COMPETITIVE POSITIONING AND INNOVATIVE EFFORTS IN SMES

This paper reports on the results of a study conducted on 455 smaller manufacturing firms. Its aim was to investigate the relationship between competitive positioning and innovative efforts as measured by R&D expenditures, process innovation, and the use of patent data bases. Results indicate that a relationship does indeed exist and that firms which hold a stronger competitive position in terms of cost, quality, and diversity generally make greater efforts with regard to innovation. In fact, some differences have been found to exist in the intensity of the various innovative efforts between groups of firms having different realized competitive strategies. These findings support the assumption that a link exists between business strategy and innovative efforts, and that this link is strongest in those firms which have the best competitive positioning.