The Influence of Service Innovation on Logistics Capability and Cost Advantage of Logistics Service Providers
Keywords:
Service Innovation, Logistics Capability, Cost Advantage, Logistics Service ProvidersAbstract
Logistics service providers in Thailand have an essential role in boosting the country's economy, serving as a supportive industry for a range of domestic and foreign businesses. Hence, the financial expenses associated with logistics service providers play a crucial role in business operations. Elevated operating expenses incurred by logistics companies might result in escalated costs for their clients, ultimately leading to increased expenses for end consumers. The aim of this study is to develop a causal model that links service innovation, logistics capability, and cost advantage. The purpose is to find the specific aspects that can assist logistics service providers in attaining more efficient cost advantages. The study employed questionnaires to collect data from a sample of 200 transportation and warehousing logistics service providers. Purposive sampling was applied for this research, and the data were analyzed using structural equation modeling.
The findings suggest that service innovation has a direct impact on both logistics capability and cost advantage, as well as an indirect impact on cost advantage through logistics capability. Hence, it is essential for service providers to cultivate their own unique service innovations and enhance their efficient logistics capabilities, as both elements can help to attain a cost advantage, ultimately resulting in enhanced business performance.
References
Akoğlu, N., Civelek, M. E., & Başaran, Y. (2022). The role of information Technology in the effect of Innovation capability on logistics service Quality. Journal of Business Research – Turk, 14(1), 249-265. https://doi.org/10.20491/isarder.2022.1378
Anning-Dorson, T. (2018). Customer involvement capability and service firm performance: The mediating role of innovation. Journal of Business Research, 86, 269–280. https://doi.org/10.1016/j.jbusres.2017.07.015
Bagozzi, R. P., & Yi, Y. (1988). On the evaluation of structural equation models. Journal of the Academy of Marketing Science, 16(1), 74–94. https://doi.org/10.1007/bf02723327
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108
Besanko, D., Dranove, D., Shanley, M., & Schaefer, S. (2013). Economics of strategy (6th ed.). John Wiley & Sons.
Busse, C., & Wallenburg, C. M. (2011). Innovation management of logistics service providers. International Journal of Physical Distribution & Logistics Management, 41(2), 187–218. https://doi.org/10.1108/09600031111118558
Byrne, B. M. (2016). Structural equation modeling with AMOS: Basic concepts, applications, and programming (3rd ed.). Routledge.
Cho, J. J., Ozment, J., & Sink, H. (2008). Logistics capability, logistics outsourcing and firm performance in an e‐commerce market. International Journal of Physical Distribution & Logistics Management, 38(5), 336–359. https://doi.org/10.1108/09600030810882825
Chuang, S., Liao, C., & Lin, S. (2013). Determinants of knowledge management with information technology support impact on firm performance. Information Technology and Management, 14(3), 217–230. https://doi.org/10.1007/s10799-013-0153-1
Dai, J., Xiao, H., & Cui, T. (2012). Logistics Capability and Performance of Container Ports: An Empirical research basing on SEM. In Springer eBooks (pp. 389–400). https://doi.org/10.1007/978-3-642-33012-4_39
Department of Business Development. (2022). DBD Data warehouse. https://datawarehouse.dbd.go.th/business/52291?type=business
Deng, Q., & Noorliza, K. (2023). Integration, resilience, and innovation capability enhance LSPs’ operational performance. Sustainability, 15(2), 1019. https://doi.org/10.3390/su15021019
Dion, P. A. (2008). Interpreting Structural equation Modeling Results: A reply to Martin and Cullen. Journal of Business Ethics, 83(3), 365–368. https://doi.org/10.1007/s10551-007-9634-7
Evangelista, P., McKinnon, A., & Sweeney, E. (2013). Technology adoption in small and medium‐sized logistics providers. Industrial Management & Data Systems, 113(7), 967–989. https://doi.org/10.1108/imds-10-2012-0374
Fischer, T., Gebauer, H., Gregory, M., Ren, G. & Fleisch, E. (2010). Exploitation or exploration in service business development? Insights from a dynamic capabilities perspective. Journal of Service Management, 21(5), 591-624. https://doi.org/10.1108/09564231011079066
Fornell, C., & Larcker, D. F. (1981). Evaluating Structural Equation Models with Unobservable Variables and Measurement Error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.1177/002224378101800104
Gallouj, F. (2002). Innovation in services and the attendant old and new myths. The Journal of Socio-Economics, 31(2), 137–154. https://doi.org/10.1016/s1053-5357(01)00126-3
Geng, Y. (2017). The impact of service innovation capability on logistics platform performance. DEStech Transactions on Economics Business and Management, emem. https://doi.org/10.12783/dtem/emem2017/17098
Gligor, D. M., & Holcomb, M. C. (2012). Understanding the role of logistics capabilities in achieving supply chain agility: a systematic literature review. Supply Chain Management an International Journal, 17(4), 438–453. https://doi.org/10.1108/13598541211246594
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis (7th ed.). Prentice Hall.
