Does halal product influence business performance?
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Influence of Halal Products on Business Performance
Introduction to Halal Certification and Business Performance
Halal certification has emerged as a significant factor influencing business performance, particularly in the food industry. This certification ensures that products comply with Islamic dietary laws, which can open up new market opportunities and enhance consumer trust. Several studies have explored the relationship between halal certification and various aspects of business performance, including operational, financial, innovative, and market performance.
Operational and Financial Performance
Positive Impact on Operational Performance
Research indicates that halal food certification (HFC) positively influences operational performance. A study involving 210 halal-certified food manufacturing companies in Malaysia found that HFC implementation enhances operational efficiency, which in turn mediates the relationship between HFC and financial performance. This suggests that companies with halal certification can achieve better operational outcomes, leading to improved financial results.
Financial Performance Enhancement
The same study also highlighted that operational performance acts as a mediator between HFC and financial performance, indicating that the improvements in operational processes due to halal certification directly contribute to better financial outcomes. This finding is consistent with other research that shows halal certification positively impacts the logistical and financial performance of small and medium-sized enterprises (SMEs) in the food sector.
Innovative and Market Performance
Boost in Innovative Performance
Halal certification also significantly affects the innovative performance of food companies. A study conducted in the Philippines involving 211 food companies revealed that halal certification leads to improvements in innovative performance, which subsequently enhances market performance. This indicates that halal-certified companies are more likely to innovate, which helps them perform better in the market.
Market Performance Improvement
The same study found that innovative performance fully mediates the relationship between halal certification and market performance, suggesting that the primary way halal certification boosts market performance is through fostering innovation. This is crucial for companies looking to differentiate themselves and capture a larger market share.
Factors Influencing Halal Product Performance
Supply Chain Integration and Health Consciousness
In the context of sustainable product performance, factors such as supply chain integration (SCI), health consciousness (HC), and process quality improvement (PQI) have been found to positively influence the performance of halal products. These factors ensure that the entire supply chain adheres to halal standards, which enhances product quality and consumer trust.
Entrepreneurial Marketing
Entrepreneurial marketing also plays a significant role in the success of halal-certified SMEs. Research shows that both halal certification and entrepreneurial marketing are critical factors that determine the success of food product enterprises. Effective marketing strategies that highlight the halal certification can attract more consumers and improve business performance.
Conclusion
Halal certification has a multifaceted impact on business performance, influencing operational, financial, innovative, and market outcomes. Companies that obtain halal certification can expect improvements in operational efficiency, financial results, and market performance, primarily through enhanced innovation and effective marketing strategies. As the demand for halal products continues to grow, businesses that invest in halal certification are likely to see significant benefits in their overall performance.
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