Market penetration strategy, market development strategy, cost leadership strategy, SME performance
The main objective of this study is to examine strategic alignment and implementation perspective of manufacturing based of SMEs in Nigeria. The study established the strategic match between firm’s growth strategy, competitive strategy, and performance. Specifically, this paper aims to investigate the effects of market penetration strategy, market development strategy and cost leadership strategy on performance. Hence, this study employed cross-sectional survey design; SPSS and PLS-SEM were used for preliminaries and hypothesis testing. 277 usable questionnaires were collected from owners-managers of manufacturing based of SMEs. The findings of this study indicate that market penetration strategy and market development strategy significantly influence the firm performance of manufacturing based SMEs in Nigeria. Also, the result shows that market penetration and market development strategy have a significant impact on cost leadership strategy, which enhances firm’s competitiveness and competitive advantage. However, the result of mediating role of cost leadership strategy was established. The findings suggest that cost leadership strategy exert the relationship of market penetration & market development strategy and performance alignment. Therefore, owners-managers of manufacturing based of SMEs possibly make decisions considering their strategic orientation perspective collectively to integrate growth strategies and competitive strategy to sustain competitive advantage, improve competency and achieve superior performance.
Full Text : PDF
- Abiodun, A. (2014). SME firms performance in Nigeria: Competitive advantage and its impact. International Journal of Research Studies in Management, 3(2), 75–86.
- Airaksinen, A., Luomaranta, H., Alajääskö, P., & Roodhuijzen, A. (2015). Statistics on small and medium-sized enterprises. Eurostat, (September), 1–14. Retrieved from
- http://ec.europa.eu/eurostat/statistics-explained/index.php/Statistics_on_small_and_medium-sized_enterprises
- Akingbade, W. A. (2014). Competitive strategies and improved performance of selected Nigeria telecommunication companies. Journal of Entrepreneurship Management and Innovation, 10(4), 143–168.
- Alkasim, Sidi, B., Hilman, H., & Manaf, A. (2017). The effect of strategic growth on the performance of manufacturing based SME in Nigeria. International Journal of Research in Management, 4(7), 102–110.
- Allen, R. S., & Helms, M. M. (2006). Linking strategic practices and organizational performance to porter’s generic strategies. Business Process Management, 12(4), 433–454.
- Ansoff, I. (1965). Corporate Strategy. Management (Vol. 44).
- Ansoff, I. Ansoff ’ s Matrix, CIMA 133–151 (2002).
- Armstrong, C. E. (2013). Competence of flexibility? Survival and growth implications of competitive strategy preferences among small US businesses. Journal of Strategy and Management, 6(4), 377–398.
- Barbero, N. J. L., Bueno, J. C. C., & Barringer, B. (2012). Forms of growth: How SMEs combine forms of growth to achieve high growth. Journal of Management and Organization, 18(1), 81–97. http://doi.org/10.5172/jmo.2012.18.1.81
- Basu, S., & Gupta, R. (2013). Explorations of strategic orientation ( SO ) dimensions on small firm growth and the challenge of resources. European Journal of Business and Management, 5(20), 242–248.
- Dillman, D. A. (2007). Mail and Internet surveys: The tailored design method (2nd ed.). New Jersey: John Wiley & Sons Inc.
- Ferreira, A., & Otley, D. (2009). The design and use of performance management systems: An extended framework for analysis. Management Accounting Research, 20(4), 263–282.
- http://doi.org/10.1016/j.mar.2009.07.003
- FinIntell. (2014). Sectoral analysis of Nigeria ’ s economy.
- Furrer, O., Sudharshan, D., Thomas, H. &, & Alexandre, M. T. (2008). Resource configurations, generic strategies, and firm performance exploring the parallels between reource-based and competitive strategy theories in a new industy. Journal of Strategy and Management, 1(1), 15–40.
- http://doi.org/10.1108/JFM-03-2013-0017
- Hair, F. J., Hult, M. T., Ringle, M. C., & Sarstedt, M. (2014). A primer on partial least squares structural equation modeling (PLS-SEM). Sage, Los Angeles. http://doi.org/10.1017/CBO9781107415324.004
- Han, C., Dong, Y., & Dresner, M. (2013). Emerging market penetration, inventory supply, and financial performance. Production and Operations Management, 22(2), 335–347. http://doi.org/10.1111/j.1937-5956.2011.01311.x
- Hayes, A. F., & Preacher, K. J. (2010). Quantifying and testing indirect effects in simple mediation models when the constituent paths are nonlinear. Multivariate Behavioral Research, 45(4), 627–660. http://doi.org/10.1080/00273171.2010.498290
- Henseler, J., Ringle, C. M., & Sarstedt, M. (2014). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. http://doi.org/10.1007/s11747-014-0403-8
- Henseler, J., Ringle, C. M., & Sinkovics, R. R. (2009). The use of partial least squares path modeling in international marketing. Advances in International Marketing, 20, 277–319.
