Purpose The purpose of this paper is to apply a more accurate competitive advantage construct to study the impact of total quality management on firms’ competitive advantage in the context of the weakening of the competitive advantage of firms that are renowned for the excellent quality management. It also aims to find a better explanation for the source of competitive advantage through mediating constructs. Design/methodology/approach The authors use iterative methodology by reviewing, analyzing, synthesizing and refining the current state of the literature and propose a research framework which allows for overcoming the limitation encountered in previous empirical research. Findings The use of two second-order constructs including the incremental innovation performance and radical innovation performance which enable the researchers to have a better explanation about the mediating role of innovation performance. Practical implications This study is seeking to contribute to the practice of total quality management area of research. Specifically, this study applies two second-order measurement scales of innovation in use, actualize the use of the new measurement scale of competitive advantage and explain clearly the role of total quality management on competitive advantage in the current context. Originality/value This is one of the few papers investigating the impact of total quality management on competitive advantage, developing the conceptual model that examines the mediating role of innovation performance.