., 2020; Na et al., 2019), and five items were incorporated to measure SCA (Hossain et al.,
2021; Hussain et al., 2020; Nashiruddin and Susanti, 2021; Pratono et al., 2019). Finally, MP is
measured by four items (Haseeb et al., 2019; Jayapal and Omar, 2017; Newbert, 2008).

Entrepreneurial Marketing
Orientation (EO) Innovation (MI)
H1
H5 H4

H2 Sustainable
H6
Marketing
Competitive
H8 Market
Capability (MC) Performance (MI)
Advantage (SCA)

H7 H3 SCA mediates:
H9: EO-MP Figure 1.
H10: MC-MP
Innovation H11: IC-MP The research
Capability (IC) H12: MI-MP framework
IJCHM 4.2 Sampling and data collection
35,6 E-survey was used to gather data from target respondents. The quantitative research
method was used to test the research hypotheses. First, the survey’s cover page offers a
concise overview of the significant long-term SCA in tourism enterprises. The survey was
then divided into two parts. Part 1 focused on the study sample’s demographic variables.
Part 2 included 28 indicators of the investigated research constructs. The survey was
1992 designed and verified by examining its content and face validity on 50 travel agencies. A
five-point Likert scale was used to measure the six concepts. This research aimed to
evaluate the perceptions of travel agencies’ implementation of EO, MC, IC, MI and its effects
on achieving SCA and improving the MP. Three categories of managers (i.e. general,
customer care and sales) were targeted to fill in the survey in travel agencies authorised for
outbound/inbound tourism activities in Egypt. Of the 2,281 travel agencies in Egypt, 1,221
are located in Cairo (ETAA, 2020). In all, 350 questionnaires were distributed between
September and December 2021, of which 315 valid responses were returned. The e-survey
was distributed to randomly selected travel agencies through research assistants, friends
and acquaintances.

4.3 Analysis method

PLS-SEM was used to examine the suggested model using WarpPLS software. PLS-SEM is
widely used in empirical tourism research (Abou-Shouk et al., 2021b, Elgarhy et al., 2019;
Seyfi et al., 2021; Tichaawa et al., 2021; Wan et al., 2021) and is suitable for measuring
sophisticated models with direct–indirect causal relationships (Hair et al., 2021; Kock, 2021).
The study followed the thresholds of average variance extracted (
0.50) (Fornell and
Larcker, 1981) to achieve convergent and discriminant validities and
0.7 for reliability
(Hair et al., 2016).

5. Research findings
5.1 Respondents’ profile
Demographic data show that 57.1% of respondents are males. Of the respondents, 54% are
aged between 36 and 45 years. Of the respondents, 66.7% questioned hold a university
degree, compared to 11.1% with a postgraduate qualification. In all, 41.2% of respondents
are general managers, 23.9% of them are customer care ones and the sales ratio is 34.9%
(Table 1). Responders have optimistic thoughts on research constructs: EO (mean = 4.30),
MC (4.23), IC (4.20), MI (4.28), SCA (4.31) and MP (4.35).

Demographics Respondent’s profile Frequency (%)

Gender Male 180 57.1

Female 135 42.9
Age 25–35 45 14.3
36–45 170 54.0
45 and more 100 31.7
Qualification High school 70 22.2
University 210 66.7
Postgraduate 35 11.1
Position General manager 130 41.2
Table 1. Customer service manager 75 23.9
Demographics data Sales manager 110 34.9
5.2 Measurement model Effects of
The revealed indices significantly showed a valid measurement: APC = 0.428, ARS = 0.564, entrepreneurial
AARS = 0.561, AVIF = 3.935 (< 5), AFVIF = 4.515 (< 5), GoF = 0.655 (large), SPR = 1
(ideal), RSCR = 1 (ideal), SSR = 1 (ideal) and NLBCDR = 1 (ideal). Table 2 reveals AVE
orientation
values greater than 0.50, and thus, convergent validity is evident. Furthermore, discriminant
validity exists where the square root of AVEs is greater than the inter-construct
correlations. Table 3 presents reliability values of more than 0.70, indicating that the model
is reliable.
1993

