POLISH JOURNAL OF MANAGEMENT STUDIES 2020

Amer R.S., Abdulwahhab F.L. Vol.21 No.1

ACHIEVING THE COMPETITIVE ADVANTAGE BY USING

CUSTOMER RELATIONSHIPS MANAGEMENT (CRM)
Amer R.S., Abdulwahhab F.L.
Abstract: The aim associated with this article is to examine the impacts of customer
satisfaction and customer value on the competitive advantage strategies such as cost
leadership strategy, differentiation strategy, and concentration strategy. This study used the
questionnaire method to collect the data while PLS-SEM was used to test the hypotheses.
This study found that customer satisfaction and customer value have a significant positive
association with competitive advantage strategies such as cost leadership strategy,
differentiation strategy, and concentration strategy. These results show that the increased
interest in removing Customer Relationships Management (CRM) will increase the
competitive advantage in telecommunications companies.
Key words: competitive advantage, customer relationships management,
telecommunications companies.
DOI: 10.17512/pjms.2020.21.1.05
Article history:
Received January 13, 2020; Revised March 25, 2020; Accepted April 12, 2020

Introduction
The main benefits of CRM are that the organization can distinguish itself from
other competitors by fast-moving to customers and providing super serves,
regarding that, CRM dimensions have come forward to contain the customer
satisfaction (CSA), which represents the personal feeling generated by the
customer with joy and pleasure when he/she see that the goods or service
correspond to his/her hopes. The second dimension included the customer value,
who represents the situation in which the benefit to the patient is greater than the
sacrifices he has made. While the competitive advantage that is one of the survival
features of competing organizations in fast-responding markets is that the
customer's uniqueness and excellence have become an essential characteristic of
achieving excellence through the ability of an organization to perform in a single
way or identify methods that are not competitors can pursue or reach it, the
organization use of its internal strengths of financial resources and human
capabilities that possess the advantages of its rare skills is one of the necessary
signs of competitive advantage, as well as organizations, have not stood at this
point, it has worked hard to divide the market into parts to achieve response to the
variable needs of customers. The competitive advantage based on creativity,


Raheem Sharrad Amer Dr., Fadiyya Lutfi Abdulwahhab Dr., Al-Mustansiriyah
University/ College of Administration & Economics
 corresponding author: [email protected];
 [email protected]

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innovation, and trust of trade-mark is characterized by a secure and viable rate than
that based on cost reduction, and offering prices are not high for customers.
The current study highlights the following questions:
1. What is the level of CRM application in telecommunications Companies used in
this study?
2. How interested are telecommunications companies that studied in this study to
achieve a competitive advantage?
3- What kind of relationship between the application of CRM and the achievement
of competitive advantage in the Telecommunications Companies with the topic of
this study?
Increasing the awareness of Telecommunications Companies about the importance
of applying CRM, especially in increasing competition, and as a step in
strengthening the endeavour of Telecommunications Companies in providing
communication services in accordance with the needs and expectations of
customers as a competitive basis.
This study aims at:
1- Analyzing the impact of CRM variables on competitive advantage variables in
the Telecommunications Companies in this study.
2- To reach a set of conclusions and recommendations that are in the interest of
telecommunications companies by applying the philosophy of managing the
relationship with the customer.

Literature review
Customer Relations Management is defined as "developing and maintaining long-
term relationships with strategically important customers”. Hussain, Mosa, and
Omran (2017) stated that CRM is “a functional process to achieve a continuous
dialogue with customers and communicate with them across all access points, to
increase the personality of the most valuable customers and retain them and
increase the effectiveness of marketing initiatives”.
Agnihotri, Dingus, Hu, and Krush (2016) defined CSAT as “The ability of an
organization to attract and retain customers, and improve customer relations over
time, Moreover, the customer is the key to long-term success and competitiveness
and that knowing customer satisfaction is a source of customer expectations, and
informed source to earn their retention and a source of study of organizational
efficiency to provide goods and services, and can The organization decides on the
actions required to meet the needs of customers”. Methods of measuring customer
satisfaction can be identified according to the opinions of the researchers who
addressed this topic.
Zhang, Guo, Hu, and Liu (2017) stated that the value of the customer " is the
equivalent of cash at present that the customer can pay for the benefits of future
cash flow ." Hence the value of the customer can be divided into - a - building the
value of the customer b - the value of the customer's life.

