**2.4. Competitive advantages and international performance in BGs**

A review of the conceptualisations of the competitive advantage concept shows that, by definition, a firm has a competitive advantage over another firm when it obtains a superior performance [82]. Therefore, the competitive advantage can be seen as a direct antecedent of a BG's international performance because the superiority arising from its attempt to provide value determines the purchasing performance of its target market [55], and consequently its performance [40, 72, 83]. When a firm achieves competitive advantages (differentiation-based and/or cost-based), it has a higher capacity to generate value for its clients and, in turn, greater levels of client satisfaction, business volume and market share and lower customer service costs [30, 84, 85]. As Snoj et al. [83] point out, sustaining competitive advantages is the basis for achieving superior business performance, survival and development. Therefore, the following hypotheses are proposed:

*H4: BGs' achievement of differentiation-based competitive advantages contributes to higher levels of international performance*.

*H5. BGs' achievement of cost-based competitive advantages contributes to higher levels of international performance*.

**Figure 1** summarises the model of effects for the study.

**Figure 1.** Model of effects.
