Competitive Advantage Effecting Firm Performance: Case Study of Small and Medium Enterprises in Thailand

Authors: Somdech Rungsrisawas

Abstract:

The objectives of this study are to examine the relationship between the competitive advantage of small and medium enterprises (SMEs) and their overall performance. A mixed method has been applied to identify the effect of determinants toward competitive advantage. The sample is composed of SMEs in product and service businesses. The study has been tested at an organizational level with samples of SME entrepreneurs, business successors, and board of directors or management team. Quantitative analysis has been conducted through multiple regression analysis with 400 samples. The findings illustrate that each aspect of competitive advantage needs a different set of driving factors to explain either the direct or the indirect effect on firm performance. Interestingly, technological capability is a perfect mediator and interorganizational cooperation toward competitive advantage. In addition, differentiation is difficult to be perceived by customers, as well as difficult to manage; however, it is considered important to develop an SMEs product or service for firm sustainably.

Keywords: Competitive advantage, firm performance, technological capability, small and medium enterprise, SMEs.

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1127659

References:

[1] Anderson, Donna, Plotnikoff, Ronald C., Raine, Kim and Barrett, Linda. 2005. Development of Measures of Individual Leadership for Health Promotion. International Journal of Health Care Quality Assurance. 18, 2/3.
[2] Asree, Susita, Zain, Mohamed and Razalli, Mohd Rizal. 2010. Influence of Leadership Competency and Organizational Culture on Responsiveness and Performance of Firms. International Journal of Contemporary Hospitality Management. Vol. 22 No. 4. Emerald Group Publishing Limited
[3] Bastos, Paula. 2001. Inter-Firm Collaboration and Learning: The Case of the Japanese Automobile Industry. Asia Pacific Journal of Management; Dec; 18, 4.
[4] Cater, Tomaz and Cater, Barbara. 2009. (In)tangible Resources as Antecedents of a Company’s Competitive Advantage and Performance. JEEMS 2/2009.
[5] Cuero, Y., Nabi, M.N. and Dornberger, UTZ. 2012. Technological Capability Improvement as Result of the Entrepreneur’s Search for Innovation in the SMEs in Colombia. University of Leipzig, Germany.
[6] Dennis, Cheryl. 2000. Networking for marketing advantage. Management Decision 38/4. MCB University Press.
[7] Flint-Hartle, Susan and De Bruin, Anne. 2010. Franchising Success: Insights from Real Estate Brokerage. International Small Business Journal. 29(1) 58–77. Sage Publications.
[8] Grant, Robert M. and Baden-Fuller, Charles. 1995. A knowledge-based Theory of Inter-Firm Collaboration. Academy of Management Journal.
[9] Kumar, Vinod, Kumar, Uma and Persaud, Aditha. 1999. Building Technological Capability Through Importing Technology: The Case of Indonesian Manufacturing Industry. Journal of Technology Transfer, Apr; 24, 1. Kluwer Academic Publisher.
[10] Lane, Christel and Probert, Jocelyn, 2007 The External Sourcing of Technological Knowledge by US Pharmaceutical Industry and Innovation. 14, 1.
[11] Li, Ling Hin and Wang Wang. 2006. Real Estate Agency in China in the Information Age. Property Management. Vol. 24 Iss: 1.
[12] Lindahl, David P. and Beyers, William B. 1999. The Creation of Competitive Advantage by Producer Service Establishments. Economic Geography; 75, 1. ABI/INFORM Complete.
[13] Porter, Michael E. 1990. The Competitive Advantage of Nations. New York: The Free Press.
[14] Potthoff, Sandra and Ryan, Mary J. 2004. Leadership, Measurement, and Change in Improving Quality in Healthcare/Reply Frontiers of Health Services Management; Spring. 20, 3.
[15] Wang, Chun-hsien, Lu, Luan- Yuan and Chai, Kang- Wei. 2006. Evaluating Firm Technological Innovation Capability under Uncertainty. Technovation, 28. Sciencedirect.