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Payne, Frow, and Eggert (2017) observed that there are three ways to build a
customer’s value:
1- Building customer value through packaging and labelling.
2- Building the customer's value through sales representatives: Sales relationships.
3- Building customer value, relationship, and expertise in the field of fast markets.
The value of a customer's life is defined as “the current value of future cash flows
describing the customer of the relationship " (Nawaz, Afzal, & Shehzadi, 2013).
McColl-Kennedy, Hogan, Witell, and Snyder (2017) indicated that customer's
lifetime value is defined as the customer's value determined by the assessment of
the amount of all purchases as well as the projection of future purchases minus the
customer's marketing costs. The customer values have a more significant influence
on the selection of competitive strategies in the organization (Myšková & Hájek,
2019).
The concept of competitive advantage as it is in many contemporary management
concepts has given him a lot of definitions, Kumar and Pansari (2016) defined the
competitive advantage is defined as " the ability of the organization to perform in a
single style or to identify methods that competitors cannot follow in Present or
future " as well as known the competitive advantage as " the organization exploits
its internal strengths in the performance of its activities so that it creates value that
the rest of the competitors cannot achieve in their performance of their activities ".
McLean and McGovern (2017) defined the Costing Leadership Strategy" as a
competitive low-cost strategy that targets the mass and large or wide market and
requires the establishment of activities for efficient facilities, and an active effort to
reduce cost through experience”. Goddard and Simm (2017) stated that Costing
Leadership Strategy as "a complete set of procedures designed to produce or
deliver goods relative to the low cost of competitors with properties that are
acceptable to customers ". Thompson & Strickland, 2003:117, believe that the
entry point for achieving and delivering lower-cost products is a strong competitive
entry in the markets as many buyers are price-sensitive, and the goal of these
strategies is to achieve a cost advantage over competitors.
Semuel, Siagian, and Octavia (2017) defined the differentiation strategy as
"providing a product or service that the user considers to be of a value that is not
superior to compete." They also noted that the differentiation strategy includes the
choice of one or more criterion among the options that are used by many buyers in
the industry. The strategy of differentiation is usually associated with high prices
and higher-than-average costs for the industry, that the goal of the strategy
Differentiation is to give customers the opportunity to prefer one product over the
other and thus centralize marketing and strategic thinking for customers.
Anderson and Hannam (2019) defined the concentration strategy as "a complete set
of procedures designed to produce or deliver services that serve the needs of a
particularly competitive sector," while they believe that the concentration strategy
is on one side of the market, i.e. a prestigious product niche. The competitive
advantage strategies are dependent on the satisfaction of the customers of an

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organization (Ivanova, Holionko, Tverdushka, Olejarz, & Yakymchuk, 2019).

Based on these kinds of literature, this study contains hypotheses that are
mentioned as follows:
1. There is a relationship with a significant difference between CRM and the
achievement of competitive advantage, so this hypothesis leads to the following:
I. There is a correlation with a significant difference between the dimensions
of CRM.
II. There is a correlation with a significant difference between the dimensions
of competitive advantage.
III. There is a positive correlation with a significant difference between
customer satisfaction and the dimension of competitive advantage.
IV. There is a correlation with a significant positive difference between the
customer value and the dimension of competitive advantage.

