Toward Enhancing Sustainable Competitive Advantage of Small and Medium Enterprises in Developing Economies of Africa: A Confirmatory Analysis

  • Yakubu Salisu Yobe State University, Damaturu, Nigeria
  • Lily Julienti School of Business Management, College of Business, Universiti Utara Malaysia, 06010 Sintok Kedah Darul Aman Malaysia
Keywords: Strategic Capabilities, Competitive Advantage, SMEs

Abstract

The increasing globalization and liberalization of trade have posed onto manufacturing small and medium enterprise (SMEs) in developing economies of Africa a survival and growth challenges. Nevertheless, the resource-based-view (RBV) has given rise to a perspective that views a firm’s intangible assets as strategic resources with the potential to create and enhance sustainable competitive advantage in both local and global markets. Based on the peculiarity of SMEs in Africa, this paper develops and validate a conceptual model on the role of strategic organizational capabilities in improving the competitive advantage of SMEs for sustainable development in developing economies of Africa. Precisely, six variables were identified and reviewed as strategic capabilities. A total number of 81 valid questionnaires were retrieved from owners/managers of SMEs in Yobe state Nigeria and used to evaluate the reliability and validity of the adopted measures. The result of Cronbach’s Alpha test reveals a satisfactory value for all the variables under study. Specifically, innovation, learning, management, marketing, relational and technological capabilities have been established to be reliable strategic capabilities that would effectively and efficiently create and improve the sustainable competitive advantage of SMEs in developing economies.

References

Abereijo, I. O. et al. (2009) ‘Technological innovation sources and institutional supports for manufacturing small and medium enterprises in Nigeria’, Journal of Technology Management and Innovation, 4(2), pp. 82–89. doi: 10.4067/S0718-27242009000200007.
Abu Bakar, L. J. and Ahmad, H. (2012) ‘A study of product innovation performance: Identifying the most innovative industry in Malaysian manufacturing sector’, in The 3rd International Conference on Technology and Operations Management, pp. 978–979. Available at: http://repo.uum.edu.my/5764/.
Ajonbadi, H. A. (2015) ‘Technology Drive to Small and Medium Enterprises (SMEs) Growth in Nigeria’, in 5th Conference of Directors of Entreprenurship Development Centres. Ilorin, pp. 1–15.
Akeyewale, R. (2018) Who are the winners and losers in Africa’s Continental Free Trade area?, World Economic Forum. Available at: https://www.weforum.org/agenda/2018/10/africa-continental-free-trade-afcfta-sme-business/ (Accessed: 6 January 2019).
Akroush, M. N. (2012) ‘Organizational capabilities and new product performance: The role of new product competitive advantage’, Competitiveness Review: An International Business Journal, 22(2), pp. 343–365.
Alexe, G. and Alexe, M. (2016) ‘The importance of the dimensions of innovation management in evaluating the innovation capability of the firms in the machine building industry in Romania’, Procedia Technology, 22, pp. 999–1005. doi: 10.1016/j.protcy.2016.01.127.
Areias, J. S. and Eiriz, V. (2013) ‘Building competitive advantage through inter-organizational projects’, Strategic Direction, 29(9), pp. 31–34. doi: 10.1108/SD-08-2013-0057.
Aribi, A. and Dupouët, O. (2015) ‘The role of organizational and social capital in the firm’s absorptive capacity’, Journal of Knowledge Management, 19(5), pp. 987–1006. doi: 10.1108/JKM-05-2015-0169.
Arnold, E. and Thuriaux, B. (1997) ‘Developing firm’s technological capabilities’, Technopolis Ltd, pp. 1–42. Available at: http://technopolis.keymedia.info/resources/downloads/reports/094_Capabilities_970707.pdf.
Asante, J., Kissi, E. and Badu, E. (2018) ‘Factorial analysis of capacity-building needs of small- and medium-scale building contractors in developing countries: Ghana as a case study’, Benchmarking: An International Journal, 25(1), pp. 357–372. doi: http://dx.doi.org/10.1108/MRR-09-2015-0216.

