Assessing the Mediating Effect of Competitive Advantages in the Relationship between Marketing Strategy and Firm Performance of the Ethiopian Textile Manufacturing Industry Effect of Competitive Advantages in the Relationship between Marketing Strategy and Firm Performance of the Ethiopian Textile Manufacturing Industry

Abstract

The study assessed the mediating effect of competitive advantages in the relationship between
marketing strategy and firm performance. Specifically, the study aimed to investigate the indirect
effect of marketing strategy to firm performance through competitive advantage. An explanatory
research design was employed to assess the causal relationship between the independent
variable, mediating variable, and dependent variable. both probability and nonprobability
sampling techniques were used to select the proper respondents from the target populations. IBM
SPSS Amos Version 25 software was used to analyze the data. The structural equation model
(SEM) was used to analyze the mediating effect of competitive advantages in the relationship
between marketing strategy and firm performance. The finding of the study revealed that the
indirect effect of marketing strategy on firm performance was positive and significant (b=1.551,
t= 4.65, P < 0.001). Furthermore, the direct effect of marketing strategy on firms’ performance
in the presence of a mediator was also found significant (b=0.460, P < 0.001). Hence
competitive advantage partially mediated the relationship between marketing strategy and firm
performance. Therefore, giving emphasis to marketing strategy and competitive advantage
promptly improves the firm performance