Strategic positioning and strategic types of small firms

Abstract

Purpose: The purpose of this paper is to study the strategic process of small- and medium-sized enterprises (SMEs) including strategic reference points (SRP) (Fiegenbaum et al., 1996). Design/methodology/approach: The paper identifies the strategic positioning of SMEs (Lavie and Fiegenbaum, 2000, 2003) according to the importance that their managers give to internal and external SRP. Their influence on strategic types (Miles and Snow, 1978) and performance are analysed. This study uses information, from 83 SMEs in the Canary Islands (Spain), collected with a questionnaire. Findings: SMEs are primarily adaptive firms followed by narcissist ones: numerous SMEs focus their attention on internal SRPs. SMEs strategic positioning determines their strategic orientations to a much lesser extent than their characteristics (sector, size and age) do. The results show that product specialisation, the only difference between adaptive SMEs and narcissist and amorphous ones, is not evident in their performance. Practical implications: Decision makers and institutions should reflect about the maturity of the strategic process and the adaptation dynamic of SMEs. The need for SMEs to focus on their external vision should be highlighted. Originality/value: The study includes SRP in the strategic process of SMEs. It contributes to the literature by drawing a map of the strategic positioning of SMEs, based on their SRPs (Lavie and Fiegenbaum (2000, 2003) and by linking the strategic positioning of SMEs with their strategic types. It also has the value of applying the Rasch Rating Scale Model (Andrich, 1978, 1988).