Antecedents to differentiation strategy in the exporting SME. Issue 6 (December 2020)

• Record Type: Journal Article
• Authors: Knight, Gary; Moen, Øystein; Madsen, Tage Koed
• Is Part Of: International business review. Volume 29:Issue 6(2020:Dec.)
• Publication Date: 2020-12
• Subjects: SMEs -- Differentiation strategy -- International performance -- Empirical study; International business enterprises -- Periodicals; 338.8805
• DOI: 10.1016/j.ibusrev.2020.101740
• Languages: English
• ISSNs: 0969-5931

Abstract

Highlights: Key orientations and differentiation strategy drive performance in exporting SMEs. Among the generic strategies, differentiation is a key strategy in the exporting SME. Entrepreneurial Orientation drives important orientations and strategy. Entrepreneurial Orientation supports International Growth and Learning Orientations. Entrepreneurial, International Growth, and International Learning Orientations together support Differentiation Strategy. Abstract: Small- and medium-sized enterprises (SMEs) face various constraints related to size and resource base. Such firms face additional liabilities when they venture into foreign markets. Given such conditions, exporting SMEs should develop and leverage appropriate orientations and strategies, with a view to maximizing firm performance. In this paper, we examine the antecedents to differentiation strategy in the exporting SME. We focus on differentiation strategy because, among the generic strategies, it provides especially important competitive advantages to SMEs. Using survey data from several hundred SMEs, we examine key factors that support the use of differentiation strategy in exporting smaller firms. Findings support our model and hypotheses, and reveal strong roles for Entrepreneurial Orientation, International Growth Orientation, and International Learning Orientation, in the development of Differentiation Strategy. Findings hold implications for SMEs and resource-constrained firms generally.