Understanding the effect of entrepreneurial orientation, innovation capability and differentiation strategy on firm performance: a study on small and medium enterprises
Deepak Kaushal, Sanjeev Kumar, Rahul Raj, Abhishek Negi
Abstract
The current study strives to analyse the relationship amongst entrepreneurial orientation (EO), innovation capability (IC) and SMEs performance (FP). This study further tries to explore the impact of differentiation strategy (DS) as a mediating variable between the two. The researchers distributed 500 questionnaires to SMEs from various industries. Out of 500, 234 respondents completed the survey, hence, the study recorded response rate of 46.8%. The findings demonstrate a noteworthy and positive impact of EO and IC on DS and FP. Furthermore, the DS and IC affect SMEs performance positively and found to be noteworthy. The mediation analysis validates a case of partial mediation of DS and IC amongst EO and FP. It was found that SMEs with elevated EO will be more willing to implement DS. The analysis displays that DS playing the mediating role among EO and FP by positively affecting the performance. The study advocates that so as to improve SMEs performance, the companies should pay serious attention to EO. The study also offers a holistic view on the importance of DS in enhancing the SMEs performance.