ATPC (2017) African Continental Free Trade Area: Questions and Answers. Addis Ababa.
Baark, E. et al. (2011) ‘Innovation sources, capabilities and competitiveness: Evidence from Hong Kong firms.’, in DIME Final Conference. Maastricht, pp. 1–40. Available at: http://final.dime-eu.org/files/Baark_Lau_Lo_Sharif_E5.pdf.
Barney, J. B. and Clark, D. N. (2007) Resource-based theory: Creating and sustaining competitive advantage. Oxford University Press on Demand.
Bennett, R. J. and Smith, C. (2002) ‘Competitive conditions, competitive advantage and the location of SMEs’, Journal of Small Business and Enterprise Development, 9(1), pp. 73–86. doi: 10.1108/14626000210419509.
Bhatnagar, J. (2006) ‘Measuring organizational learning capability in Indian managers and establishing firm performance linkage’, The Learning Organization, 13(5), pp. 416–433. doi: http://dx.doi.org/10.1108/TLO-05-2013-0024.
Boachie-Mensah, F. and Issau, K. (2015) ‘market orientation and the performance of small and medium-sized manufacturing enterprises in the Accra metropolis’, International Journal of Marketing Studies, 7(3), pp. 39–52. doi: 10.5539/ijms.v7n3p39.
Cincera, M., Czarnitzki, D. and Thorwarth, S. (2011) ‘Efficiency of Public Spending in Support of R&D Activities’, Reflets et perspectives de la vie économique, 50(1), pp. 131–139. doi: http://dx.doi.org/10.3917/rpve.501.0131.
Clements, M. D. (2010) ‘Building learning capability: Enhancing the learning talent chain by connecting environments’, Development and Learning in Organizations: An International Journal, 24(1), pp. 7–9. doi: 10.1108/14777281011010442.
Creswell, J. W. (2012) Educational Research: Planning, Conducting, and Evaluating Quantitative and Qualitative Research. 4th edn, Educational Research. 4th edn. doi: 10.1017/CBO9781107415324.004.
Day, G. S. (1994) ‘The Capabilities of Market-Driven Organizations’, Journal of Marketing, 58(4), pp. 37–52. doi: 10.2307/1251915.
Edwards, T., Delbridge, R. and Munday, M. (2001) Linking Innovative Potential to SME Performance: An Assessment of Enterprises in Industrial South Wales. P.
Eisenhardt, K. M. and Martin, J. A. (2000) ‘Dynamic capabilities: What are they?’, Strategic Management Journal, 21, pp. 1105–1121.
Farrokhian, R. and Soleimani, F. (2015) ‘Assessing capabilities for innovation - The case of Iranian kalleh meat product company’, in International Conference on Operation Excellence and Service Engineering, pp. 23–32.
Ferraresi, A. A. et al. (2012) ‘Knowledge management and strategic orientation: Leveraging innovativeness and performance’, Journal of Knowledge Management, 16(5), pp. 688–701. doi: 10.1108/13673271211262754.
Garcés-Galdeano, L., García-Olaverri and Emilio, H. (2016) ‘Management capability and performance in Spanish family firms’, Academia Revista Latinoamericana de Administración, 29(3), pp. 308–325.
Goh, S. C. (2003) ‘Improving organizational learning capability: Lessons from two case studies’, The Learning Organization, 10(4), pp. 216–227. doi: 10.1108/09696470310476981.
Hailekiros, G. S. and Renyong, H. (2016) ‘The effect of organizational learning capability on firm performance : Mediated by technological innovation capability’, European Journal of Business Management, 8(30), pp. 87–95.
Hair, J. F. et al. (2017) A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM). Second Edi, Development. Second Edi. Los Angeles London New Delhi Singapore Washington DC Melbourne: Sage publications.
