Factors Determining the Competitive Strategic Positions of the SMEs in Asian Developing Nations: Case Study of SMEs in the Agricultural Sector in Sri Lanka

JMSB Jayasundara,Sisira Kumara Naradda Gamage,BDTN Senarath,EMS Ekanayake,JMHM Upulwehera,GAKNJ Abeyrathne,PSK Rajapakshe,RPIR Prasanna

doi:10.3390/economies9040193

JMSB Jayasundara, Sisira Kumara Naradda Gamage

Open Access

https://doi.org/10.3390/economies9040193

Copy DOI

Abstract

Economic globalization has rapidly intensified the competition among businesses. Therefore, it is pivotal that SMEs follow competitive strategic positions and adopt strategic methods in order to confront the various challenges in this era. This study assessed the factors that determine the competitive strategic position of SMEs in the developing nations of Asia by considering the agro-based SMEs in Sri Lanka as a case study. By using primary data of 463 SMEs, the study estimated a binary logistic regression model to deal with the research subject. The findings revealed seven significant strategic variables: innovation in product and marketing, business exhibition in the local setting, gender, strategic market location, sustainable business practices, marketing efficiency, and business reputation and superior services. Moreover, the study identified and commented on seven insignificant variables: specialization in production, experience in the business field, experience in attending business exhibitions at overseas setting, credit market accessibility, provision of high-quality products, research and development, and strategic firm location, which are relevant in developed countries. Therefore, the government and policymakers must initiate measures to establish a more favorable business environment for SMEs to gain competitive advantage from these variables in the near future to permit an ameliorated and strong SME sector in Sri Lanka.

Highlights

Economic globalization involves a broad range of opportunities, procedures, and problems related to spreading economic activities among countries worldwide (Pyle 2001).Globalization is the diminution or elimination of state-enforced restrictions on exchanges across borders and is the increasingly integrated and complex global system of production and exchange which emerged as a result (Palmer 2002)
This study focused on the Small and Medium Enterprises (SMEs) in Sri Lanka to identify the factors determining the strategic competitive positions of the SME sector in the developing Asian nations
Even though some institutes like the District Chamber of Commerce are involved in organizing foreign tours to visit exhibitions, the study results revealed that such measures are insufficient to cause a significant effect on the subject

Summary

Introduction

Economic globalization involves a broad range of opportunities, procedures, and problems related to spreading economic activities among countries worldwide (Pyle 2001).Globalization is the diminution or elimination of state-enforced restrictions on exchanges across borders and is the increasingly integrated and complex global system of production and exchange which emerged as a result (Palmer 2002). As Mundim et al (2000) emphasized, world economic globalization is recogized as a remarkable source of opportunities and threats for economic activities. This has positive and negative effects on the business world. Nistor (2007) suggested that globalization creates positive opportunities like giving the opportunity for emerging nations to develop in a rapid growth due to their ability to access new technologies, information, direct investments and loans, products, and the high mobility of all production factors. Mago et al (2013) elaborated that globalization creates interdependence between countries, which can have a negative impact as depression in one economy can impact the economies of other countries

Objectives

Methods

Results

Conclusion