Performance of restaurants: Recognizing competitive intensity and differentiation strategies

Purpose: The purpose of this paper was to examine the relationships between differentiation strategies, competitive intensity and restaurant performance. It was also to estimate the effect of interaction terms of differentiation strategies and competitive intensity on restaurant performance.

Methods: Data were obtained from 160 restaurant operators in the Ashanti region of Ghana through a structured questionnaire. The paths of the relationships were estimated and tested using regression analysis.

Results: The findings suggest that differentiation strategies have a significant impact on restaurant performance and that competitive intensity partially influence the performance of restaurants. Competitive intensity was, however, found not to moderate the relationship between differentiation strategies and restaurant performance.

Implications: The study findings will greatly help managers of the restaurant industry to appreciate the critical contribution of competitive intensity and differentiation strategies in estimating the performance of restaurants. The interactive terms of differentiation strategies and competitive intensity add to the divergent ways of measuring restaurant performance. This paper, therefore, contributes to the growing research in the restaurant industry.