The general objective of this study is to validate the multi-level concept of competitive priorities using reflective-formative model at a higher order for service industries. An empirical study of 228 firms from 9 different service industries is conducted to answer the objective of this study. Partial least square analysis with SmartPLS 2.0 was used to perform the analysis. Finding revealed six priorities: cost, flexibility, delivery, quality talent management, quality tangibility, and innovativeness. It emerges that quality are expanded into two types; one is related to managing talent for process improvement and the second one is the physical appearance and tangibility of the service quality. This study has confirmed competitive priorities as formative second-order hierarchical latent construct by using rigorous empirical evidence. Implications, limitation and suggestion for future research are accordingly discussed in this paper.

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