Competitive Intensity Market Turbulence Technological Turbulence Innovation Types and Firm Business Performance in MSMEs

Abstract

The objective of this research is to examine effect of market turbulence, technological turbulence and competitive intensity on business innovation types and their effect on firm business performance for MSMEs. The integrated model developed in this research as extension of environment-strategy performance framework for innovation strategy may provide a very useful framework for MSMEs to decide on type of innovations to pursue to increase chance of business success. Motivation of this research is to help in providing guidance to MSME managers in formulating innovation strategy for business success. High technology industry is characterized by high level of innovative activity and its environment is characterized by higher market turbulence, technological turbulence and competitive intensity. Drawing inspiration from high technology environment and examining innovation theories, theory of resource based view, dynamic capability theory and environment-strategy-performance framework, this research proposed a research model which extends environment-strategy-performance framework for innovation strategy considering market turbulence, technological turbulence and competitive intensity environment variables. This is the major theoretical contribution of this research. The investigation of environment factors competitive intensity, market turbulence and technological turbulence, the wide range of business innovations and consequence on firm business performance in an integrated model is a significant contribution of this study to the literature on innovation and strategic management and serves to bridge the gap in the literature between environment, innovation strategy and firm business success. Based on this research model, empirical study was carried out in 7 countries (USA, UK, India, Russia, Brazil, Vietnam, Kenya) belonging to 3 different categories of countries (advanced/developed countries, emerging countries and low income developing countries) covering 659 MSME employees, managers and owners.