Halac, D. S. (2015) ‘Multidimensional construct of technology orientation’, Social and Behavioral Sciences. Elsevier B.V., 195(1), pp. 1057–1065. doi: 10.1016/j.sbspro.2015.06.149.
Han, J. K., Kim, N. and Srivastava, R. K. (1998) ‘Market orientation and organizational performance: Is innovation a missing link?’, Journal of Marketing, 62(4), pp. 30–45. doi: 10.2307/1252249.
Ibrabim, N. M. N. (2016) Moderating and Mediating Roles of Human Capital and Competitive Advantage on Entrepreneurial Orientation, Social Network, and Performance of SMES in Nigeria. Universiti Utara Malaysia.
Iddris, F. (2016) ‘Innovation capability : A systematic review and research agenda’, Interdisciplinary Journal of Information, Knowledge, and Management, 11, pp. 235–260.
Juho-Petteri, H. et al. (2010) ‘Market Orientation, Innovation Capability and Business Performance: Insights From Different Phases of the Business Cycle’, Journal of Marketing Research, pp. 1–10.
Jurisch, M. C. et al. (2014) ‘Which capabilities matter for successful business process change?’, Business Process Management Journal, 20(1), pp. 47–67. doi: http://dx.doi.org/10.1108/MRR-09-2015-0216.
Kachouie, R., Mavondo, F. and Sands, S. (2018) ‘Dynamic marketing capabilities view on creating market change’, European Journal of Marketing, 52(5/6), pp. 1007–1036. doi: http://dx.doi.org/10.1108/MRR-09-2015-0216.
Kamboj, S. and Rahman, Z. (2017) ‘Market orientation, marketing capabilities and sustainable innovation: The mediating role of sustainable consumption and competitive advantage’, Management Research Review, 40(6), pp. 698–724.
Kamukama, N. (2013) ‘Intellectual capital: company’s invisible source of competitive advantage’, Competitiveness Review: An International Business Journal, 23(3), pp. 260–283. doi: 10.3389/fnagi.2014.00289.
Kocak, A., Carsrud, A. and Oflazoglu, S. (2017) ‘Market, entrepreneurial, and technology orientations: Impact on innovation and firm performance’, Management Decision, 55(2), pp. 248–270. doi: http://dx.doi.org/10.1108/1355255091096791.
Kor, Y. Y. and Mesko, A. (2013) ‘Dynamic Managerial Capabilities: Configuration and Orchestration of Top Executives Capabilities and Firm’s Dominant Logic’, Strategic Management Journal, 51, pp. 233–244. doi: 10.1002/smj.
Lam, V. M. Y., Poon, G. K. K. and Chin, K. S. (2006) ‘The link between organizational learning capability and quality culture for total quality management: A case study in vocational education’, Asian Journal on Quality, 7(1), pp. 195–205. doi: http://dx.doi.org/10.1108/MRR-09-2015-0216.
Lindström, J., Samuelsson, S. and Hägerfors, A. (2010) ‘Business continuity planning methodology’, Disaster Prevention and Management, 19(14), pp. 243–255.
Longenecker, C. O. and Ariss, S. S. (2002) ‘Creating competitive advantage through effective management education’, Journal of Management Development, 21(9), pp. 640–654. doi: http://dx.doi.org/10.1108/MRR-09-2015-0216.
Lubango, L. M. (2015) ‘When can strong patent regimes boost countries’ stocks of inventions and related trade? An analytical model tested in Brazil, Egypt, Nigeria and South Africa in the energy, environment and pharmaceuticals and related sectors’, Technology in Society. Elsevier Ltd, 42, pp. 150–159. doi: 10.1016/j.techsoc.2015.05.001.
Ma, H. (2002) ‘Competitive advantage: What’s luck got to do with it?’, Management Decision, 40(6), pp. 525–536. doi: 10.1108/00251740210433927.
