바로가기메뉴

본문 바로가기 주메뉴 바로가기

logo

ISSN : 1738-3110

Article Contents

Next
Early Access e-Submission

Vol.17 No.3
Citation Share

Building a Sustainable Competitive Advantage for Multi-Level Marketing (MLM) Firms: An Empirical Investigation of Contributing Factors

The Journal of Distribution Science / The Journal of Distribution Science, (P)1738-3110; (E)2093-7717
2019, v.17 no.3, pp.5-19
https://doi.org/https://doi.org/10.15722/jds.17.3.201903.5
Keong, Lee Siew
Dastane, Omkar
Keong,, L. S. , & Dastane,, O. (2019). Building a Sustainable Competitive Advantage for Multi-Level Marketing (MLM) Firms: An Empirical Investigation of Contributing Factors. The Journal of Distribution Science, 17(3), 5-19, https://doi.org/https://doi.org/10.15722/jds.17.3.201903.5
  • Downloaded
  • Viewed
PDF Download

Abstract

Purpose - The purpose of this research is to investigate the factors contributing to sustainable competitive advantage for multi-level marketing (MLM) firms in Malaysia. The selected variables in this study are company image, product innovation, leadership, distributor rewards system and distributor training system. Research design, data, and methodology - Quantitative research method is employed with collected sample size of 398 respondents using judgmental sampling technique. Normality and reliability test were performed in the first stage utilizing SPSS 22 and Confirmatory Factory Analysis (CFA) and variance analysis were obtained in the subsequent stage, following up with the overall fit of the measurement model, Structural Equation Model (SEM) using AMOS 22 with maximum likelihood estimation to assess the internal consistency, convergent validity and discriminant validity. Results - The research findings show that company image, leadership, distributor rewards system and distributor training system were supported and are factors affecting the sustainable competitive advantage of MLM companies in Malaysia. However, in this study, product innovation was not supported but this result does not depict that it is trivial and inconsequential in maintain sustainable advantage. Conclusion - Companies can build sustainable competitive advantage by focusing on these contributing factors. Several other comments and implications were brought to light and discussed in the paper.

keywords
Company Image, Distributors Rewards System, Distributors Training System, Product Innovation, Leadership, Multi-Level Marketing, Sustainable Competitive Advantage

Reference

1.

Anderson, J. C., & Gerbing, D. W. (1988). Structural Equation Modeling in Practice: A Review and Recommended Two-Step Approach. Psychological Bulletin, 103(3), 411-423. https://doi.org/10.1037/0033-2909.103.3.411

2.

Barney, J. (1991). 1991 Firm Resources and Sustained Competitve Advantage. Journal Of Management, 17, 99-120. https://doi.org/10.1093/icesjms/fss178

3.

Barney, J., Wright, M., & Ketchen, D. J. (2001). The resource-based view of the firm: Ten years after 1991. Journal of Management, 27(6), 625–641. https://doi.org/10.1016/S0149-2063(01)00114-3

4.

Anderson, J. C., & Gerbing, D. W. (1988). Structural Equation Modeling in Practice: A Review and Recommended Two-Step Approach. Psychological Bulletin. 103(3), 411-423. https://doi.org/10.1037/0033-2909.103.3.411

5.

Barney, J., Wright, M., & Ketchen, D. J. (2001). The resource-based view of the firm: Ten years after 1991. Journal of Managemen, 27(6), 625-641. https://doi.org/10.1016/S0149-2063(01)00114-3

6.

Blozis, S. A., & Cudeck, R. (1999). Conditionally Linear Mixed-Effects Models With Latent Variable Covariates. Journal of Educational and Behavioral Statistics, 24(3), 245-270. https://doi.org/10.3102/10769986024003245

7.

Borg, S. W., & Young, L. (2014). Continuing the evolution of the selling process: A multi-level perspective. Industrial Marketing Management, 43(4), 543-552. https://doi.org/10.1016/j.indmarman.2014.02.013

8.

Brem, A., Maier, M., & Wimschneider, C. (2016). Competitive advantage through innovation: the case of Nespresso. European Journal of Innovation Management. 19(1), 133-148. https://doi.org/10.1108/EJIM-05-2014-0055

9.

