Examining competitive priorities and competitive advantage in service organisations using Importance‐Performance Analysis matrix

Abstract

Purpose

This paper aims to examine the ten competitive dimensions of service in terms of relative importance and contribution to business performance, using the Importance‐Performance Analysis (IPA) matrix.

Design/methodology/approach

Empirical data for this study was drawn from 190 managers of Australian service organisations, with primary responsibilities related to day‐to‐day corporate operations. The targeted service organisations encompassed various sectors, including: transportation, communications, banking, insurance, health care, education, wholesale, retail, and professional services.

Findings

Based on the four quadrants of the IPA matrix, the results suggest that customer retention and productivity need to be maintained, while innovation and speed may receive a lower priority. Brand image and cost‐effectiveness fall into the areas which need improvement, while quality by conformance and delivery are identified as “potential overkillers”. Furthermore, this paper tests the difference between high‐ and low‐performing firms and shows that low‐performing firms generally place a similar level of importance on the ten competitive dimensions as high‐performing ones, yet are not successful in converting what is important into performance.

Research limitations/implications

This paper contributes to strategic management in service organisations by mapping the level of importance of the ten competitive dimensions of service against their effectiveness in improving business performance.

Practical implications

The findings could help firms identify the competitive dimensions within their organisation that are effectively‐resourced, under‐resourced, or over‐resourced and provide guidance for, “fighting the good fight”.

Originality/value

This paper contributes to knowledge by identifying the competitive priorities held by service firms and their effectiveness in improving business performance.

Citation

Prajogo, D.I. and McDermott, P. (2011), "Examining competitive priorities and competitive advantage in service organisations using Importance‐Performance Analysis matrix", Managing Service Quality: An International Journal, Vol. 21 No. 5, pp. 465-483. https://doi.org/10.1108/09604521111159780