Knowledge-intensive Business Services Firms Research Articles

Contrasting innovation dynamics of professional-technological knowledge intensive business services in metropolitan areas

Formulation of the problem. The study examines knowledge-intensive business services (KIBS) firms' capability to access, process, and transform information into innovation. KIBS are defined as facilitators, carriers of knowledge, and sources of innovation for other sectors. KIBS play an important role in the production, use, and transfer of knowledge to the manufacturing sector. KIBS activities do not demonstrate a uniform structure within themselves, so a dual classification as professional services (P-KIBS) and technological services (T-KIBS) based on functioning and input has been developed. KIBS activities are concentrated in large cities. Major cities or capitals have well-developed infrastructure, public administration centers, advanced social activities, and numerous research institutes and universities. All of them attract a highly skilled population. Regarding metropolitan city economic growth, KIBS stand out because of their high added value, high income, high innovation returns, and high financial capacity, and they contribute to development. The purpose. The present study aims to reveal the innovative capacities and dynamics of P-KIBS and T-KIBS firms operating in the metropolitan area of Ankara, Turkey's capital city. To reach this aim, Turkey's capital city Ankara is analyzed by using the results of a questionnaire applied to 410 small and medium-sized (SMEs) KIBS firms, 146 of which are P-KIBS firms and other 264 are T-KIBS firms. Methods. In the course of the research and preparation of the article, the authors used several scientific methods, both philosophical and general scientific, as well as specific scientific methods. In particular, the methods of analysis and synthesis, induction and hypothetical-deductive method, mathematical-statistical and spatial analysis, methods of grouping and classification, questionnaires and surveys, etc., were used. The results. There are notable differences between the P-KIBS and T-KIBS firms, considering their spatial distribution patterns and the dynamics of their innovation processes. The spatial distribution patterns of the KIBS firms were revealed. While T-KIBS activities demonstrate a spatial clustering tendency independent of the CBD, the P-KIBS firms prefer to locate within the CBD or its vicinity. KIBS sectors generally prefer to be situated by high-income residents, new settlements, secure and prestigious areas close to large public institutions such as ministries and general directorates. It was revealed that the T-KIBS firms are most densely located in the CBD and newly developing business districts of Balgat and Söğütözü, and in the Technology Development Zones of Ankara. P-KIBS firms, on the other hand, are more widely spread in the Çankaya and Yenimahalle districts. It was found that advances in information and communication technologies have a varied impact on the location selection preferences of P-KIBS and T-KIBS enterprises. According to the research results, the factors influencing the clustering of P-KIBS companies and T-KIBS firms were identified and determined. There is a significant relationship between the innovative P-KIBS and T-KIBS firms and their collaboration with other institutions. As a result of the the study, it has been determined that there is a significant relationship between collaboration, R&D, intrafirm and extrafirm social relationships on the innovation of KIBS firms and also contrasting innovation dynamics related to different classes of KIBS in metropolitan areas.

The dark side of KIBS agency, the creative economy, and regional sustainability

This contribution develops critique from analysing forms of misconduct by knowledge-intensive business services (KIBS) firms, especially the largest, globally located and client-interactive on all five continents. Management consultancy infractions range from supplying spurious advice, to advising clients on fraudulent practice, to acting complicitly in corrupt government practices, including engaging in ‘state capture’ by channelling internal state revenue into private holding bank accounts. Because the litany of misconduct is too massive for encompassing in a single contribution, and in the spirit of this task, the spotlight is only on a few cases that represent typical ‘creative economy’ companies contracted to ‘Big 3′ P-KIBS (Professional KIBS) corporations. Of importance to open innovation’s critical edge, the contribution articulates the puzzle of why academic KIBS research has presented the field without comment on its ‘dark’ side, questioning ‘leadership’ and ‘agency’ ‘observer’ and ‘confirmation bias’. For interpretation of data discovery, we utilise evolutionary ‘pattern recognition’ methodology set within an evolutionary theoretical framework.

