Please use this identifier to cite or link to this item: http://hdl.handle.net/1959.3/154740

Title

Differentiation strategies in mature small firms: the impact of uncertain environments

Author(s)

Verreynne, Martie-Louise;  Meyer, Denny

Abstract

Mature small firms often struggle to grow profits as more competitors enter the market. These firms are also less likely to exhibit those entrepreneurial behaviours which underpin sustained performance. The use of differentiation strategies is one such approach which mature firms may be able to sustain – providing them with means to deal with uncertain environments. This article examines this supposition in a sample of firms employing fewer than 100 workers. Four hypotheses relating the business strategies of small firms to performance and age, organisational structure and environmental uncertainty are tested in an empirical study of 320 small firms. Structural equation analyses of the data indicate that innovative differentiation is significantly associated with performance, especially for firms operating in dynamic environments. However, it is found that mature firms are less likely to use differentiation strategies to nurture performance in such environments. These findings and their implications are elaborated in this article.

Publication type

Journal article

Research centre

Swinburne University of Technology. Faculty of Life and Social Sciences

Source

International Journal of Entrepreneurship and Small Business, Vol. 12, no. 3 (2011), pp. 327-342

Publication year

2011

FOR Code(s)

010401 Applied Statistics;  1503 Business and Management;  150314 Small Business Management

Keyword(s)

Differentiation strategy;  Performance;  Small firms;  Uncertain environments

Publisher

Inderscience Publishers

ISSN

1476-1297

Publisher URL

http://dx.doi.org/10.1504/IJESB.2011.039011

Copyright

Copyright © 2011 Inderscience Enterprises Ltd.

Peer reviewed