Crittenden, W. F., Crittenden, V. L., & Pierpont, A. (2015). Trade secrets: Managerial guidance for competitive advantage. Business Horizons, 58(6) 607-613. https://doi.org/10.1016/j.bushor.2015.06.004

10.

Feldman, P. M., Bahamonde, R. A., & Velasquez Bellido, I. (2014). A new approach for measuring corporate reputation. Revista de Administração de Empresas, 54(1) 53-66. https://doi.org/10.1590/S0034-759020140102

11.

Finch, D. J., Peacock, M., Levallet, N., & Foster, W. (2016). A dynamic capabilities view of employability:Exploring the drivers of competitive advantage for university graduates. Education and Training, 58(1) 61-81. https://doi.org/10.1108/ET-02-2015-0013

12.

Fraering, M., & Minor, M. S. (2013). Beyond loyalty:Customer satisfaction, loyalty, and fortitude. Journal of Services Marketing, 27(4), 334-344. https://doi.org/10.1108/08876041311330807

13.

Gebauer, H., Gustafsson, A., & Witell, L. (2011). Competitive advantage through service differentiation by manufacturing companies. Journal of Business Research, 64(12), 1270-1280. https://doi.org/10.1016/j.jbusres.2011.01.015

14.

Ghemawat, P. (1986). Sustainable advantage. Harvard Business Review, 64, 53–58. https://doi.org/10.1002/smj.1985

15.

Gliem, R. R., & Gliem, J. A. (2003). Calculating, Interpreting, and Reporting Cronbach’s Alpha Reliability Coefficient for Likert-type Scales. In Midwest Research-to-Practice Conference in Adult, Continuing, and Community Education. https://doi.org/10.1109/PROC.1975.9792

16.

Guo, X., Duff, A., & Hair, M. (2008). Service quality measurement in the Chinese corporate banking market. International Journal of Bank Marketing, 26(5), 305-327. https://doi.org/10.1108/02652320810894389

17.

Hafeez, K., Zhang, Y. B., & Malak, N. (2002). Determining key capabilities of a firm using analytic hierarchy process. International Journal of Production Economics, 76(1), 39-51https://doi.org/10.1016/S0925-5273(01)00141-4

18.

Hair, J. F., Celsi, M., Money, A., Samouel, P., & Page, M. (2015). The essentials of business research methods: Third Edition. The Essentials of Business Research Methods: Third Edition. https://doi.org/10.4324/9781315716862

19.

Hamel, G., & Prahalad, C. K. (1991). Corporate imagination and expeditionary marketing. Harvard Business Review. https://doi.org/Article

20.

Hitt, M. A., Hoskisson, R. E., & Ireland, R. D. (1990). Mergers and Acquisitions and Managerial Commitment to Innovation in M-Form Firms. Strategic Management Journal, 11, 29-47.

21.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2013). Strategic Management: Competitiveness and Globalization. IEEE Transactions on Information Theory. https://doi.org/10.1017/CBO9781107415324.004

22.

Hsieh, Y. H., & Chen, H. M. (2011). Strategic fit among business competitive strategy, human resource strategy, and reward system. Academy of Strategic Management Journal, 10(2), 11-32. https://doi.org/10.1016/j.matdes.2013.06.030

23.

Humphrey, A. S. (2005). SWOT Analysis for Management Consulting. SRI Alumni Association Newsletter.

24.

Ireland, R. D., & Hitt, M. A. (2005). Achieving and maintaining strategic competitiveness in the 21st century: The role of strategic leadership. Academy of Management Perspectives, 19(4), 63-77. https://doi.org/10.5465/ame.2005.19417908

25.

Keep, W. W., & Nat, P. J. V. (2014). Multilevel marketing and pyramid schemes in the United States: An historical analysis. Journal of Historical Research in Marketing, 6(2), 188 - 210. https://doi.org/10.1108/JHRM-01-2014-0002

26.

Khandekar, A., & Sharma, A. (2005). Managing human resource capabilities for sustainable competitive advantage: An empirical analysis from Indian global organisations. Education and Training, 47(8/9), 628-639. https://doi.org/10.1108/00400910510633161

27.

