In this study an in depth investigation of successful competitive strategies for small to medium-sized enterprises (SMEs) is undertaken. The overall aim of this study is to analyse the strategic orientation of UK Manufacturing SMEs. In the process, it will test Porter’s (1980, 1985) theoretical framework of generic strategies and thus evaluate firms’ preferred strategic synthesis. It will, therefore, test the efficacy of the value chain and develop any specific pattern that relates to a combination strategy.
The investigation of the above objectives is undertaken utilising a mixed research methodology with the purpose of examining the applicability of existing competitive strategy frameworks (phase 1) and testing a new theoretical framework that incorporates additional dimensions of strategy (phase 2). During phase 1, Porter’s framework is employed to investigate SMEs’ strategic orientation as a means to achieve sustainable competitive advantage. A semi-structured questionnaire is employed and the analysis is carried out by means of factor and cluster analysis to identify strategic variables currently employed by SMEs. During phase 2, the theoretical framework is operationalised to bridge the gap within the literature and existing empirical research. Its purpose is to identify forms of successful competitive strategies of UK MSMEs as they are formulated and implemented in firms’ value chain activities. The data was collected through a number of semi-structured interviews and the analysis was based on data categorisation.
The findings indicate that Porter’s (1980) single generic strategies are not the best option for UK MSMEs for gaining competitive advantage and that the competitive strategy of successful MSMEs differs from that of the less successful ones. Successful UK MSMEs develop competitive strategies that are characterised by a combination of strategies as they are formulated within firms’ value chain activities. Although, during the evaluation of strategic synthesis at value chain level, the data analysis demonstrated that not all forms of combination strategies can deliver a high performance. One of the significant findings to emerge from this study is that the value chain framework is essential when analysing forms of successful competitive strategies of UK MSMEs. The results of this investigation also show that generalisations and previous recommendations regarding successful MSMEs competitive strategy should be interpreted with caution.
Table of Contents
1.0 Introduction
1.1 Research Objective and Aims
1.2 Research Design
1.3 Outline of the Thesis
2.1 Introduction
2.2 The Business and Competitive Strategy Context
2.3 Investigation of Business Strategies and Choice of a Competitive Strategy Framework
2.4 Porter’s (1985) Value Chain Framework
2.5 Porter’s (1980, 1985) Generic Strategies
2.5.1 Generic Strategies and Value Chain Framework
2.6 Proposed New Theoretical Framework for Formulating Competitive Strategies
2.6.1 The Role of Environment
2.6.2 Key Success Factors (KSFs)
2.6.3 The Role of the Combined Value Chain
2.6.4 The Role of Combined Competitive Strategies
2.6.5 Firm Performance
2.7 Conclusion
3.1 Introduction
3.2 Measures of Study
3.3 Research Hypotheses
3.4 UK Manufacturing SMEs
3.5 Methodology
3.6 Research Design
3.6.1 Quantitative Approach: UK Data Archive Datasets
3.6.1.1 Cambridge Centre for Business Research SME Dataset (Second Panel), 1997 (Project Code: 4431)
3.6.1.2 Cambridge Centre for Business Research Manufacturing Strategy & Competitiveness Dataset 1994-1999 (Project Code 4434)
3.6.2 Questionnaire Survey
3.6.2.1 Maintaining Reliability of the Survey Instrument
3.6.2.2 Data Entry
3.6.3 Qualitative Analysis: Semi-Structured Interviews
3.6.3.1 Semi-Structured Interviews: Dealing with Data Quality Issues
3.6.3.2 Data Entry
3.7 Conclusion
4.1 Introduction
4.2 Methodology of Data Analysis
4.3 Data Analysis for Project: 4431 (Cambridge Centre for Business Research SME Dataset, (Second Panel), 1997)
4.3.1 Project 4431: Operational Facets
4.3.2 Project 4431: Factor Analysis
4.3.3 Project 4431: Cluster Analysis
4.3.4 Project 4431: Performance Analysis & Competitive Strategy Fit
4.4 Data Analysis for Project: 4434 (Cambridge Centre for Business Research Manufacturing Strategy & Competitiveness Dataset 1994-1999)
4.4.1 Project 4434: Operational Facets
4.4.2 Project 4434: Factor Analysis
4.4.3 Project 4434: Cluster Analysis
4.4.4 Project 4434: Performance Analysis & Competitive Strategy Fit
4.5 Questionnaire Survey
4.5.1 Operational Facets
4.5.2 Questionnaire Survey: Factor Analysis
4.5.3 Questionnaire Survey: Cluster Analysis
4.5.4 Questionnaire Survey: Performance Analysis & Competitive Strategy Fit
4.6 Conclusion
5.1 Introduction
5.2 Operational Facets of the Sample
5.3 Theoretical Framework & Importance of External Environment & KSFs when Formulating Competitive Strategies
5.4 Analysis of Firms’ Competitive Strategy Direction
5.5 An Overall Examination of Firms’ Competitive Strategy Direction & Firm Performance
5.6 Conclusion
6.1 Introduction
6.2 Study Overview
6.3 Summary of Findings & Results
6.4 Discussion of Findings & Contributions
6.5 Further Recommendations & Limitations of the Study
6.6 Recommendations for Further Research
Research Objective and Scope
This thesis investigates the strategic orientation of UK Manufacturing SMEs by testing the applicability of Porter's (1980, 1985) generic strategy framework. The research aims to evaluate whether UK SMEs follow these single generic strategies or if they adopt a combination strategy, particularly by analysing their value chain activities and how these relate to firm performance.
