How to improve market performance through competitive strategy and innovation in entrepreneurial SMEs

Mercedes Rubio-Andrés (), Jorge Linuesa-Langreo (), Santiago Gutiérrez-Broncano () and Miguel Ángel Sastre-Castillo ()
Additional contact information
Mercedes Rubio-Andrés: Complutense University of Madrid
Jorge Linuesa-Langreo: University of Castilla-La Mancha
Santiago Gutiérrez-Broncano: University of Castilla-La Mancha
Miguel Ángel Sastre-Castillo: Complutense University of Madrid

International Entrepreneurship and Management Journal, 2024, vol. 20, issue 3, No 5, 1677-1706

Abstract: Abstract Despite the limited resources of small and medium-sized enterprises (SMEs), they can still manage to be competitive and survive in the current environment by implementing competitive strategies that lead to innovation and improve their market performance. The aim of this study is to examine and analyse the effect of business strategy on market performance in Spanish small and medium-sized entrepreneurial enterprises, and the mediating effect of innovation is explored as a solution to business crises. In addition, we analyse the moderating effect that the perceived risk of COVID-19 may have on this relationship, as well as whether the commercialisation capacity of SMEs exerts an impact and improves performance based on innovation. Taking 1,842 Spanish entrepreneurial firms with fewer than 250 employees as a reference and using partial least squares structural equation modelling (PLS-SEM), our study shows that entrepreneurial SMEs that apply a competitive strategy can achieve enhanced innovation. Moreover, this innovation has a direct and positive effect on the market performance of SMEs, and this effect is greater under higher marketing capability. Our findings suggest a heterogeneous effect on the impact of the perceived risk of COVID-19 on the strategy-innovation relationship. In entrepreneurial SMEs that adopt a differentiation strategy, the perceived risk has an enhancing impact, while in entrepreneurial SMEs that follow cost strategies, the effect is negative.

Keywords: Competitive strategies; Innovation; Market performance; Perceived risk from COVID-19; Marketing capability; Entrepreneurial SMEs (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s11365-024-00947-9 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:intemj:v:20:y:2024:i:3:d:10.1007_s11365-024-00947-9

Ordering information: This journal article can be ordered from
http://www.springer. ... urship/journal/11365

DOI: 10.1007/s11365-024-00947-9

Access Statistics for this article

International Entrepreneurship and Management Journal is currently edited by Salvador Roig

More articles in International Entrepreneurship and Management Journal from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().