Hair, J. F., Anderson, R., Black, W. C., Babin, B., Hair, J., & Babin, B. J. (2009). Multivariate data analysis. Pearson.
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017). A primer on partial least squares structural equation modeling (PLS-SEM) (2nd ed.). Sage.
Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. https://doi.org/10.1007/s11747-014-0403-8
Hooper, D., Coughlan, J., & Mullen, M. R. (2008). Structural Equation Modelling: Guidelines for determining model fit. The Electronic Journal of Business Research Methods, 6(1). https://doi.org/10.21427/d7cf7r
Hsieh, J., Chiu, H., Wei, C., Yen, H. R., & Cheng, Y. (2013). A practical perspective on the classification of service innovations. Journal of Services Marketing, 27(5), 371–384. https://doi.org/10.1108/jsm-10-2011-0159
Hu, L., & Bentler, P. M. (2009). Cut-off criteria for fit indices in co-variance structure analysis: Conventional criteria vs. new alternatives. Structural Equation Modeling: A Multidisciplinary Journal , 6(1), 1 – 55. https://doi.org/10.1080/10705519909540118
Karia, N. (2011). Resource-based logistics and logistics performance (Thesis). Business School: The University of Hull.
Karia, N., & Wong, C. Y. (2013). The impact of logistics resources on the performance of Malaysian logistics service providers. Production Planning & Control, 24(7), 589–606. https://doi.org/10.1080/09537287.2012.659871
Karia, N. (2018). Knowledge resources, technology resources and competitive advantage of logistics service providers. Knowledge Management Research & Practice, 16(4), 451–463. https://doi.org/10.1080/14778238.2018.1521541
Kindström, D., & Kowalkowski, C. (2014). Service innovation in product-centric firms: a multidimensional business model perspective. Journal of Business and Industrial Marketing, 29(2), 96–111. https://doi.org/10.1108/jbim-08-2013-0165
Lin, Y., & Chen, Y. (2016). Determinants of green competitive advantage: the roles of green knowledge sharing, green dynamic capabilities, and green service innovation. Quality & Quantity, 51(4), 1663–1685. https://doi.org/10.1007/s11135-016-0358-6
Liu, F., & Huang, T. (2018). The influence of collaborative competence and service innovation on manufacturers’ competitive advantage. Journal of Business and Industrial Marketing, 33(4), 466–477. https://doi.org/10.1108/jbim-12-2016-0294
Lu, C., & Yang, C. (2009). Logistics service capabilities and firm performance of international distribution center operators. Service Industries Journal, 30(2), 281–298. https://doi.org/10.1080/02642060802123392
Manohar, S., Mittal, A., & Marwah, S. (2020). Service innovation, corporate reputation and word-of-mouth in the banking sector. Benchmarking an International Journal, 27(1), 406–429. https://doi.org/10.1108/bij-05-2019-0217
Meathawiroon, C., & Kliangsa-Art, S. (2023). The role of green advertising on green brand love, green perceived value, and green purchase intention in the hotel industry. Thammasat Review, 26(2), 297-321. DOI: 10.14456/tureview.2023.22
Mentzer, J. T., Min, S., & Bobbitt, L. M. (2004). Toward a unified theory of logistics. International Journal of Physical Distribution & Logistics Management, 34(8), 606–627. https://doi.org/10.1108/09600030410557758
Molina-Azorín, J. F., Tarí, J. J., Pereira-Moliner, J., López-Gamero, M. D., & Pertusa-Ortega, E. M. (2015). The effects of quality and environmental management on competitive advantage: A mixed methods study in the hotel industry. Tourism Management, 50, 41–54. https://doi.org/10.1016/j.tourman.2015.01.008
Morash, E. A., Droge, C. L. M., & Vickery, S. K. (1996). Strategic logistics capabilities for competitive advantage and firm success. Journal of Business Logistics, 17(1), 1-22. https://trid.trb.org/view.aspx?id=560386
Newbert, S. L. (2008). Value, rareness, competitive advantage, and performance: a conceptual‐level empirical investigation of the resource‐based view of the firm. Strategic Management Journal, 29(7), 745–768. https://doi.org/10.1002/smj.686
Nunnally, J. C., & Bernstein, I. H. (1994). Psychometric theory (3rd ed.). McGraw-Hill.
