Modeling The Effects of Supplier and Customer Integrationon Business Performance and Competitiveness: The Mediating Role of Internal Integration among Coffee and Tea Shops in Batangas City

This study modeled the effects of supplier and customer integration on the business performance and competitiveness of coffee and tea ‎shops in Batangas City, with internal integration examined as a mediating factor. Anchored in the Resource-Based View, supply chain ‎integration was treated as a strategic capability that supports operational efficiency and competitive advantage. The study aimed to assess the ‎extent of supplier, customer, and internal integration; measure business performance and competitiveness; test direct and mediated effects; ‎determine group differences; and propose strategies for improvement. A quantitative descriptive–correlational design was employed. Using ‎Raosoft sampling, 102 respondents were drawn from 138 registered shops. Data was gathered through a researcher-developed Likert-scale ‎questionnaire and analyzed using descriptive statistics, multiple regression, ANOVA, and Structural Equation Modeling. Results showed high ‎levels of supplier, customer, and internal integration, and business performance and competitiveness were rated to a great extent. Customer ‎integration significantly influenced internal integration and competitiveness, while internal integration predicted business performance. ‎Internal integration partially mediated the effect of customer integration on performance, while supplier integration showed no direct ‎significant effect. ANOVA results indicated significant differences based on firm size and organizational position. Several recommendations ‎are proposed. Coffee and tea shops should develop long-term supplier partnerships supporting joint product development, quality ‎improvement, and sustainability. To strengthen customer retention, loyalty programs must shift toward data-driven, membership-based ‎approaches with personalized rewards. Continued adoption of POS analytics, CRM platforms, and innovative service models can improve ‎efficiency and customer engagement. Since organizational position shapes perceptions of competitiveness, targeted staff training and ‎employee engagement are essential. SMEs may consider forming alliances or cooperatives for collective sourcing and shared logistics. ‎Sustainability and ethical sourcing should be embedded into operations, as ESG-driven practices enhance competitiveness and customer ‎loyalty. Future research may explore mediators such as digital transformation or knowledge sharing and examine moderating effects of ‎changing market and technological conditions‎.