Survival in fast-changing markets: Small-firm strategy, market development and product innovation

Abstract

Purpose

The purpose of this paper is to find out if the approach to strategy-making taken by small to medium-sized enterprises (SMEs) affects their performance.

Design/methodology/approach

This paper reports findings from a longitudinal study of small Austrian manufacturing firms. It investigates their use of deliberate or emergent strategy-making and how this affected market development and product innovation.

Findings

When you think about strategy development, perhaps you think of long, serious discussions between groups of managers. But what if the organization is a small business? Leaders of SMEs do not have that option. So if an SME starts a new initiative – product development, say, or a change of marketing approach – how does this happen? Is it planned by the entrepreneur? Or – if you do not have middle managers with time to spend on strategy development – does adopting a “try it and see” approach give better results?

Research limitations/implications

It demonstrates the benefits of a longitudinal investigation of the performance effects of deliberate and emergent strategy development.

Practical implications

It shows how the use of emergent or deliberate approaches to strategy development is linked to SME performance.

Social implications

It highlights the benefits of using diverse information sources – including customers and employees – as an integral part of strategy-making to identify market opportunities and trends.

Originality/value

It covers an unusually long time period, enabling researchers to compare firm performance in stable and dynamic market conditions.

Citation

(2015), "Survival in fast-changing markets: Small-firm strategy, market development and product innovation", Strategic Direction, Vol. 31 No. 1, pp. 18-20. https://doi.org/10.1108/SD-12-2014-0163