5.3 Structural model

It illustrates the causative associations among latent variables. Looking at Figure 2, it is
revealed that SCA is significantly predicted by EO (b = 0.3 and H1 is accepted), MC (b =
0.18 and H2 is accepted), IC (b = 0.28 and H3 is accepted) and MI (b = 0.20 and H4 is
accepted). The four constructs, EO, MC, IC and MI, explain 35% of the variance in SCA.
Furthermore, EO significantly influences MC (b = 0.72 and H5 is accepted). It accounts
for 52% of the variation in MC. This means that EO has a large effect on MC. In addition,
EO is positively influencing IC (b = 0.44 and H6 is supported). Additionally, MC has a
substantial impact on IC (b = 0.45 and H7 is accepted). It predicts 69% of the variation in
IC. This means that the EO and MC have a large effect on IC. Furthermore, it is revealed
that SCA is positively affecting the MP of the Egyptian travel agencies (b = 0.46 and H8
is accepted).
As for the mediating effects, it is revealed that MP is significantly affected by EO (b =
0.43 and H9 is accepted), MC (b = 0.14 and H10 is accepted), IC (b = 0.18 and H11 is
accepted) and MI (b = 0.15 and H12 is accepted). The significance of direct relationships in
H9, 10, 11 and H12 suggests that SCA partially mediates the links of EO, MC, IC, MI and
MP. EO, MC, IC, MI and SCA explain 80% of the variance in the MP of the Egyptian travel
agencies (R2 = 0.80). EO’s total effects on MP are large, while the total effects of MC, IC and
MI on MP are medium. Table 4 provides a summary of hypothesis-testing results, indirect,
total effects and effect size values.

6. Discussion of findings
This research aimed at measuring the direct/indirect effects of EO, MC, IC and MI on MP of
travel agencies in Egypt. Travel agencies are critical players in the travel supply chain that
are under the threat of disintermediation because of competition from online booking
platforms, and therefore, they must achieve SCA to support their future survival. They need
to adopt innovative technologies and strategies for operational procedures, marketing and
production services. Scanning the literature review, it is found that SCA and MP
relationships are fragmented, and no integrative model was found to provide a deep
understanding of SCA relationships with MP. Differently from extant research, the present
study developed an integrated research model that evaluates direct/indirect interactions of
EO, MC, IC and MI on MP. It also measured the interaction effect between EO, MC and IC.
Thus, it adds to the extant knowledge of SCA antecedents and outcomes in tourism research
in the developing countries’ context. Consequently, it highlighted the needed changes in
tourism and hospitality business operations, technologies and marketing strategies to
improve their MP. It also emphasised the importance of intercommunication between travel
agencies and tourists in programs’ planning to increase customer satisfaction and loyalty.
Concurrently, travel agencies tend to be innovative in developing products and services that
match today’s tourist demands.
 35,6

1994
IJCHM

Table 2.

inter-constructs
correlations and
descriptive statistics
Square root of AVEs,
Construct EO MC IC MI SCA MP Mean SD

Entrepreneurial orientation (EO) (0.891) 4.301 0.764

Marketing capability (MC) 0.684 (p < 0.001) (0.860) 4.234 0.689
Innovation capability (IC) 0.757 (p < 0.001) 0.769 (p < 0.001) (0.882) 4.203 0.801
Marketing innovation (MI) 0.834 (p < 0.001) 0.811 (p < 0.001) 0.842 (p < 0.001) (0.854) 4.288 0.697
Sustainable competitive advantage (SCA) 0.783 (p < 0.001) 0.700 (p < 0.001) 0.726 (p < 0.001) 0.849 (p < 0.001) (0.883) 4.318 0.730
Market performance (MP) 0.792 (p < 0.001) 0.620 (p < 0.001) 0.697 (p < 0.001) 0.750 (p < 0.001) 0.801 (p < 0.001) (0.873) 4.357 0.780
Constructs Indicators Loading AVE CA CR VIF
pffiffiffiffiffiffiffiffiffiffi
AVE
Effects of
entrepreneurial
Entrepreneurial orientation EO1 0.866 0.794 0.935 0.951 4.23 0.891 orientation
EO2 0.877
EO3 0.919
EO4 0.898
EO5 0.893
Marketing capability MC1 0.861 0.739 0.882 0.919 3.16 0.860 1995
MC2 0.808
MC3 0.903
MC4 0.864
Innovation capability IC1 0.884 0.777 0.928 0.946 3.90 0.882
IC2 0.887
IC3 0.874
IC4 0.906
IC5 0.855
Marketing innovation MI1 0.790 0.712 0.898 0.925 3.62 0.854
MI2 0.878
MI3 0.835
MI4 0.874
MI5 0.838
Sustainable competitive advantage SCA1 0.856 0.780 0.929 0.947 4.65 0.883
SCA2 0.894
SCA3 0.869
SCA4 0.909
SCA5 0.886
Market performance MP1 0.805 0.762 0.895 0.928 3.53 0.873
MP2 0.869
MP3 0.914
MP4 0.901
Table 3.
Notes: AVE: average variance extracted; CA: Cronbach’s alpha; CR: composite reliability; and VIF: Measurement model
variance inflation factor statistics