Kurucz, E. C., Colbert, B. A., Lüdeke-Freund, F., Upward, A., & Willard, B. (2016). Relational leadership for strategic sustainability: Practices and capabilities to advance the design and assessment of sustainable business models. Journal of Cleaner Production, (Special Issue: Systematic Leadership Towards Sustainability), doi:10.1016/j.jclepro.2016.03.087

28.

Liu, Y. (2013). Sustainable competitive advantage in turbulent business environments. International Journal of Production Research, 51(10), 2821-2841 https://doi.org/10.1080/00207543.2012.720392

29.

MacCallum, R. C., Browne, M. W., & Sugawara, H. M. (1996). Power analysis and determination of sample size for covariance structure modeling. Psychological Methods. 1(2), 130-149. https://doi.org/10.1037/1082-989X.1.2.130

30.

Melewar, T. C. (2003). Determinants of the corporate identity construct: A review of the literature. Journal of Marketing Communications., 9(4), 195-220. https://doi.org/10.1080/1352726032000119161

31.

Oppenheim, J., Bonini, S., Bielak, D., Kehm, T., & Lacy, P. (2007). Shaping the New Rules of Competition : UN Global Compact Participant Mirror. Africa.

32.

Peterson, R. A., & Kim, Y. (2013). On the relationship between coefficient alpha and composite reliability. Journal of Applied Psychology, 98(1), 194-198. https://doi.org/10.1037/a0030767

33.

Pfeffer, J. (1994). Competitive Advantage Through People. California Management Review, 36(2), 9-28. https://doi.org/10.2307/41165742

34.

Porter, M. E. (1979). Porter 1979 HBR How Competitive Forces Shape Srategy.pdf. Harvard Business Review. https://doi.org/10.1016/j.jss.2016.05.042

35.

Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard Business Review. https://doi.org/Article

36.

Rackwitz, R. (2001). Reliability analysis-a review and some perspective. Structural Safety. 23(4), 365-395. https://doi.org/10.1016/S0167-4730(02)00009-7

37.

Ray, G., Barney, J. B., & Muhanna, W. A. (2004). Capabilities, business processes, and competitive advantage: Choosing the dependent variable in empirical tests of the resource-based view. Strategic Management Journal, 25(1), 23-37. https://doi.org/10.1002/smj.366

38.

Rowland, C., & Hall, R. (2014). Management learning, performance and reward: Theory and practice revisited. Journal of Management Development, 33(4), 342-356. https://doi.org/10.1108/JMD-08-2012-0110

39.

Srivastava, M., Franklin, A., & Martinette, L. (2013). Building a sustainable competitive advantage. Journal of Technology Management and Innovation, 8(2), 47-60. https://doi.org/10.4067/S0718-27242013000200004

40.

Strickland, T. Y. (2012). Planeación Estratégica En Las Empresas. Revista de Historia Industrial, XII(81), 4-19.

41.

Swarnalatha, C., & Prasanna, T. S. (2013). Leveraging employee engagement for competitive advantage: HR’s strategic role. In Proceedings of 3rd National Conference on Human Resource Management, NCHRM 2013. https://doi.org/10.1109/HICSS.2007.324

42.

Trochim, W. M.. (2006). Types of Questions. Research Methods Knowledge Base.

43.

Urbancová, H., &, & Linhartová, L. (2011). Staff Turnover as a Possible Threat to Knowledge Loss. Journal of Competitiveness, 3, 84-98.

44.

Wernerfelt, B. (1984). The resource-based view of the firm. Strategic Management Journal, 5(2), 171-180. https://doi.org/10.1002/smj.4250050207

45.

Wernerfelt, B. (2013). Small forces and large firms:Foundations of the RBV. Strategic Management Journal, 34(6), 635-643. https://doi.org/10.1002/smj.2043

46.

Yelkur, R., & Herbig, P. (1996). Global markets and the new product development process. Journal of Product & Brand Management, 5(6), 38-47. https://doi.org/10.1108/10610429610152822

47.

Yukl, G. (2009). Leadership in Organizations. Prentice Hall, the University of Michigan

48.

WFDSA. (2011). Global direct selling - 2011 Retails Sales. Washington, DC, USA.

The Journal of Distribution Science

Early Access e-Submission OA Policy