How does digital transformation affect innovation in knowledge-intensive business services firms? The moderating effect of R&D collaboration portfolio

PurposeFirms are driven to ride on the digital wave in today’s open innovation ecosystem. This study aims to explore the effect of digital transformation (DT) on knowledge-intensive business services (KIBS) firms’ innovation ambidexterity, namely, radical versus incremental innovation, respectively. Meanwhile, the authors evaluated the moderating role of the complexity of R&D collaboration portfolio (i.e. organizational diversity and geographic diversity) in the above relationships.Design/methodology/approachUsing a panel data set of 171 Chinese listed firms in the information and communications technology services industry from 2010 to 2018, the proposed hypotheses were empirically attested.FindingsIt is found that DT has a positive relationship with radical innovation and an inverted U-shaped relationship with incremental innovation. In terms of the R&D collaboration portfolio, organizational diversity positively moderates the relationships between DT and innovation ambidexterity, respectively. The geographic diversity weakens the inverted U-shaped effect of DT on incremental innovation; however, its moderating role in the link between DT and radical innovation is not empirically verified.Originality/valueExtant scholars mainly addressed the interplay between KIBS firms and their manufacturing clients, while this study reveals the different consequences of DT on KIBS firms’ innovation ambidexterity to highlight the role of KIBS firms is an independent and essential innovator in a knowledge-driven economy. Notably, the findings contribute to knowledge management (KM) and R&D literature by confirming the diversity of the R&D collaboration portfolio is a critical KM strategy for KIBS firms to develop and promote external knowledge resources.

Evaluating the Effects of Information Sources on Innovation Outcomes: Are There Differences between KIBS and Manufacturing Firms from a Latin America Country?

AbstractThe aim of this paper is analysing the relationships between sources (internal/external) of information and innovation outcomes (product, service and process) in Peruvian companies. Furthermore, we explore differences and similarities in these relationships when comparing manufacturing firms and knowledge-intensive business services (KIBS) firms. This study presents evidence based on the application of a logit model to a sample of 1141 Peruvian companies, comprising 830 manufacturing firms and 311 KIBS firms. Despite the fact that Peruvian companies do not tend to turn to external sources of information or invest in internal R&D activities, we find positive relationships between sources of information and innovation outcomes in both manufacturing firms and KIBS firms—predominantly process innovation in both cases, followed by product (goods) innovation for manufacturing firms and service innovation for KIBS. Our findings indicate that not all external sources of information have positive effects on product, service and process innovation. Thus, managers should consider proper management of the company’s external relations in order to take advantage of these relationships. Moreover, policymakers should promote interrelationships between the actors in the innovation system (e.g., companies, research centres, universities, etc.) thereby generating opportunities for innovation. This paper provides evidence that the configuration of sources of information (especially internal R&D) plays a significant role in innovation outcomes in both manufacturing firms and KIBS firms, specifically in the context of Latin American countries.

Digital servitization journey in small- and medium-sized enterprises: the contribution of knowledge-intensive business firms

PurposeThis study aims to investigate the contribution of knowledge-intensive business services firms to small- and medium-sized manufacturers’ digital servitization journeys, addressing the standardization versus customization dichotomy of services and solutions provision.Design/methodology/approachTo identify the challenges that small- and medium-sized firms must face in the digital servitization journey and the role that knowledge-intensive business services firms may play in the innovation processes, the authors conduct a review on two still unrelated literature streams and develop a longitudinal single-case study, with a particular focus on knowledge generation mechanisms.FindingsDigital servitization is a particularly challenging transformational journey for minor firms. Knowledge-intensive business services firms can act as sources, facilitators, and carriers of knowledge, and they can orchestrate further contributions of other external partners and firms.Research limitations/implicationsThe paper contributes to theory describing the roadmap and the role of external service providers in digital servitization journeys of smaller firms’, that are frequently excluded from mainstream research although being the backbone of European economies.Practical implicationsDigital servitization in minor manufacturing firms requires a long-term orientation and a multi-stage roadmap. Mixing standardized technology-based solutions and complementary professional services, knowledge-intensive business services firms can significantly contribute to lowering the journey’s uncertainties, operational complexity, and costs.Originality/valueThe paper sheds lights on how the collaboration between knowledge-intensive business services firms and small manufacturers generates novel knowledge and capabilities that contribute to takle the challenges of the different stages of the digital servitization roadmap.

