Competitive Advantage in Smes: Towards a Conceptual Framework

Competitive advantage arises from the variousactivities a firm performs in designing, producing, marketing, delivering, andsupporting its product. A conceptual model of competitive advantage in smallfirms is constructed, drawing on current research in strategy andcompetitiveness in small and medium sized enterprises (SMEs). One of the components of the model is the change agent (intrapreneur), whomust have the necessary interpersonal skills to build both internal andexternal networks of knowledgeable contacts.The intrapreneur's willingness toforge external links will afford the firm better communication with customers,suppliers, and competitors.Internal connections allow the intrapreneur todisseminate new information throughout the organization. Because small organizations have the distinct advantage of being able torespond to changes in the marketplace more quickly than their largercompetitors, employees must be willing to develop new skills, while managersmust recruit and reward staff in a way that facilitates innovation. For SMEs, innovations that lead to competitive advantage take the form ofincremental product improvements based on ideas adopted from customers,competitors, and suppliers.Organizational flexibility is integral to mostSMEs' achievement of competitive advantage. (SAA)