Customer value co-creation, customer engagement, and sustainable competitive advantage: a study on traditional restaurants

Traditional restaurants, as Tradition-Based Firms, preserve cultural and historical heritage through time-honored recipes, symbols, and practices. To maintain authenticity, managers must balance innovation implementation with tradition preservation. This study examines how customer value co-creation and customer engagement contribute to sustainable competitive advantage in these businesses. Based on a qualitative exploratory study of long-established restaurants, the findings identify three mechanisms linking these constructs: increased innovation capacity, strengthened organizational image, and the development of customers’ affective memories. We propose guidelines and a design framework for strategy formulation, showing how customer involvement can support innovation while preserving authenticity and heritage.