Research methods
This study aims to examine the achievement of competitive advantage by using
customer relationship management. The data gathered from the customer relations
officers and out of 455 responses, only 320 questionnaires were returned that was
representing approximately 70.32 per cent response rate.
The diagram of the study is considered as an expressive image of the aims, and the
idea of this study, the following arrows refer to correlation and impact.

Customer
Costing
satisfaction
Leadership
Strategy (CLS) (CSAT)

Customer
Differentiation Relationships
Strateg (DS)
Competitive Management
Advantage customer (CRM)
value (CV)
Concentration
Strategy (CS)

Figure 1: Hypothetical diagram of the study

Findings
The findings exposed that the convergent validity is valid because all the criteria
are full filed such as the values of Alpha and composite reliability (CR) are larger
than 0.70 while AVE and loadings are not lower than 0.50. These values are
mentioned in Table 1.

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Table 1: Convergent Validity

Items Loadings Alpha CR AVE
CLS1 0.681 0.857 0.889 0.572
CLS2 0.756
CLS3 0.715
CLS4 0.741
CLS5 0.811
CLS6 0.822
CS1 0.831 0.883 0.910 0.629
CS2 0.834
CS3 0.793
CS4 0.685
CS5 0.785
CS6 0.822
CSAT1 0.775 0.896 0.917 0.585
CSAT2 0.848
CSAT3 0.510
CSAT4 0.818
CSAT5 0.736
CSAT6 0.783
CSAT7 0.813
CSAT8 0.782
CV1 0.879 0.806 0.862 0.558
CV2 0.776
CV3 0.709
CV4 0.673
CV6 0.680
DS1 0.696 0.849 0.882 0.520
DS2 0.815
DS3 0.622
DS4 0.619
DS5 0.692
DS6 0.801
DS8 0.776

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The findings also exposed that the discriminant validity also valid because all the
criteria are full filled such as the ratio of Heterotrait Monotrait are not larger than
0.90 that means no high correlation among the constructs that are mentioned in
Table 2 as under:
Table 2: HTMT Ratio
CLS CS CSAT CV DS
CLS
CS 0.777
CSAT 0.773 0.419
CV 0.706 0.537 0.545
DS 0.403 0.636 0.605 0.713

Figure 2: Measurement Model Assessment

The findings also exposed that positive links among both the dimensions of the
supply chain with all three dimensions of competitive advantage because all beta
has a positive sign. In addition, the links are significant because probability values

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are less than 0.50, t-statistics are larger than 1.64, and no zero lies among the upper
and lower limits that are mentioned under Table 3.

Table 3: Path Analysis

Beta S.D. t-values p-values L.L. U.L.
CSAT -> CLS 0.143 0.047 3.020 0.001 0.062 0.215
CSAT -> CS 0.209 0.068 3.071 0.001 0.103 0.334
CSAT -> DS 0.286 0.055 5.165 0.000 0.196 0.372
CV -> CLS 0.749 0.036 20.958 0.000 0.690 0.808
CV -> CS 0.375 0.068 5.493 0.000 0.250 0.479
CV -> DS 0.531 0.043 12.393 0.000 0.462 0.602

Figure 3: Structural Model Assessment

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Discussions
This study found that customer satisfaction and customer value has a positive link
with the competitive advantage strategies and these findings are similar with the
output of Rintamäki and Kirves (2017) who also found that positive association
among the customer value and strategies of competitive advantage. In addition, the
result of the present study is matched with the findings of the Khan and Ghouri
(2018) who also exposed that the selection of the strategies about competitive
advantage depends upon the customer satisfaction of the company. Moreover, the
results of the current study about the positive linkage of customer satisfaction and
strategies of competitive advantage are similar to the output of Kuhl and Krause
(2019) who also examined the positive link among them.
If public organizations want to adopt the concepts of customer relations
management, they should reconsider the internal processes of companies, and this
can be done through reengineering and new changes that keep pace with the state
of progress in modern societies. Urge the employees of the researched
communication companies to pay attention to the quality of the service provided to
customers, and the speed of responding to their requests, especially internet
services, through the holding of sessions and continuous dialogue seminars with
them. The need to benefit from the philosophy of customer relations management
as it allows us to identify customers and build and maintain a profitable bilateral
relationship by delivering excellent value and satisfaction to customers, and this is
by connecting by opening channels of direct communication with the customer and
interacting with him. Competitive advantage must be introduced by public
organizations to be able to meet the challenges faced by the external environment,
i.e. the competition environment.

