Competitive Strategy Orientation and Market Orientation for Product Innovative Success in Ethiopian SMEs

Abstract

This empirical study aims into how market orientation and competitive strategy orientation affect the success of innovative products in small and medium-sized Ethiopian businesses. Small and medium-sized businesses are essential to economic growth, especially in developing nations like Ethiopia, where they are the main drivers of local development and the generation of jobs. However, these companies face significant challenges including scarce resources and volatile markets, necessitating the use of tactical approaches to preserve their competitiveness and foster growth. A mixed-methods approach was used in this cross-sectional study, with 396 respondents completing self-administered questionnaires for the quantitative data and semi-structured open-ended interviews for the qualitative data. The analysis was conducted using SPSS and the AMOS app. The findings show both an increase in competitive strategy orientation and market orientation results in an increase product inventive success, and also, an increase in product innovative success results in an increase in both market share and financial performance. The study also demonstrates the noteworthy and indirect positive relationships that market orientation and competitive strategy orientation have on market share and financial success. The outcomes showed how crucial these strategic orientations are to the capacity of Ethiopian SMEs to innovate, overcome challenges, preserve their competitiveness, and promote economic growth. The study emphasizes how important it is for Ethiopian SMEs to have a competitive strategy orientation that is in line with their market orientation in order to successfully innovate new products. Businesses can better respond to market needs and competitive pressures and promote innovation by utilizing insights from competitive analysis and market research, by offering insightful guidance on enhancing innovation and competitiveness in the Ethiopian context, as well as practical pointers for SME leaders and policymakers, this study fills a vacuum in the literature.