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Sources Of Competitive Advantage For Emerging Fast Growth Small-To-Medium Enterprises: The Role Of Business Orientation, Marketing Capabilities, Customer Value, And Firm Performance

This thesis examines the influence of market, learning, and entrepreneurial orientation as sources of competitive advantage in fast-growth SMEs. It is taken that these three factors synergistically comprise an organization's business orientation, enhancing marketing capabilities and firm performance. In Australia, these firms tend to be emerging enterprises, usually less than 10 years of age, and comprise approximately 10% of all SMEs, contributing substantially to national revenue. Two studies (Study 1 and Study 2) were incorporated, utilizing a sequential explanatory design, which is characterized by undertaking quantitative data collection and analysis (path modelling), prior to conducting qualitative research (case studies/causal network modelling). Study 1 reveals that business orientations are significant antecedents to marketing capabilities. Accordingly, firms leverage advantages associated with a business orientation to strengthen their marketing capabilities. While superior marketing capabilities are important drivers of performance, these capabilities also mediate relationships between business orientation and performance. Without such capabilities, it appears that firm market, entrepreneurial and learning orientations provide little value to attainment of desired performance objectives. Fast growth SMEs invest in maintaining sound relationships with distributors and developing superior products/services for positional advantages. However, only product/service development capabilities contribute significantly to firm performance. Although Relationship Capabilities are related positively with Shared Vision (learning orientation) and Proactiveness (entrepreneurial orientation), this marketing capability dimension displays nonsignificant relationshi ps with performance measures. This finding suggests that even though FGF employees might have sound relationships with distributors/retailers, Relationship Capabilities are not a direct contributor to subjective measures of firm profitability, ROI, ROE, customer satisfaction, new product success, and overall marketing effectiveness, confirming that positional advantage does not necessarily lead to enhanced firm performance. In addition, marketing research, marketing management, marketing communications, and pricing are nonsignificant contributors within the context of the present hypothesized model. Study 2 extends the hypothesized model originating from Study 1. Based on an inductive analysis of case studies, qualitative findings reveal four significant qualities specific to these organizations: Leadership/CEO characteristics, human resource practices, organizational culture, and organizational climate. These characteristics can be regarded as intangible resources associated with fast-growth firms. These attributes appear to be significant antecedents to business orientation, marketing capabilities, customer value, and firm performance. Customer value features prominently. This model is also nonrecursive: firm performance sends a signal to potential employees and customers, impacting human resource related issues such as staff motivation, rewards, and recruitment. Successful firms tend to attract highly talented employees because potential staff want to be associated with winning enterprises. Information generated and disseminated from the renewal process adds new knowledge to superior organizational r esources, making the process nonrecursive. Perhaps, more importantly, Study 2 reveals that fast-growth companies seem to have an uncanny ability to remain ahead, preventing competitors from surreptitiously entering their markets. It might sound as a cliché, however, but these organizations appear to possess a commitment to customer centricity for at least some period of time, retaining customers by developing new products which continue to serve current customers as they change what they value.
Date January 2007
CreatorsTan, Caroline Swee Lin,
PublisherRMIT University. Management
Source SetsAustraliasian Digital Theses Program
Detected LanguageEnglish
Rights, Copyright Caroline Swee Lin Tan

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