Analyzing the Effects of Corporate Reputation on the Competitiveness of Telecommunication Industry Using the Structural Equation Modelling
Journal of Statistical Modeling and Analytics
Vol.2 No.2, 29-42, 2011
Analyzing the Effects of Corporate Reputation on the Competitiveness of Telecommunication Industry using the Structural Equation Modelling: The Case of Kelantan
1
Zainudin Awang1 Faculty of Computer and Mathematical Sciences UiTM Kelantan E-mail: zainudin888@kelantan.uitm.edu.my
ABSTRACT The competition for customers among telecommunication firms in Malaysia is fierce. The competition is not only limited to new customers but also to the existing customer base. In this fiercely competitive environment, customers are highly exposed to offers and counter offers from the competing firms. At the same time various persuasive messages are delivered to encourage customers to switch their service provider. Perhaps the corporate reputation of a firm could provide certain competitive edge which could help the growth and survival of a firm into the future amid the highly competitive environment. This study attempts to assess the influence of corporate reputation of the firms on their competitive advantage in the market from the customers’ perspective. The study sampled 1000 individual customers in Kelantan who have been using the mobile service at a minimum of three years. The selected respondents have been experiencing the service provided by more than one telecommunication operators. The data were collected using self-administered questionnaires and analyzed using Structural Equation Modeling (SEM) in AMOS 16.0. The study found that the direct impact of firms’ corporate reputation on their competitive advantage is not significant at α = 0.05. Instead, the impact of corporate reputation on competitive advantage is indirectly through perceived value and perceived quality of the service. In other words, the firms should communicate their favorable corporate reputation effectively to the market so that the customers’ perception level towards their products and service would arise. In other words,
Vol.2 No.2, 29-42, 2011
Analyzing the Effects of Corporate Reputation on the Competitiveness of Telecommunication Industry using the Structural Equation Modelling: The Case of Kelantan
1
Zainudin Awang1 Faculty of Computer and Mathematical Sciences UiTM Kelantan E-mail: zainudin888@kelantan.uitm.edu.my
ABSTRACT The competition for customers among telecommunication firms in Malaysia is fierce. The competition is not only limited to new customers but also to the existing customer base. In this fiercely competitive environment, customers are highly exposed to offers and counter offers from the competing firms. At the same time various persuasive messages are delivered to encourage customers to switch their service provider. Perhaps the corporate reputation of a firm could provide certain competitive edge which could help the growth and survival of a firm into the future amid the highly competitive environment. This study attempts to assess the influence of corporate reputation of the firms on their competitive advantage in the market from the customers’ perspective. The study sampled 1000 individual customers in Kelantan who have been using the mobile service at a minimum of three years. The selected respondents have been experiencing the service provided by more than one telecommunication operators. The data were collected using self-administered questionnaires and analyzed using Structural Equation Modeling (SEM) in AMOS 16.0. The study found that the direct impact of firms’ corporate reputation on their competitive advantage is not significant at α = 0.05. Instead, the impact of corporate reputation on competitive advantage is indirectly through perceived value and perceived quality of the service. In other words, the firms should communicate their favorable corporate reputation effectively to the market so that the customers’ perception level towards their products and service would arise. In other words,