A Study on Competitive Strategy and Vegetarian Restaurants’ Performance in Indonesia: Mediation and Psychological Impact of Loyalty of customers

Abstract

This study investigates the impact of loyalty of customers on the competitive strategy and performance of vegetarian restaurants in Indonesia. Loyalty of customers is one of the company’s unique assets. There is a demand from restaurant management to divert business strategy towards preserving and increasing loyalty of customers, which improves the restaurant’s performance. The method used to obtain primary data was distributing Likert-Scale questionnaires to vegetarian restaurants affiliated with IVS and VSI. Two hundred twenty-four respondents were involved in this study. SmartPLS 3.2.9 was used for data analysis using Path Analysis. The research results have shown a positive and significant effect of “innovation differentiation strategy, marketing differentiation strategy, and low-cost strategy on loyalty of customers towards vegetarian restaurants in Indonesia”. Loyalty of customers significantly positively impacts the operational performance of vegetarian restaurants in Indonesia. Loyalty of customers also mediates the effect of “innovation differentiation strategy, marketing differentiation strategy, and low-cost strategy” on company performance, respectively. The competitive strategy comprises innovation differentiation, marketing differentiation, and cost reduction strategies toward the operational performance of vegetarian restaurants in Indonesia.