Knowledge intensive business service (KIBS) firms' use of visualization for customer participation and knowledge sharing during the service process

Customer participation is central to the service production and delivery processes of knowledge intensive business service firms. The customer can provide knowledge, effort, and decisions on problems and solutions, but the often intangible and abstract service offerings and discussions can be challenging. Recent research suggests that visualization can help customers understand service offerings and support productization, but the critical link between customer participation and visualization has yet to be researched. This paper explores this link through a qualitative study based on in-depth interviews with twenty-five service representatives from nine Danish advertising agencies. We develop a framework that describes four customer participation activities focused on visualization. In two activities, probing (the problem) and selecting (the solution), the visualization acts as a cue for the service providers' and customers' knowledge sharing. In mapping (the problem) and exploring (the solution), the visualization acts as a manifestation of the KIBS firm and customer knowledge sharing. The research shows that the application of the activities varies across projects depending on the contextual factors of tasks and customer relations. KIBS firms benefit from applying more visualization activities throughout the service process when dealing with complicated tasks and new customers, compared to simple tasks and existing customers.

Ambiguity and Knowledge Asymmetry in Knowledge-Intensive Projects— The Case of Enterprise System Implementations

Background: This research aimed to examine the interrelations between ambiguity and knowledge asymmetry in Enterprise System implementation projects and determine how ambiguity and knowledge asymmetry affect the management of such projects. Enterprise System projects are a subgroup of knowledge-intensive business service projects. Literature regarding knowledge-intensive business service firms acknowledges ambiguity and knowledge asymmetry between the supplier and the client as essential characteristics of their relationship. However, insufficient empirically grounded research has been made to date to determine the interrelations between the two phenomena and their impact on the project management of knowledge-intensive projects. Method: The research was based on a multiple case study method. Five cases of Enterprise System implementation projects were selected using literal replication until theoretical saturation was achieved. Data collection methods involved participant observation and analysis of documentation. Results: Knowledge asymmetry was identified as a factor significantly increasing ambiguity in the projects subject to this study. As the project parties had different knowledge bases, the information transmitted by the sending party could not be appropriately interpreted by the receiving party. Co-production, i.e., joint synchronous work of the client and the consultant, was the means to overcome knowledge asymmetry and ambiguity. The phenomenon of problem-solution entanglement was also observed: the proposed solutions impacted the definition of the problems and vice-versa, which led to a revision and revisiting of problems considered to be already solved. Conclusion: This research showed that knowledge asymmetry and resulting ambiguity had consequences for project definition, contracting, planning, and execution. Due to different knowledge bases, project parties could not interpret the information they received correctly. Therefore, synchronous work, resulting in an incremental reduction of knowledge asymmetry and ambiguity as well as constant reconciliation, revision and revisiting of problems and solutions, were necessary during the whole project life-cycle.

The interplay between KIBS and manufacturers: a scoping review of major key themes and research opportunities

ABSTRACT Knowledge-intensive business services (KIBS) collaborate with manufacturers to increase their knowledge, stimulate innovation, and support the implementation of service-oriented business models. In addition, KIBS firms are also known to stimulate regional economic development. Hence, this study aims to identify the key research themes and future opportunities in the literature addressing the interplay between KIBS and manufacturers. A scoping review was adopted to map key themes in the KIBS and manufacturing literature. A sample of 76 focal articles was analyzed using descriptive and thematic analyses. Results of the scoping review are presented consolidating three categories of analysis: (i) mechanisms of connections between KIBS and manufacturers, such as value co-creation, knowledge transfer, innovation, and servitization, (ii) results at firm-level, such as competitiveness, organizational and financial performance (iii) results at regional-level, such as economic development, KIBS agglomeration, and public policies. An agenda for future research is proposed.

The new concept of quality in the digital era: a human resource empowerment perspective

PurposeThis study aims to identify the drivers of human resource empowerment in understanding the new concept of Quality 4.0 in the digital era.Design/methodology/approachFirst, the literature of quality management evolution in the fourth industrial revolution (Industry 4.0) and the position of the required workforce in Quality 4.0 were reviewed and then by using the opinions of experts and managers of Knowledge-Intensive Business Services (KIBS) firms, a set of driver effects on the readiness and ability of human resources was identified in the context of Quality 4.0. After identifying the drivers, cause-and-effect relationships among these drivers were investigated using the Grey DEMATEL technique.FindingsA total of 29 Quality 4.0 drivers of readiness and workforce ability were identified, based on multiple interactions of quality management in different stages of the production cycle. They were divided into new valuation approaches, composite dimensions, team creativity and thorough inspection. “Technical abilities and capability to solve problems” was identified as the most significant driver.Practical implicationsFindings help KIBS firms to take necessary measures and plans. Consequently, they can increase the readiness and ability of human resources based on the changes in managing Quality 4.0. Also, considering the importance of each driver, they will be able to take a step towards total quality improvement.Originality/valueDespite extensive research on the subject of the fourth Industrial Revolution, research on the human aspects required for managing Quality 4.0 is limited. This study was performed to examine the cause-and-effect relationships between human resource drivers to adapt to the changes in Quality 4.0.