Conclusions
The contact companies need to increase the cognitive and philosophical interest in
the concept of customer relations management, and the most important theories and
the latest in this field to be able to catch up with the cognitive progress that is
taking place in this field at the regional and global level and to benefit from this
cognitive development at the level Practical and field. The public research
companies are concerned with customer satisfaction. They are an essential priority
for them, but this interest may not be based on a scientific concept such as the
concept of customer relations management and giving importance and care to the
customer as much as it is based on other concepts perhaps, because of the lack of
knowledge of these concepts by employees Scientific. They deal with it
customarily or innately, if you will, and this applies to all other dimensions of
customer relations management. The low customer confidence in the organizations
has led to the emergence of customer relations management to create the language
of dialogue and consult with customers to reach the stage where customers are

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acquired and maintained. One of the main benefits of customer relations

management is that the organization can distinguish itself from other organizations
by rapidly moving to customers through its portals and internet networks that keep
the organization within walking distance of its customers.

Limitations and future directions

This study has some valuable future directions for upcoming research and also the
limitations of the study. This study takes only two factors, such as customer
satisfaction and customer value, to predict the competitive advantage strategies and
suggested that future studies should add more factors in their analysis. In addition,
this study takes only the telecommunication sector in the analysis, and future
studies should add other sectors in their analysis.
References
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strategy in English local authorities. Public Money & Management, 37(4), 261-268.
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(2019). The Strategic Management in Terms of an Enterprise’s Technological
Development. Journal of Competitiveness, 11(4), 40-49.
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Nawaz, M. A., Afzal, N., & Shehzadi, K. (2013). Problems of formally employed women:
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OSIĄGNIĘCIE PRZEWAGI KONKURENCYJNEJ ZA POMOCĄ

ZARZĄDZANIA RELACJAMI KLIENTÓW (CRM)
Streszczenie: Celem związanym z tym artykułem jest zbadanie wpływu zadowolenia i
wartości klienta na strategie przewagi konkurencyjnej, takie jak strategia przywództwa
kosztowego, strategia różnicowania i strategia koncentracji. W badaniu wykorzystano
metodę kwestionariuszową do zebrania danych, podczas gdy do przetestowania hipotez
zastosowano PLS-SEM. Badanie wykazało, że zadowolenie klienta i wartość klienta mają
znaczący pozytywny związek ze strategiami przewagi konkurencyjnej, takimi jak strategia
przywództwa kosztowego, strategia różnicowania i strategia koncentracji. Wyniki te
pokazują, że zwiększone zainteresowanie usunięciem zarządzania relacjami z klientami
(CRM) zwiększy przewagę konkurencyjną w firmach telekomunikacyjnych.
Słowa kluczowe: przewaga konkurencyjna, zarządzanie relacjami z klientami, firmy
telekomunikacyjne.

使用客户关系管理（CRM）实现竞争优势

摘要：与本文相关的目的是研究客户满意度和客户价值对竞争优势战略（如成本领导
战略，差异化战略和集中度战略）的影响本研究使用问卷调查法收集数据，而PLS-
SEM用于检验假设。这项研究发现，客户满意度和客户价值与竞争优势战略（如成本领
先战略，差异化战略和集中度战略）具有显着的正相关关系。这些结果表明，对消除客
户关系管理（CRM）的兴趣日益增加，这将增加电信公司的竞争优势。

关键词：竞争优势，客户关系管理，电信公司。

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