The moderating role of Tri Hita Karana culture in the relationship between differentiation strategy and competitive advantage: Evidence from Homestay Enterprises in Ubud, Bali

The rapid growth of homestay businesses in Ubud has intensified competition among accommodation providers, compelling local homestay operators to develop distinctive value propositions in order to sustain their competitive position. While differentiation strategies have been widely recognized as essential drivers of competitive advantage, limited attention has been given to the role of indigenous cultural values in strengthening the effectiveness of such strategies. This study aims to examine the effects of product differentiation, service differentiation, and image differentiation on competitive advantage, as well as the moderating role of the Tri Hita Karana cultural philosophy in the homestay sector of Ubud, Bali.
Employing a quantitative research design complemented by in-depth interviews, this study collected data from 145 tourists selected through purposive sampling in the Ubud Palace area. The proposed hypotheses were tested using Moderated Regression Analysis (MRA) to evaluate both the direct effects of differentiation strategies and the moderating influence of Tri Hita Karana.
The findings reveal that product differentiation, service differentiation, and image differentiation exert significant positive effects on the competitive advantage of homestay enterprises in Ubud. Furthermore, the results demonstrate that Tri Hita Karana serves as a moderating variable that strengthens the relationships between differentiation strategies and competitive advantage. These findings suggest that the integration of local cultural values emphasizing harmony among spirituality (Parhyangan), human relations (Pawongan), and the natural environment (Palemahan) enhances the effectiveness of differentiation initiatives and contributes to the development of sustainable competitive advantage.
This study provides important theoretical contributions to the Resource-Based View (RBV) literature by positioning indigenous cultural values as strategic intangible resources capable of reinforcing competitive outcomes. Practically, the findings offer valuable insights for homestay operators, tourism stakeholders, and policymakers seeking to leverage local wisdom as a strategic asset for enhancing competitiveness and sustaining culture-based tourism development in Bali.