The effects of external and internal factors on competitive advantage—moderation of market dynamism and mediation of customer relationship building

Using a resource-based view and dynamic capabilities approach, this study investigates both the internal and external factors influencing competitive advantage in the hotel industry. For this purpose, we examine how organizational capabilities may lead to customer relationship building and in turn to competitive advantage. We further test the moderation role of market dynamism on the relationship between organizational capabilities and customer relationship building, and also investigate the mediation effect of customer relationship building on the association between organizational capabilities and competitive advantage. A questionnaire-based study was conducted among hotel employees in Northern Cyprus to test the conceptual model. A set of approaches was applied to detect common method bias and test the validity and reliability of the questionnaire. Correlation and regression analyses were conducted to evaluate the relationships between the variables, and bootstrapping analysis was applied to assess the mediation and moderation effects. The results revealed that organizational capabilities enhance customer relationship building and competitive advantage. Market dynamism as an external factor moderates the relationship between organizational capabilities and customer relationship building. There is also an indirect association between organizational capabilities and competitive advantage through the mediation of customer relationship building. The theoretical and practical implications of the findings are discussed.