No. Hypotheses b value t-value p-value Result

H1 Entrepreneurial orientation – Sustainable competitive advantage 0.31 5.769 0.000 Supported

H2 Marketing capability – Sustainable competitive advantage 0.18 3.357 0.000 Supported
H3 Innovation capability – Sustainable competitive advantage 0.20 5.145 0.000 Supported
H4 Marketing innovation – Sustainable competitive advantage 0.28 3.637 0.000 Supported
H5 Entrepreneurial orientation – Marketing capability 0.72 14.283 0.000 Supported
H6 Entrepreneurial orientation – Innovation capability 0.44 8.381 0.000 Supported
H7 Marketing capability – Innovation capability 0.45 8.599 0.000 Supported
H8 Sustainable competitive advantage – Market performance 0.84 16.912 0.000 Supported
H9 Entrepreneurial orientation – Market performance* 0.43 8.207 0.000 Supported
H10 Marketing capability – Market performance* 0.14 3.455 0.000 Supported
H11 Innovation capability – Market performance* 0.18 4.528 0.000 Supported
H12 Marketing innovation – Market performance* 0.15 3.801 0.000 Supported
EO–SCA–MP (Indirect effect = 0.143 and total effects = 0.573, large-effect size)
MC–SCA–MP (Indirect effect = 0.083 and total effects = 0.223, medium-effect size) Table 4.
IC–SCA–MP (Indirect effect = 0.129 and total effects = 0.309, medium-effect size)
MI–SCA–MP (Indirect effect = 0.092 and total effects = 0.242, medium-effect size)
Summary of
hypothesis testing
Note: *SCA is a partial mediator and effect size results
IJCHM According to the findings, it is revealed that EO has a large-size effect on MP and SCA.
35,6 Meanwhile, MC, IC and MI have a medium-size effect on MP. SCA is partially mediating EO,
MC, IC and MI associations on the one hand and MP on the other. Furthermore, EO is
influencing both MC and IC, while MC is predicting IC. The direct/indirect relationships tested
in the research model improve the understanding of factors determining MP (it explains 80% of
the variance in MP development). The findings support the assumptions of the resource-based
1996 approach, which claims that a travel agency’s SCA is derived from their controlled resources.
To boost corporate performance, managers should explore opportunities and inspire a creative
mentality to produce unique competitive ideas to stay ahead of their competitors. This finding
is similar to earlier examinations (Bambang et al., 2021; Kiyabo and Isaga, 2020; Widyanti and
Mahfudz, 2020) which found that the EO is significantly contributing to SCAs. Travel agencies
should innovatively use their resources to generate new innovative practices to stay
competitive. Furthermore, being entrepreneurially oriented, travel agencies can improve their
marketing and innovation capabilities and actively seek out new markets and customers. This
finding is supported by extant research (Bambang et al., 2021; Lee and Hsieh, 2010) which
found significant links between EO and MC; Makhloufi et al. (2021) and Lee and Hsieh (2010)
highlighted that EO is a primary source of business innovation capabilities.
Furthermore, the findings revealed a significant association between MC and SCA. This
means that trip planners and travel marketers keep up with the changing expectations of
tourists to sustain their competitive marketing advantages of products and services.
Innovative marketing should include creative analysis of market information, innovative
promotional strategies, technologies and extensive communications with the demand side to
improve their customer MP. This result is concurrent with Lee and Yoo (2021) and Bambang
et al. (2021), who validated the correlation among MC and SCA. Adding to that, MC is also
influencing IC. This means that adopting innovative MC is essential to improve firms’ IC.
Adopting innovative marketing and promotion will help satisfy demand-side needs.
Producing new services/products/operational procedures needs innovation capabilities to be
promoted and introduced. This result is supported by Lee and Hsieh (2010) and Potocan
(2013), who confirmed that MC is a significant driver of IC. Moreover, IC is positively
affecting SCA. It can help firms gain, support, keep and sustain their SCA by adopting
innovative technologies for managing market information, analysing market attitudes,
executing promotional activities and achieving innovative operational procedures to meet
customer needs in addition to achieving high-quality standards for customer service. This
finding is endorsed by Lee and Yoo (2021) and Anh and Thong (2020), who found significant
links between IC and SCA.