- Analysis of competitive strategies adopted by UK manufacturing SMEs.
- Evaluation of Porter’s (1980) generic strategy framework within the SME context.
- Development and testing of a new theoretical framework for combined strategic types.
- Integration of the value chain framework with generic strategies to explain firm performance.
- Assessment of the role of external environment and Key Success Factors (KSFs) in strategy formulation.
Excerpt from the Book
Porter’s (1985) Value Chain Framework
Prior to examining the generic strategy framework, the researcher will demonstrate how Porter’s value chain activities can be used for investigating in depth the applicability of competitive strategies within the different functions of a company.
Porter’s framework of the value chain is one of the best known and widely applied frameworks of a company’s value-creation processes (Sanchez & Heene, 2004). According to Porter: “Competitive advantage cannot be understood by looking at a firm as a whole. It stems from the many discrete activities a firm performs in designing, producing, marketing, delivering and supporting its product. Each of these activities can contribute to a firm’s relative cost position and create a basis for differentiation” (Porter, 1985:33)
Porter (1985), Besanko et al. (2004), and McGuffog & Wadsley (1999) identify that a company’s profitability is a function not only of industry conditions, but also of the amount of value it creates relative to its competitors. A firm can achieve competitive advantage if it possesses ‘capabilities’ that allow it to create not only positive value but as well additional total value compared to its competitors (Porter, 1985; Hooley et al, 2004). By understanding why a company can create value and whether it can continue doing so in the future is a necessary first step in diagnosing a firm’s potential for achieving a competitive advantage in the marketplace (Hitt et al, 2007; Spanos and Lioukas, 2001). Therefore, a firm must understand how its products serve customer needs better than potential substitutes; the technology of production, distribution and sales; and the business’s costs (Porter, 1985).
Summary of Chapters
1.0 Introduction: This chapter provides an overview of the thesis, evaluating gaps in the competitive strategy literature and defining the research objectives and aims.
2.1 Introduction: This chapter reviews competitive strategy frameworks and establishes the theoretical context for the study, focusing on Porter's (1980, 1985) generic strategies and the value chain.
3.1 Introduction: This chapter details the mixed research methodology employed, including quantitative data from datasets and a qualitative semi-structured interview approach.
4.1 Introduction: This chapter presents the data analysis for the first stage of the research, evaluating the applicability of Porter's framework using statistical techniques on various datasets.
5.1 Introduction: This chapter addresses the qualitative data analysis, evaluating the formulation of competitive strategies within firm value chain activities.
6.1 Introduction: This chapter provides an evaluation of the research, summarizing findings, discussing contributions, and offering recommendations for future studies.
Keywords
Competitive Strategy, Porter's Generic Strategies, Value Chain, UK SMEs, Manufacturing Sector, Strategic Synthesis, Firm Performance, Cost Leadership, Differentiation, Key Success Factors, Mixed Methodology, Strategic Management, Performance Analysis, Combination Strategy, External Environment.
Frequently Asked Questions
What is the core focus of this doctoral thesis?
The thesis investigates the relationship between value chain activities and generic competitive strategies specifically within small and medium-sized enterprises (SMEs) in the UK manufacturing sector.
What are the central themes explored in this research?
The research explores the applicability of Porter’s (1980, 1985) generic strategies, the formulation of these strategies within firm-level value chain activities, and their subsequent impact on firm performance.
What is the primary research objective?
The primary objective is to evaluate whether UK SMEs adopt Porter’s "pure" generic strategies or if they utilize combination strategies to achieve a competitive advantage over rivals.
Which scientific methodology is utilized?
The study employs a mixed research methodology, combining a quantitative deductive approach (using UK Data Archive datasets and a structured survey) with a qualitative inductive approach (using semi-structured interviews).
What does the main body of the work cover?
The main body covers a literature review of strategy frameworks, the development of a proposed theoretical framework, the methodology and research design, and extensive data analysis of both quantitative datasets and qualitative interview findings.
Which keywords best characterize this work?
Key terms include Competitive Strategy, Porter's Generic Strategies, Value Chain, UK SMEs, Manufacturing Sector, Strategic Synthesis, and Firm Performance.
Does the study conclude that Porter’s strategies are effective for SMEs?
The study finds that Porter’s single generic strategies are not the most effective option for UK SMEs, which instead tend to develop competitive strategies characterized by a combination of approaches formulated within their value chain activities.
What is the significance of the value chain framework in this study?
The value chain framework is identified as an essential tool for diagnosing and implementing competitive strategies, helping managers understand how specific activities contribute to cost advantages or differentiation.
- Quote paper
- Dr. Antonios Michail (Author), 2011, An investigation of the relationship between value chain activities and generic strategies in small and medium-sized enterprises in UK Manufacturing, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/183908
