The role of strategic capabilities and entrepreneurial orientation in enhancing the competitive performance of manufacturing small and medium enterprises

Elohor Katherine Idolor (), Sunday Abayomi Adebisi and Simeon E. Ifere
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Elohor Katherine Idolor: University of Lagos
Sunday Abayomi Adebisi: University of Lagos
Simeon E. Ifere: University of Lagos

Journal of Global Entrepreneurship Research, 2025, vol. 15, issue 1, 1-24

Abstract: Abstract In dynamic environments, firms encounter significant threats stemming from intense market competition, technological disruptions, leadership challenges, and inadequate financial management, all of which can jeopardize their survival in competitive economies. The acceleration of globalization and the rise of international entrepreneurship have heightened the necessity for companies to implement aggressive business strategies, capitalize on their core competencies, and allocate resources effectively in order to secure a competitive advantage. However, erratic market conditions and increasing competition among multinational manufacturing firms complicate operations for small and medium-sized enterprises (SMEs), which often possess limited resources to address emerging market challenges. To enhance their chances of survival, managers and SME owners must adopt a resilience-oriented approach by identifying key capabilities and entrepreneurial traits that can be leveraged to foster competitiveness. This study emphasizes the importance of developing strategic capabilities and entrepreneurial orientation to enhance the competitive performance of manufacturing SMEs. It empirically investigates the impact of these factors on SME performance while considering the moderating effects of the business environment. Grounded in resource-based and dynamic capability theories, the research used a cross-sectional design to gather data from 315 participants using the G* Power analysis for sample size within a population of 618 manufacturing SMEs in Nigeria, ultimately collecting 288 usable responses from managerial staff in Lagos State through an exploratory questionnaire survey. Data analysis was conducted using structural equation modeling (SEM) with AMOS software. The findings revealed that strategic capabilities and entrepreneurial orientation significantly improve the competitive performance of SMEs, highlighting the necessity for managers to develop essential capabilities and behaviors to thrive in an increasingly competitive landscape. Future research could replicate these findings in the agricultural, industrial, and services sectors.

Keywords: Dynamic business environment; Entrepreneurial orientation; Strategic capabilities; Small and medium enterprises competitive performance (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s40497-025-00434-7

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