Office of the National Economic and Social Development Board . (2020). Thailand's Logistics Report 2020. https://shorturl.asia/zDdqU
Olavarrieta, S., & Ellinger, A. E. (1997). Resource‐based theory and strategic logistics research. International Journal of Physical Distribution & Logistics Management, 27(9/10), 559–587. https://doi.org/10.1108/09600039710188594
Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. Free Press.
Richey, R. G., Daugherty, P. J., & Roath, A. S. (2007). Firm technological readiness and complementarity: capabilities impacting logistics service competency and performance. Journal of Business Logistics, 28(1), 195-229. https://doi.org/10.1002/j.2158-1592.2007.tb00237.x
Sumantri, Y. (2020). Drivers of logistics service innovation in Third Party Logistics business. IOP Conference Series Materials Science and Engineering, 732(1), 012068. https://doi.org/10.1088/1757-899x/732/1/012068
Tabachnick, B. G., & Fidell, L. S. (2013). Using multivariate statistics (6th ed.). Pearson.
Wang, M. (2016). The role of innovation capability in the Australian courier industry. International Journal of Innovation Management, 20(7), 1650070. https://doi.org/10.1142/s1363919616500705
Wang, C., Day, J., & Farid, M. (2019). Service Innovation model of the automobile service industry. Applied Sciences, 9(12), 2403. https://doi.org/10.3390/app9122403
Wen, Y. (2012). Impact of collaborative transportation management on logistics capability and competitive advantage for the carrier. Transportation Journal, 51(4), 452–473. https://doi.org/10.5325/transportationj.51.4.0452
Wernerfelt, B. (1984). A resource‐based view of the firm. Strategic Management Journal, 5(2), 171–180. https://doi.org/10.1002/smj.4250050207
Witell, L., Snyder, H., Gustafsson, A., Fombelle, P., & Kristensson, P. (2016). Defining service innovation: A review and synthesis. Journal of Business Research, 69(8), 2863–2872. https://doi.org/10.1016/j.jbusres.2015.12.055
Yang, C., Marlow, P. B., & Lu, C. (2009). Assessing resources, logistics service capabilities, innovation capabilities and the performance of container shipping services in Taiwan. International Journal of Production Economics, 122(1), 4–20. https://doi.org/10.1016/j.ijpe.2009.03.016
Yang, C., Lu, C., Haider, J. J., & Marlow, P. B. (2013). The effect of green supply chain management on green performance and firm competitiveness in the context of container shipping in Taiwan. Transportation Research Part E Logistics and Transportation Review, 55, 55–73. https://doi.org/10.1016/j.tre.2013.03.005
Ye, L., Wang, Y., & Chen, J. (2016). Research on the Intelligent Warehouse Management System based on near field communication (NFC) technology. International Journal of Advanced Pervasive and Ubiquitous Computing, 8(2), 38–55. https://doi.org/10.4018/ijapuc.2016040103
Yen, H. R., Wang, W., Wei, C., Hsu, S. H., & Chiu, H. (2012). Service innovation readiness: Dimensions and performance outcome. Decision Support Systems, 53(4), 813–824. https://doi.org/10.1016/j.dss.2012.05.015
Zawawi, N. F. B. M., Wahab, S. A., Mamun, A. A., Ahmad, G. B., & Fazal, S. A. (2017). Logistics Capability, Information Technology, and Innovation Capability of Logistics Service Providers: Empirical Evidence from East Coast Malaysia. International Review of Management and Marketing, 7(1), 326–336. http://umkeprints.umk.edu.my/8105/
Zhao, M., Droge, C., & Stank, T. P. (2001). The effects of logistics capabilities on firm performance: Customer focused versus information-focused capabilities. Journal of Business Logistics, 22(2), 91-107. https://doi.org/10.1002/j.2158-1592.2001.tb00005.x
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Thammasat Review
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
The opinions and ideas expressed in all submissions published in Thammasat Review are solely that of the author(s) and do not necessarily reflect that of the editors or the editorial board.
The copyright of all articles including all written content and illustrations belong to Thammasat Review. Any individuals or organisation wishing to publish, reproduce and distribute a particular manuscript must seek permission from the journal first.
