Abstract
Value proposition can be an important source of competitive advantage for small and medium sized enterprises (SMEs). Unlike large companies which follow a rational and sequential process, developing a value proposition in an SME is instead a trial and error process. Therefore, those companies are experimenting with various options. The purpose of this paper was to identify the value strategies used by SMEs based on value dimensions and attributes and to find specific groups of SMEs with a similar market approach. We present a theoretical framework on customer value creation and customer value communication, followed by a quantitative research on 399 Romanian SMEs. We used a principal component analysis to reduce the number of choices and afterwards we ran a cluster analysis to identify the distinct groups of SMEs using specific value propositions. We found that there are three major strategic options based on customer experience, affordability and customization, and four distinct clusters: customer delight (A), multiple sources of differentiation (B), one-to-one marketing (C) and cost—effectiveness (D). Three groups use distinct value propositions—A focuses on customer experience, C on customization, D on affordability—while B mixes all of them.
Highlights
Small and medium sized enterprises (SMEs) are a major player in the economy, an important creator of new jobs, a generator of added value, a significant participant in value chains, a player with potential in international markets and an agent of innovation
Research results indicate the existence of nine value attributes used by small and medium sized enterprises (SMEs) in order to achieve their marketing positioning objectives, develop a favorable image in the business environment and gain competitive advantages
It validates Treacy and Wiersema [26] value disciplines, proving that these three strategic options—product leadership, operational excellence and customer intimacy—are universal alternatives used by all types of enterprises
Summary
Small and medium sized enterprises (SMEs) are a major player in the economy, an important creator of new jobs, a generator of added value, a significant participant in value chains, a player with potential in international markets and an agent of innovation. The importance of SMEs differs from country to country. In the EU, SMEs represent 99.8% of all companies, employ 65% of the workforce and generate 53% of total turnover [2]. In Romania, SMEs constitute 99.7% of total enterprises, hire 65% of employees and generate 58% of turnover [3]. Significant differences are recorded in the three important dimensions of competitiveness, namely internationalization, innovation and environmental approach [4]. If in the EU almost 10% of SMEs are engaged in extra-EU exports, less than 5% of Romanian SMEs perform such activities
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