- http://doi.org/10.1016/0167-8116(92)90003-4
- Hilman, H., & Kaliappen, N. (2014). Do Cost Leadership Strategy and Process Innovation Influence the Performance of Malaysia Hotel Industry? Asian Social Science, 10(10), 134–141.
- http://doi.org/10.5539/ass.v10n10p134
- Hudson, M., Smart, A., & Bourne, M. (2001). Theory and practice in SME performance measurement systems. International Journal of Operations & Production Management, 21(8), 1096–1115.
- Hussain, S., Khattak, J., Rizwan, A., & Latif, M. (2013). ANSOFF matrix, environment, and growth- An interactive triangle. Management and Administrative Sciences Review, 2(2), 196–206. Retrieved from http://www.absronline.org/journals/index.php/masr/article/view/102
- Kaplan, S. R., & Norton, P. D. (1996). Using the balanced scorecard as a strategic management system. Harvard Business Review, 74, 75–85.
- Lechner, C., & Gudmundsson, S. V. (2014). Entrepreneurial orientation, firm strategy and small firm performance. International Small Business Journal, 32(1), 36–60.
- http://doi.org/10.1177/0266242612455034
- Leitner, K. (2014). Strategy formation in the innovation and market domain: emergent or deliberate? Journal of Strategy and Management, 7(4), 354–375.
- NBS Abstract Report. (2012). National bureau of statistics annual abstract of tatistics, Federal Republic of Nigeria.
- NBS & SMEDAN. (2012). Survey report on Micro, Samll and Medium Enterprises (MSMEs) in Nigeria. National MSME Collaborative Survey.
- Oltra, M. J., & Flor, M. L. (2010). The moderating effect of business strategy on the relationship between operations strategy and firms’ results. International Journal of Operations & Production Management, 30(6), 612–638.
- Porter, M. E. (1980). Competitive atrategy: Techniques for Analyzing industries and competitors. Macmillan, New York.
- Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. The Free Press, New York.
- Prajogo, D. I., & Sohal, A. S. (2006). The relationship between organization strategy, total quality management (TQM), and organization performance––the mediating role of TQM. European Journal of Operational Research, 168(1), 35–50. http://doi.org/10.1016/j.ejor.2004.03.033
- Santos-Vijande, M. L., Lopez-Sanchez, J. A., & Trespalacios, J. A. (2012). How organizational learning affects a firm’s flexibility, competitive strategy, and performance. Journal of Business Research, 65(8), 1079–1089. http://doi.org/10.1016/j.jbusres.2011.09.002
- Sekaran, U., & Bougie, R. (2013). Research methods for business: A skill building approach 6th ed. John Wiley & Son.
- Soni, G., & Kodali, R. (2011). The strategic fit between “competitive strategy” and “supply chain strategy” in Indian manufacturing industry: an empirical approach. Measuring Business Excellence, 15(2), 70–89. http://doi.org/10.1108/13683041111131637
- Stede, V. Der, Wim, A., Chow, C. W., & Lin, T. W. (2006). Strategy, choice of performance measures, and performance. Behavioral Research in Accounting, 18(2002), 185–205.
- http://doi.org/10.2308/bria.2006.18.1.185
- Tavakolizadeh, S. (2014). Growth strategies in mature markets.
- Teece, D. & Pisano, G. (1994). The dynamic capabilities of firms: An introduction. Industrial and Corporate Change, 3(3), 537–556.
- Teece, D. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28, 1319–1350.
- Teece, D., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533.
- Tseng, K.-A., Lan, Y.-W., Lu, H.-C., & Chen, P.-Y. (2013). Mediation of strategy on intellectual capital and performance. Management Decision, 51(7), 1488–1509. http://doi.org/10.1108/MD-03-2012-0143
- Uchegbulam, P., Akinyele, S., & Ibidunni, A. (2015). Competitive strategy and performance of selected SMEs in Nigeria. In International Conference on African Development Issues: Social and Economic Models for Development Track (pp. 326–333).
- Uko, J. P., & Ayatse, F. a. (2014). Market penetration as a growth strategy for small and medium-sized enterprises in Nigeria. Management and Administrative Sciences Review, 23(January), 8–23.
- UNIDO. (2016). Industrial Development Report 2016: The Role of Technology and Innovation in Inclusive and Sustainable Industrial Development.
- Veraart, D., Thijsen, T., Tong, T., & Leer, J. van. (2014). Ansoff model: product/market expansion grid.
- W. Mwangi, A., & Omhui, K. (2013). Effects of Competitive Strategies on the Performance of Mission Hospitals in Kenya (A Case of Kijabe Mission Hospital). International Journal of Science and Research, 2(11), 14–19