Purpose – The analysis of the interconnectedness between resources and capabilities,
and the way businesses use them as competitive weapons is a central element of the
strategic management literature. Finding the appropriate configuration of competitive
pillars is particularly relevant for resource-constrained small businesses. Drawing
on the resource-based view and the configuration theory, this study evaluates the
effect of both competitiveness and the configuration of the competitiveness system
Design/methodology/approach – An index methodology based on the configuration theory
was used to compute the competitiveness index on a unique sample of 625 Hungarian
small- and medium-sized firms. The study hypotheses were tested via regression analysis.
Findings – Results show that the impact of competitiveness-enhancing strategies is
conditional on the configuration of the system of competencies. Low-competitive businesses
benefit more from investments in the weakest competitive pillar, while strategies
oriented to improve more than one competitive pillar yield higher competitiveness
improvements among high-competitive businesses. Our findings also indicate that competitiveness
positively impacts performance, and that the exploitation of competitive strengths
leads to superior results among high-competitive businesses.
Originality/value – By employing an index methodology, our analysis contributes to
unveil how competitiveness impact business performance. The proposed analysis has
value for scholars and strategy makers by showing how the configuration of the business’
competitive system—in terms of competitive strengths and weaknesses—conditions the
generally positive impact of competitiveness enhancing actions linked to the acquisition
or development of resources and capabilities.
Keywords Competitiveness, Resource-based view, System dynamics, SMEs, Hungary
Paper type Research paper