Moderating Variables On SME’s Strategies And Competitiveness For International Trade

Abstract

Small and Medium sized Enterprises (SME) strategy and competitiveness in international trade in developing countries context have not been fully explored. This paper posits that SME’s competitiveness as a result of its strategy is moderated by an array of internal and external factors. Accordingly, this paper examines key moderating variables on the SME’s strategies as a construct that influence enterprise competitiveness. The objectives of the paper are three fold: to identify the moderating factors on SME strategies and competitiveness, to evaluate the level and extent of moderation of such variables and to evaluate the relationship between enterprise strategy and competitiveness. The hypotheses were developed and tested using data collected using survey of traders in the urban and peri-urban areas of Uasin Gishu District, Kenya. Systematic random sampling technique was used to pick 50 of the 200 traders in the market. Data was collected using self-administered structured questionnaire to the respondents. Factor analysis was used to extract latent factors and provide an understanding of structures and identify the moderating factors. Further, linear multiple regression analysis was performed on the extracted factors against sales volume as a measure of competitiveness. This was used in the assessment of various dimensions of the enterprise performance of SME’S. Ten factors with high eigen values of more than one were extracted. The regression model could not provide conclusive results on the effect of strategy on competitiveness, but could be indicative of the complexity of the underlying interactions.