Mahmoud, A. M. and Yusif, B. (2012) ‘Market orientation, learning orientation and the performance of non-profit organizations (NPOs)’, International Journal of Productivity and Management, 61(6), pp. 624–652. doi: http://dx.doi.org/10.1108/MRR-09-2015-0216.
Mahmoud, M. A. (2011) ‘Market Orientation and Business Performance Among SMEs in Ghana’, International Business Research, 4(1), pp. 241–251. doi: 10.5539/ibr.v4n1p241.
Mahoney, J. T. (1995) ‘The management of resources and the resource of management’, Journal of Business Researc, 33(1), pp. 91–101.
Mahoney, J. T. and Pandian, J. R. (1992) ‘The resource based view within the conversation of strategic management’, Strategic Management Journal, 13(5), pp. 363–380. doi: 10.1002/smj.v13.
Mavondo, F. T., Chimhanzi, J. and Stewart, J. (2005) ‘Learning orientation and market orientation: Relationship with innovation, human resource practices and performance’, European Journal of Marketing, 39(11/12), pp. 1235–1263. doi: 10.1108/03090560510623244.
Meier, M. et al. (2004) ‘The impact model for innovation success and its assessment’, Technology Management.
Narver, J. C. and Slater, S. F. (1990) ‘The Effect of Market Orientation on Business Profitability’, Journal of Marketing, pp. 20–35.
Obayi, R. et al. (2017) ‘Improving retail supply flexibility using buyer-supplier relational capabilities’, International Journal of Operations & Production Management, 37(3), pp. 343–362. doi: http://dx.doi.org/10.1108/MRR-09-2015-0216.
Oluwatobi, S. O. (2015) ‘Innovation-driven economic development model: A way to enable competitiveness in Nigeria’, Advances in Sustainability and Environmental Justice, 17, pp. 197–218. doi: 10.1108/S2051-503020150000017017.
Oyelaran-Oyeyinka, B. and Abiola Adebowale, B. (2012) ‘University-industry collaboration as a determinant of innovation in Nigeria’, Institutions and Economies, 4(1), pp. 21–46. Available at: http://www.scopus.com/inward/record.url?eid=2-s2.0-84884161520&partnerID=tZOtx3y1.
Passemard, D. and Kleiner, B. H. (2000) ‘Competitive advantage in global industries’, Management Research News, 23(7–8), pp. 111–117. doi: 10.1108/01409170010782307.
Pham, T. S. H., Monkhouse, L. Le and Barnes, B. R. (2017) ‘The influence of relational capability and marketing capabilities on the export performance of emerging market firms’, International Marketing Review, 34(5), pp. 606–628.
Pilar Jerez Gómez, J. J., Lorente, C. and Cabrera, R. V. (2004) ‘Training practices and organisational learning capability: Relationship and implications’, Journal of European Industrial Training, 28(2/3/4), pp. 234–256. doi: http://dx.doi.org/10.1108/MRR-09-2015-0216.
Porter, M. E. (1985) Competitive advantage: creating and sustaining superior performance. New York: New York: FreePress,.
Prahalad, C. K. and Hamel, G. (1994) ‘Strategy as a field of study : Why search for a new paradigm ?’, Strategic Management Journal, 15, pp. 5–16.
Radwan, I. and Pellegrini, G. (2010) Knowledge, Productivity and Innovation in Nigeria: Creating a New Economy. Washington DC.
Rezaei-Zadeh, M. and Darwish, T. K. (2016) ‘Antecedents of absorptive capacity: A new model for developing learning processes’, The Learning Organization, 23(1), pp. 77–91. doi: http://dx.doi.org/10.1108/TLO-05-2013-0024.
Rodríguez-Díaz, M. and Espino-Rodríguez, T. F. (2006) ‘Developing relational capabilities in hotels’, International Journal of Contemporary Hospitality Management, 18(1), pp. 25–40. doi: 10.1108/09596110610641957.
Rugraff, E. (2012) ‘The new competitive advantage of automobile manufacturers’, Journal of Strategy and Management, 5(4), pp. 407–419.