Productivity dispersion in the Italian knowledge-intensive business services (KIBS) industry: a multilevel analysis

PurposeThis paper aims to provide an analysis of the productivity evolution of a sample of 18,459 knowledge-intensive business services (KIBS) firms operating in Italy over the period 2012–2018. The interaction between productivity heterogeneity firm localization and firm sector of business are also analyzed.Design/methodology/approachThe empirical setting is based on data envelopment analysis (DEA) to measure the multifactor productivity index (MPI) and on the multilevel models to investigate if the source of productivity heterogeneity among the Italian KIBS are due to the geographic location and/or to the specific business sectors in which firms operate. Data have been gathered from the AIDA database, which contains financial data of all Italian firms.FindingsThe empirical results show that MPI heterogeneity in the Italian KIBS firms' is sensitive to the regional context in which firms operate to the specific KIBS sector and above all at the interactions arising between region and sector.Originality/valueThe paper contributes to identify the source of productivity dispersion in the Italian KIBS.

Strategic priorities and competitiveness of businesses operating in different entrepreneurial ecosystems: a benefit of the doubt (BOD) analysis

PurposeThis study evaluates the relationship between the entrepreneurial ecosystem and business competitiveness in four different contexts (i.e. France, Spain, Hungary and Costa Rica).Design/methodology/approachThe study uses a sample of 348 manufacturing and knowledge-intensive business service firms operating in four countries with different entrepreneurial ecosystems (France, Spain, Costa Rica and Hungary) for 2019. Firm competitiveness is computed via the “benefit-of-the-doubt” (BOD) method, and a multilevel model is employed to assess the connection between the entrepreneurial ecosystem and firm competitiveness.FindingsThe results of the multilevel model indicate that the entrepreneurial ecosystem is related to firm competitiveness, while the BOD results suggest that firms operating in settings with a more consolidated entrepreneurial ecosystem are better able to realize the outcomes of strategic choices linked to the exploitation of key resources and capabilities. Country-specific results suggest that “human capital” is the most relevant competitive pillar prioritized by all sampled businesses.Originality/valueThe proposed analysis of the connection between the entrepreneurial ecosystem and business competitiveness in different contexts contributes to the development of the entrepreneurial ecosystem frame by offering insights into how the properties of the entrepreneurial ecosystem (i.e. interactions among individuals, organizations and institutions) can produce economically meaningful effects on business performance.

Innovation, market failures and policy implications of KIBS firms: The case of Trinidad and Tobago's oil and gas sector

Trinidad and Tobago's oil and gas industry is well established and is one of the oldest in the world, which has led to a large and growing number of oil and gas Knowledge Intensive Business Services (KIBS) firms. These firms provide advanced technological or professional knowledge as intensive inputs into the business processes of other organizations. This paper aims to investigate innovation in KIBS firms in the oil and gas sector in Trinidad and Tobago, and to identify market and government failures that hinder their development to inform policy making. The factors that increase KIBS firm's likelihood of introducing an innovation are firm size, age, number of customers, internal research and development, and the use of external information. Moreover, several market failures hinder their potential for innovation and technology diffusion, including information asymmetries, difficulty in obtaining finance, lack of appropriate skills, and limited partnerships/collaboration with research institutions. This study recommends the development of a national innovation policy and program, greater dialogue, and clear communication channels among all industry stakeholders, and the expansion of several existing local policy initiatives, including trade missions and corporate governance programs and training and skills through tertiary educational institutes.