Entrepreneurial Marketing
Orientation β = 0.31 Innovation
P < 0.01
β = 0.72 β = 0.20
P < 0.01 P < 0.01
2 2
R = 0.52 R = 0.35 2
R = 0.80
β = 0.18 Sustainable β = 0.46
β = 0.44 Marketing Market
P < 0.01 Competitive P < 0.01
P < 0.01 Capability Male Performance
Advantage
Female
β = 0.45
P < 0.01
2
SCA: Partial mediation:
R = 0.69 β = 0.28 H9: EO-MP: β = 0.43, P < 0.01
Figure 2. H10: MC-MP: β = 0.14, P < 0.01
Innovation P < 0.01
H11: IC-MP: β = 0.18, P < 0.01
The structural model Capability H12: MI-MP: β = 0.15, P < 0.01
Nevertheless, the results revealed that there is a positive connection between MI and SCA. Effects of
This means that travel agencies using innovative promotional capabilities, innovative entrepreneurial
advertising and marketing tactics will improve their business SCA and MP. New and
enhanced product design, innovative promotion techniques and pricing structures are
orientation
significant contributors to SCA. This outcome is consistent with Hussain et al. (2020) and
Javanmard and Hasani (2017), who proved the connection of MI and SCA. Despite the
importance of SCA for improved MP (Hossain et al., 2021; Nashiruddin and Susanti, 2021),
the findings revealed the mediation of SCA among EO, MC, IC and MI and MP. SCA helps
1997
create added value to business MP in terms of customer satisfaction and loyalty concerns. It
is revealed that EO, MC, IC and MI are predicting MP directly and indirectly via SCA. The
added effect size of the indirect relationships via SCA is improving the explanatory power of
MP development. SCA, EO, MC, IC and MI help improve customer added value, business
performance, innovative products/services, service quality and reduced cost, which in turn
increase customer satisfaction and loyalty. This result is supported by Mahmood and
Hanafi (2013) who present that SCA is partially mediating the relationship between EO
and MP; Kamboj and Rahman (2017) who found that SCA is a partial mediator between
MC and MP; Widyanti and Mahfudz (2020) who found a partial mediation of SCA between
IC and MP; and Hussain et al. (2020) who revealed a partial mediation of SCA between MI
and MP. Broadly, the current study results contribute to understanding the drivers of
achieving SCA and improved MP in the travel agencies sector. Therefore, the outcomes of
this research will extend the current literature by delineating how EO, MC, IC and MI to help
tourism businesses to improve their SCA, MP and future survival and competitive positions.

7. Conclusion and implications

7.1 Conclusion
The current investigation aimed at measuring the direct/indirect impacts of EO, MC, IC and
MI on MP considering the mediating effect of SCA. It also measured the interactions
between EO, MC and IC in travel agencies. The findings revealed that:
(1) EO is largely influencing the MP of travel agencies.
(2) MC, IC and MI have a medium-sized effect on travel agencies’ MP.
(3) EO, MC, IC and MI are significantly predicting SCA and the MP of travel agencies.
(4) SCA is partially mediating EO, MC, IC – MI on the one side and MP on the other.
(5) Interactive causal relationships and mediations between EO and IC through MC
are revealed.

These findings improve the overall understanding of drivers and enablers of SCA and the
MP of travel agencies, the sector of the travel supply chain which tries significantly to
improve its competitive positions to support their future survival because of significant
changes in the online supply chain techniques and today’s customers’ needs.

7.2 Theoretical implications

Regarding the theoretical implications, the present investigation revealed a rigorous
cohesive model that integrates and measures the direct and indirect relationships among the
research model constructs. It tests 12 hypotheses that provided a powerful explanation of
SCA and the MP of travel agencies. It adds to the extant knowledge of SCA’s antecedents
and consequences in tourism and hospitality and the developing countries’ contexts. The
rigorous research model can be replicated in other sectors of tourism and hospitality (i.e.
IJCHM hotels, resorts, restaurants, tourism destinations, airports, events [. . .]. etc.) to further
35,6 generalise its results. The findings of the presented research model improve the overall
understanding of determinants of SCA and MP in tourism enterprises, with a particular
emphasis on travel agencies, the SMEs that need to carefully improve their competitive
advantages and MP to manage their survival in the travel supply chain that becomes highly
driven by technology and innovation. The present study provides evidence that travel
1998 agencies adopting EO, MC, IC and MI will be able to achieve and sustain competitive
advantage and high MP in terms of high customer satisfaction, retention and loyalty.
In addition, the study provided a research model that measures, directly and indirectly, the
relationships between EO, MC, IC, MI, SCA and MP. Understanding each direct and indirect
relationship will help improve the contribution of research variables to SCA and the MP
development in the tourism and hospitality sectors. In addition, this study fills the research gap
claimed by Makhloufi et al. (2021), Lee and Yoo (2021), Bambang et al. (2021) and Hussain et al.
(2020) of the urgent need to comprehensively investigate factors driving service businesses to
adopt EO, market and innovation capabilities and marketing innovation and how these
approaches drive managers’ attitudes toward achieving sustainable competitive positions and
high MP of their establishments. Knowing how the causal relationships between the research
constructs affect each other, directly and indirectly, will improve the overall understanding of the
determinants of SCA and MP in tourism. Moreover, researchers could extend the proposed
research model to expose worldwide proof of managers’ attitudes toward developing SCA and
MP in tourism and hospitality businesses.