Saeedi, M. R., Dadfar, H. and Brege, S. (2014) ‘The impact of inward international licensing on absorptive capacity of SMEs’, International Journal of Quality and Service Sciences, 6(2/3), pp. 164–180. doi: http://dx.doi.org/10.1108/MRR-09-2015-0216.
Salisu, B., Abu Bakar, J. L. and Abdul Rani, S. H. (2017) ‘A proposed model of innovation as a mechanism for SMEs success in Nigeria.’, Asian Journal of Multidisciplinary Studies, 5(12), pp. 37–42.
Saunila, M. (2016) ‘Innovation capability for SMEs success: Perspectives of financial and operational performance in SMEs’, International Journal of Productivity and Performance Management Performance, 65(2), pp. 162–176.
Shin, S. and Aiken, K. D. (2012) ‘The mediating role of marketing capability: Evidence from Korean companies’, Asia Pacific Journal of Marketing and Logistics, 24(4), pp. 658–677. doi: http://dx.doi.org/10.1108/02683940010305270.
Slater, S. F. and Narver, J. C. (2000) ‘The Positive Effect of a Market Orientation on Business Profitability’, Journal of Business Research, 48(1), pp. 69–73. doi: 10.1016/S0148-2963(98)00077-0.
Sok, P. et al. (2017) ‘Linking entrepreneurial orientation and small service firm performance through marketing resources and marketing capability: A moderated mediation model’, Journal of Service Theory and Practice, 27(1), pp. 231–249. doi: http://dx.doi.org/10.1108/MRR-09-2015-0216.
Sorooshian, S. et al. (2010) ‘Effect analysis on strategy implementation drivers’, Human Resource Management, 11(10), pp. 1255–1261.
Teece, D. (1992) ‘Competition, Cooperation, and Innovation. Organizational Arragements for Regimes of Rapid Technological Progress’, Journal of Economic Behaviour & Organization, 18(1/25), pp. 447–474.
Tollin, K. and Schmidt, M. (2015) ‘Marketing’s contribution from the perspective of marketing executives’, Marketing Intelligence & Planning, 33(6), pp. 1047–1070. doi: 10.1108/02634501011078138.
Verona, G. (Universita B. (1999) ‘A resource-based Vvew of product development’, Academy of Management Review, 24(1), pp. 132–142. doi: 10.2307/259041.
Wasike, S., Ambula, R. and Kariuki, A. (2016) ‘Top management team characteristics, strategy implementation, competitive environment and organizational performance’, International Journal of Economics, Commerce and Management, IV(6), pp. 601–618.
Wieland, A. and Wallenburg, C. M. (2013) ‘The influence of relational competencies on supply chain resilience: A relational view’, International Journal of Physical Distribution & Logistics Management, 43(4), pp. 300–320. doi: http://dx.doi.org/10.1108/02683940010305270.
Yauri, S. A. (2012) ‘The patent system in Nigeria’, World Patent Information, 34(3), pp. 213–215. doi: 10.1016/j.wpi.2012.04.004.
Yusr, M. M. (2016) ‘Innovation capability and its role in enhancing the relationship between TQM practices and innovation performance.’, Journal of Open Innovation: Technology, Market, and Complexity. Journal of Open Innovation: Technology, Market, and Complexity, 2(6), pp. 1–15. doi: 10.1186/s40852-016-0031-2.
Zawislak, P. A. et al. (2012) ‘Innovation capability: From technology development to transaction capability’, Journal of Technology Management and Innovation, 7(2), pp. 14–25. doi: 10.4067/S0718-27242012000200002.
Published
2019-05-13
How to Cite
Salisu, Y., & Julienti, L. (2019). Toward Enhancing Sustainable Competitive Advantage of Small and Medium Enterprises in Developing Economies of Africa: A Confirmatory Analysis. International Journal of Entrepreneurial Research, 2(2), 1-7. https://doi.org/10.31580/ijer.v2i2.898
Section
Articles