Exploring the interplay between Smart Manufacturing and KIBS firms in configuring product-service innovation performance

Manufacturers that develop product-service innovation (PSI) attend increasingly to two criteria: choosing the right set of technologies to achieve PSI, and choosing how to manage the technologies—that is, whether to manage them internally or through collaboration with knowledge-intensive business service (KIBS) firms. This study argues that manufacturing outcomes for financial and organizational performance depend on the organization's decision whether or not to develop PSI and how the two criteria coexist and interact. To test this hypothesis, a sample of Spanish manufacturing firms was chosen through purposive sampling. A fuzzy-set qualitative comparative analysis (fsQCA) of the data returned two superior manufacturing performance scenarios. One involved pure manufacturers that did not develop PSI and relied entirely on traditional supportive manufacturing technologies. The other involved servitized manufacturers that developed PSI with or without KIBS firms and benefitted from access to larger Smart Manufacturing technologies. This study is novel in affirming the importance of choosing the right set of technologies for manufacturers that embrace service infusion. The study also reaffirms the role of KIBS firms in supporting PSI, while recognising that collaboration with KIBS firms enables firms to benefit from Smart Manufacturing technologies.

Service innovation management in a modern economy: Insights on the interplay between firms’ innovative culture and project-level success factors

Despite the growing importance of the service industry in modern economies, research on service innovation success has been far less prolific than has work on product innovation, and there is still a relative paucity of knowledge about the key factors to achieve new service success. The study of the relationships among these factors has also received very little attention and provides a significant opportunity for theoretical developments and managerial insights in service innovation. In this study, data drawn from a sample of 502 hotels and knowledge-intensive business service firms located in Spain allows testing the relationships among organizational and project-level success factors in new service development. Empirical evidence reveals several routes of effects useful to trigger external new service performance or market success, and internal new service performance, or the satisfaction, motivation, and commitment of front-line employees. Some relevant insights for managers include illustrating the crucial role of service firms’ innovative culture to configure project-level success factors; highlighting the social aspects of top management's support to the new service project; underlying the importance of human resource management practices during new service development for new service success, and the motivating effects that new service advantage has among front-line employees.

Open Innovation Strategies and Appropriability in Knowledge-Intensive Business Services: Evidences and Implications in the Brazilian Context

This paper analyzes open innovation strategies and their implications on appropriability and performance in Knowledge-Intensive Business Services (KIBS) firms which operate in the Brazilian market. This is cross-sectional research relying on the survey method. Data was collected through a questionnaire applied to 345 firms that provide Information Technology (IT) and Business Management Consulting services. Cluster analysis was the main technique employed for data analysis. The results showed that KIBS firms, whose inbound and outbound flows difference is small, eventually use appropriation mechanisms to a greater extent and adopt the selective revealing strategy more intensely. It is concluded that Brazilian KIBS firms adopt inbound knowledge flows more intensely, and that firms herein labelled as “neutral” presented greater appropriation and innovation performance than “externalizing”, “internalizing” or “very internalizing” firms.

The breadth of business model reconfiguration and firm performance

Looking at business models as systems of interdependent elements, we study how the breadth of an incumbent firm’s business model reconfiguration influences its performance. Drawing on the metaphor of firms searching on a performance landscape, we argue that the relationship between business model reconfiguration breadth and performance should form an inverted U-shape. While firms can gain from increasing business model reconfiguration breadth, these benefits need to be traded-off against the increasing complexity of its associated changes. We further predict that this inverted U-shape will flip for highly performing firms while being amplified for firms heavily active in innovation. Using data from an original survey of knowledge-intensive business services firms, we find that, on average, business model reconfiguration has little effect on performance. However, U-shaped effects clearly emerge when accounting for the effects of past performance and innovative activity. Our findings contribute to a better understanding of the conditional nature of the advantages stemming from business model reconfiguration.

Breadth of external knowledge search in service sectors

PurposeThere is a dearth of empirical research on the impact of external knowledge search on innovation performance in different categories of service firms. This study explores the effectiveness of the breadth of external search on product and process innovations in German firms. In particular, the author modelled a non-linear relationship between the breadth of knowledge and product and process innovations.Design/methodology/approachDrawing on the Mannheim Innovation Panel (MIP) data for the German service firms in the period 2014–2016, the author reported findings from a bivariate probit model which took into account mutual interdependence between product and process innovations. Moreover, the model was separately estimated for knowledge-intensive business services (KIBS) and other services. For comparative purposes, the author also estimated the model for manufacturing firms.FindingsEmpirical findings uniformly indicated an inverted U-shaped effect of the breadth of knowledge on both product and process innovations. Furthermore, the results demonstrated that using up to three knowledge sources increases the probability of a joint implementation of product and process innovations. These findings hold for both KIBS firms and other services. However, those service firms that focussed on a single type of innovation experienced diminishing returns to external knowledge when exploiting more than one source of knowledge. These results indicated that a simultaneous introduction of different types of innovation required diverse knowledge sources. In contrast, when focussing on a single type of innovation, service firms experienced diminishing returns when multiple sources were used. However, this finding was only partially found for manufacturing firms. Accordingly, this study’s findings provided support for the demarcation approach, insofar as the breadth of knowledge had a heterogenous impact on innovation in manufacturing relative to service firms.Originality/valuePrevious studies on the breadth of knowledge search mostly examined its influence on innovation performance without separately analysing manufacturing and service firms. The present study focussed on service firms that were further divided into KIBS and other service firms. By investigating potentially non-linear relationships between knowledge breadth and product and process innovations, it illustrated how different innovation strategies were affected by a diverse pool of external knowledge sources.

