Improving importance-performance analysis: The role of the zone of tolerance and competitor performance. The case of Taiwan's hot spring hotels

Importance-performance analysis (IPA) is a valuable and popular approach for prioritizing improvements to the quality of services. Despite its simplicity, shortcomings in the analytical framework remain: (a) its application is hindered by measurement bias; (b) it requires a crosshair placement mechanism to enhance the reliability of managerial interpretations; (c) it does not account for differences between the characteristics of quality attributes; (d) it ignores the relative performance of competitors in the competitive marketplace. Since all of these issues have important managerial implications, this work proposes a model for evaluating service quality based on the competitive zone of tolerance by benchmarking against competitors, and then constructs an analytical framework referred to as “CZIPA” (competitive ZOT service quality based IPA) for prioritizing quality improvements of quality attributes to resolve these above issues. The case of a Taiwanese hot springs hotel is presented to demonstrate the implementation of the proposed CZIPA. The results of this case study demonstrate the feasibility and effectiveness of the determination of priorities of attributes for improvement using CZIPA, enabling hotel managers to achieve a competitive advantage.