7.3 Practical implications

This research offers numerous managerial implications for travel and service providers.
First, it offers tourism and hospitality businesses an opportunity to relook at their
development priorities to achieve SCA which is a main contributor to competitive business
performance. Findings invite tourism business managers to revisit their competitive
development strategies.
It is revealed that EO is a significant enabler of SCA. This reflects the need for business
managers to watch their market carefully and analyse its data to exploit opportunities for
expansion and competitiveness. They need to develop new practices for their services, products
or processes to stay ahead of their business peers. Watching technological changes in their
business and using innovative ideas seriously will grant their competitiveness and develop their
performance. Furthermore, integrating marketing information with modern technologies to meet
demand needs will keep their customers engaged and satisfied with their services and products.
Tourism and hospitality businesses need to use innovative unique strategies of marketing to
investigate the market desires and meet their customer expectations.
One source of uniqueness in business marketing, processes, service quality and innovation is
linked to modern technology adoption. Tourism businesses need to evaluate their technological
readiness, organisational culture and ability to generate and use innovative ideas and values.
Being ready to adopt modern technologies, having a skilful organisational structure and being
flexible to use innovative ideas, businesses will be eligible to be competitive in their target
markets. Marketing managers need to investigate their innovative tactics and technologies to
plan their marketing activities, create brand awareness, grow and maintain an innovation culture,
increase client value and enable collaborative marketing efforts within their mergers and
partners. Tourism, hospitality enterprises and service suppliers have to maintain EO and MI to
stay competitive and sustain their MP.
Furthermore, the findings indicate the importance of paying attention to how EO and MI
affect MP. MC also plays a key role in enhancing IC and SCA. On the other hand, EO and MI
may not be enough for businesses to achieve the desired results unless they are transformed Effects of
into diverse types of resource investments and, subsequently, into varied competencies. entrepreneurial
Consequently, to detect the latent value of EO and MI, managers should comprehend the
underlying marketing and managerial processes. Supervisors should identify the
orientation
comprehensive relationship between EO and MI by understanding the internal/external
processes and focusing their efforts on improving the key marketing and innovation
capabilities. Managers who work hard to align their companies’ IC with a changeable
technological environment should realise that careful control of MC to deal with
1999
environmental conditions is critical for achieving capability alignment, as well as allocating
sufficient fiscal resources and labour force to implement EO and MI in their marketing
practices. Specialists and professionals of MI need to conduct training programs for the
involved employees on how to efficiently use MI platforms for marketing objectives.
Furthermore, businesses that lack resources should consider using EO and MI to better
market their products. In conclusion, managers need to support their EO and MI readiness,
develop and sustain competitive advantage and high MP of their business.

7.4 Limitations and future research

Despite the previous contributions, the empirical findings of this study are limited to the
travel agency sector and need to be validated across sectors (i.e. hotels, restaurants, resorts,
event centres, airlines [. . .] etc.) and countries to reveal generalised concrete empirical
evidence. Additionally, the findings of this study express the perspective of travel agency
managers only (i.e. the supply side), and therefore, we encourage scholars to validate the
research model on customers to evaluate its explanation power of customer satisfaction and
loyalty (i.e. the demand side). A further limitation includes measuring SCA based on
managers’ knowledge and experience rather than following a longitudinal study. In
addition, MP was measured in the current study on a non-financially basis only (i.e.
customer satisfaction and loyalty); therefore, future research is encouraged to measure the
financial perspective of MP (sales and revenue growth). Further qualitative research is
called for to understand the adoption practices of EO, marketing and innovation capabilities
and MI across tourism and hospitality sectors.

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Corresponding author
Sayed Darwish Elgarhy can be contacted at: sd1118@fayoum.edu.eg

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