Achieving high performance through competitive strategy: a case of Tshwane-based small and medium enterprises.

Abstract

The goal of the study was to explore achieving high performance for the Tshwane-based Small and Medium Enterprises based on the competitive strategies and examine the effect that the competitive strategies had on the Tshwane-based SMEs’ high performance despite the slow economic growth and inclement government legislation. However, for the Tshwane-based SMEs to succeed in achieving high performance, it was significant to introduce SMEs’ resources as a moderating construct. The SMEs’ resources provided a moderating effect on the relationship between competitive strategies and the Tshwane-based SMEs’ high performance. The study further sought to determine the existence of the relationship between the competitive strategies/resources and the SMEs’ high performance through the quantitative methods. The study used a sample size of 110 out of a population of 151 SMEs based in and around the City of Tshwane. The population was drawn out of the SMEs that had an annual turnover of between ZAR5M – ZAR10M. Since the population was known probability sampling was therefore used. The structural model was effected as a test to prove the goodness of fit index for the conceptual model using CMIN, TLI, GFI, and RMSEA. The dependent variable, based on the conceptual model, was the SMEs’ high performance. Through factor analysis, the model was adjusted which then resulted in a goodness of fit for the data observed based on the CMIN/Chi- Square. The model adjustment led to the strategy being dropped completely from the analysis since its inclusion resulted in the reliability of the study being questionable with the Alpha coefficient < .7. The findings revealed that there was a relationship between the competitive strategies and the SMEs’ high performance when moderated by the SMEs’ resources. Of key importance was the finding that when competitive strategies were applied as a unit they influenced the SMEs’ high performance. The study concluded that the Tshwane-based SMEs were unaware of the effect that the competitive strategies had on high performance. The government of the Republic of South Africa should speed up some of the processes and legislation aimed at assisting SMEs to grow and become sustainable.