Entrepreneurial Orientation, Perceived Competitive Threat, and Competitive Strategy Among SMEs in an Emerging-Economy Capital

RSN-PCC Working Paper 18–005

21 Pages Posted: 30 Jan 2019

See all articles by Emmanuel Garcia

Emmanuel Garcia

Asian Institute of Management

Jamil Paolo Francisco

Asian Institute of Management

Christopher Ed Caboverde

Asian Institute of Management

Date Written: December 2018

Abstract

Entrepreneurial business owners and managers take risks, innovate, and compete aggressively. We use logistic regression to investigate the impact of entrepreneurial orientation (EO) and perceived threat of new competition on three competitive strategies — cost reduction, marketing, and product innovation — adopted by SMEs in Metro Manila, Philippines. Our findings show entrepreneurial SMEs that perceive competitive threat to be more likely than non-entrepreneurial and non-threatened SMEs to pursue all three competitive strategies. Market power and predatory players also impact competitive strategy. Our results underscore the importance of a stable and predictable business environment and institutions that foster healthy competition and encourage growth-oriented strategies and innovation among SMEs.

Keywords: Entrepreneurial Orientation, Competitive Threat, Competitive Strategy, Cost Reduction, Marketing, Innovation, Small and Medium-Sized Enterprises, Philippines

JEL Classification: L26, L11, O31

Suggested Citation

Garcia, Emmanuel and Francisco, Jamil Paolo and Caboverde, Christopher Ed, Entrepreneurial Orientation, Perceived Competitive Threat, and Competitive Strategy Among SMEs in an Emerging-Economy Capital (December 2018). RSN-PCC Working Paper 18–005. Available at SSRN: https://ssrn.com/abstract=3318183

Emmanuel Garcia (Contact Author)

Asian Institute of Management ( email )

123 Paseo de Roxas
Makati City, Metro Manila
Philippines

Jamil Paolo Francisco

Asian Institute of Management ( email )

123 Paseo de Roxas
Makati City, Metro Manila
Philippines

Christopher Ed Caboverde

Asian Institute of Management ( email )

123 Paseo de Roxas
Makati City, Metro Manila
Philippines

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