This research has developed and tested a model contemplating the theoretical constructs product innovation and competitive priorities of quality and flexibility as background to the competitive advantage in the production chain of the Serra Gaúcha, Rio Grande do Sul, Brazil. This quantitative descriptive nature study was conducted through a survey applied to a sample of 250 chain producers. Data were analyzed by means of structural equation modeling. The results show that the competitive priorities of quality and flexibility affect positively the product innovation and the innovation of products influences positively the competitive advantage. Thus, the competitive priorities are configured as history of product innovation and product innovation has positive relationship with competitive advantage.
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