BUSINESS MODEL INNOVATION AND SMEs PERFORMANCE — DOES COMPETITIVE ADVANTAGE MEDIATE?

Abstract

In the era of globalisation and dynamic market, firms look for competitive advantage and survival using different sources and resources. Prior studies have indicated that Business Model Innovation (BMI) is a core driver for firm’s survival and superior performance especially in growing industries. However, the role of BMI has been discussed theoretically and exploratory while empirical studies are still lacking. Hence, this study examines the importance of BMI in SME performance and the mediating role of competitive advantage. Data were collected through structured questionnaires using a sample size of 303 manufacturing SMEs operating in the emerging market of Pakistan. Hypotheses were tested through Structural Equation Modelling (SEM) using AMOS.21. The results indicate that BMI has a significant positive impact on competitive advantage and SME performance. Competitive advantage partially mediates the relationship between BMI and SME performance. Firms are required to create an effective business model to acquire competitive advantage and superior financial performance. Implications for practice have been discussed.

Enterprise Risk Management Practices and Firm Performance, the Mediating Role of Competitive Advantage and the Moderating Role of Financial Literacy

“…As posited by RBV theory, a firm with unique resources (tangible and intangible) acquires competitiveness and superior performance over other firms which lack resources and capabilities (Barney 1991). Studies agree (Porter 1980) that competitive strategy, where a firm can reduce different costs and offer unique products to their customers, is the main tool to gain a competitive advantage in a turbulent market (Anwar 2018;Lechner and Gudmundsson 2014). We hereby suggest that ERM practices are the internal capabilities through which a firm can reduce different types of costs related to material, operational, supply and marketing to increase its value.…”

“…Similarly, a firm can acquire differentiation-based competitive advantage by differentiating its products and services from competitors. In an intense market, competitive advantage is necessary for SME operation, especially in the emerging market, to sustain high performance (Anwar 2018). Both competitive strategies are associated with high performance of SMEs but not always (Parnell 2010).…”

“…Registered firm lists were obtained from the Rawalpindi Chamber of Commerce and Industry, the Islamabad Chamber of Commerce and Industry and the Karachi Chamber of Commerce and Industry. We requested the owners and top managers as they are more responsible for strategic planning and performance of their firms (Anwar 2018). 900 questionnaires were distributed of which 336 were received back.…”

“…SME performance: measurement of SME performance is a challenge for researchers, because of the non-existence of financial data (Anwar 2018). However, where data are not available, researchers have recommended the use of self-reported measures.…”

Intellectual Capital, Entrepreneurial Strategy and New Ventures Performance: Mediating Role of Competitive Advantage

“…Existing literature has realized that firms can gain competitive advantage (CA) and superior performance by using resources efficiently and innovatively (Anwar, 2018;Demil, Lecocq, Ricart, & Zott, 2015;Shane & Venkataraman, 2000;220). However, in the current era, market changes occur beyond the expectations (Brizek, 2014) and firms (especially new ventures) have to cope with such dynamic markets and future demands (Sun, Yao, Zhang, Chen, & Liu, 2016).…”