The Role of Product and Process Innovation in Achieving Competitive Advantage in Palestinian Food Industries Sector رسالة ماجستير

Abstract

This master thesis investigates the influence of product and process innovation on competitive advantage in the Palestinian food processing industries (PFPI) located in the West Bank. It also examines the mediating role of dynamic capabilities, specifically internal learning and reconfiguration capabilities, in these relationships. The study aims to identify how different innovation types and organizational capabilities interact to enhance firms’ competitive positions in a challenging and dynamic market environment. A mixed-method was adopted to enhance an explanatory and correlational research design, targeting managers from 72 companies operating in the sector. Data were collected through interviews with PFIU and some managers in addition to structured electronic questionnaires, yielding 204 valid responses. The analysis was conducted using Smart-PLS software, applying descriptive statistics, measurement model evaluation, structural model testing, and mediation analysis to validate the proposed relationships. The findings revealed that both product and process innovation individually exert significant positive effects on competitive advantage, whereas their combined implementation (complementarity) does not yield a stronger effect. Furthermore, internal learning capabilities were found to significantly mediate the relationship between product innovation and competitive advantage, while reconfiguration capabilities mediated the relationship between process innovation and competitive advantage. These results highlight v that dynamic capabilities serve as vital mechanisms through which innovation translates into sustained competitiveness. The study concludes that enhancing innovation initiatives alongside internal learning and reconfiguration processes strengthens firms’ adaptive capacity and market responsiveness. Accordingly, it recommends that managers prioritize continuous learning, resource flexibility, and innovation-focused strategies to achieve long-term competitive advantage in the Palestinian Food Industries