American International Journal of Contemporary Research
Vol. 2 No. 1; January 2012
Competitive Strategy of Malaysian Small and Medium Enterprises: An Exploratory Investigation
Dr. M. Mohd Rosli
Department of Business and Finance
Faculty of Entrepreneurship and Business
University of Malaysia Kelantan
Purpose – The purpose of this paper is to explore the competitive strategy emphasised by SMEs in order to cope with global competition.
Design/methodology/approach – A self-administrative questionnaire was distributed to 300 potential respondents in the F&B and T&C manufacturing industries throughout Malaysia. A total of 212 respondents or small and medium enterprises returned the completed questionnaires. Data analysis was conducted using mean scores and t-tests.
Findings – The SMEs have placed high emphasis on firm management, marketing and human resource management; and moderate emphasis on total innovation. On the other hand, low emphasis can be seen in some innovation elements and all global orientation indicators. Results also show that the competitive strategies between the F&B and T&C industries are significantly different in innovation and global orientation. Research limitations/implications – With greater competition in the globalised market, emphasis on firm management, marketing and human resource management are insufficient. The SMEs also should give greater priority to dynamic capabilities, especially innovation and global orientation, in order to survive in the marketplace.
Originality/value – Similar emphasis on firm management, marketing and human resource management indicates that the SMEs have slim competitive advantages in these basic resources and capabilities. Therefore, the findings serve a strong signal for SMEs to step up their competitive strategies more towards improving dynamic capabilities in innovation and global orientation.
Keywords: Global competition, Competitive strategies, SMEs, Malaysia Introduction
Unprecedented changes in the global business environment induced by rapid developments in communication and information technology, trade liberalisation, trade-related support services, cross-border capital flows (Koh et al., 2009) and more demanding consumers in the last two decades have made competitive strategies become more relevant to the firms. As globalisation flexes its muscle in the economy, firms compete not only with their domestic but also foreign rivals. With a rapid adoption of the Internet, physical boundaries and distance become less important as firms all over the world are now able to cater for larger markets more efficiently (Kim et al., 2004). All this development has coerced firms to step up the level of competitiveness against their competitors in the same industry. Only the firms that have the capability in all facets of competitive priorities (Singh et al., 2007) will survive in such a turbulent marketplace. Confronting with more rapid changes in the market than ever before, firms have no choice, but to adapt to the environment in order to survive and prosper (Gereffi, 2001). Small and Medium Enterprises (SMEs) do not escape from the globalisation phenomenon. Traditionally, some SMEs confined their activities to the region of their presence, but most of them remain in their national boundaries (Ruzzier et al., 2006). A majority of the actors in less developed countries may give little emphasis on core competitive strategies in order to survive in such a globalised world. In the past, some SMEs could focus exclusively on the domestic market, but now they have to be globally competitive for their own long-term survival and growth (Karagozoglou and Lindell, 1988).
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In fact, if they are incapable of going abroad, foreign firms and products will come to their land. This development is especially true since the firms and not the nations compete in the...
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