Analysis of the role of process innovation on export propensity in KIBS and non-KIBS firms in Colombia

PurposeThe purpose of this paper is to analyze the role of the process innovation on export propensity in knowledge-intensive business services (KIBS) firms and non-KIBS firms in Colombia.Design/methodology/approachFor the empirical application, the authors use a unique primary data set drawn from the Global Competitiveness Project (GCP: www.gcp.org) that includes information for 57 Colombian KIBS for 2019. The authors use a binary choice model to test the proposed hypotheses on the relevance of KIBS and process innovation in explaining export propensity.FindingsThe results showed a positive relationship between KIBS and business size with an export propensity, but this relationship is non-meaningful. Also, the findings showed a negative and non-significant relationship between a process innovation and business age with the probability to export. On the other hand, the evidence state that KIBS firms encourage the relationship between propensity to export and process innovation, which is to say that they are highly effective to increase the propensity to export. Finally, the industry increases the probability of export propensity.Originality/valueThis study offers a new insight relating to KIBS, process innovation and their contribution to increasing export propensity. The findings of this paper offer relevant information to government policymakers to design strategies that promote export activity in Colombia.

Does distance really matters? Assessing the role of KIBS proximity in firm´'s servitization capacity: evidence from the Basque Country

Servitization strategy is increasingly recognized as a key source of value with important competitive and economic potential across the globe. Over the years, it has been proven to contribute to territorial performance through the provision of services to manufacturing businesses. Such contribution, however, has been to a large extent consequential to the configuration of local industrial structures, and most importantly, by interconnectedness between manufacturing firms and knowledge intensive business services (KIBS) firms. Hence, the process of territorial servitization is highly conditioned to the association between manufacturing businesses and KIBS firms. To date, territorial servitization literature mostly describes the implications of KIBS firms for service deployment and service innovation in manufacturing, considering knowledge and technological capabilities as main variables for its success. Nevertheless, the literature is silent on how geographical distance between KIBS firms and manufacturing companies may affect servitization capacity. Therefore, this research attempts to disclose the importance of geographical distance of KIBS firms in manufacturers´ servitization capacity. In doing so, we analyze two manufacturing companies; Alpha and Beta, both located in the Basque country but collaborating with KIBS firms in different geographical areas, “inside” and “outside” the Basque region. Through a qualitative study based on (1) measuring firm’s capacity for servitization, and (2) in-depth interviews, results suggest that geographical distance in terms of proximity plays a key role on the KIBS-Manufacturer relationship for servitization capacity, and require to be considered as an important aspect for successful territorial servitization.

A nonparametric analysis of competitiveness efficiency: The relevance of firm size and the configuration of competitive pillars

This study employs a data envelopment analysis (DEA) model with a single constant input to analyze the competitiveness performance of a unique sample of 103 knowledge-intensive business service (KIBS) firms from Hungary, Spain, Colombia, and Costa Rica for the year 2017. Also, we assess how the configuration of competitive pillars—strengths and weaknesses—affects efficiency and how firm size moderates this relationship. The mean efficiency scores by which the competitiveness output can be optimized is 47.43%. The results suggest that the configuration of competitive pillars has important implications for efficiency analyses. For small businesses, competitive-enhancing actions should focus on mitigating competitive weaknesses that are detrimental to efficiency. Also, a configuration of competitive pillars in which one or various competitive strengths prevail is more beneficial for small businesses. Managerial tools such as the proposed competitiveness measure may offer useful information on what strategic actions can contribute to optimize business competitiveness. JEL CLASSIFICATION C14; L19; L25