COMPETITIVE POSITIONING AND INNOVATIVE EFFORTS IN SMES

This paper reports on the results of a study conducted on 455 smaller manufacturing firms. Its aim was to investigate the relationship betwe en competitive positioning and innovative efforts as measured by R&D e xpenditures, process innovation, and the use of patent data bases. Res ults indicate that a relationship does indeed exist and that firms whi ch hold a stronger competitive position in terms of cost, quality, and diversity generally make greater efforts with regard to innovation. I n fact, some differences have been found to exist in the intensity of the various innovative efforts between groups of firms having differen t realized competitive strategies. These findings support the assumpti on that a link exists between business strategy and innovative efforts , and that this link is strongest in those firms which have the best c ompetitive positioning.