Strategic orientations and capabilities' effect on SMEs' performance

Abstract

Purpose: This study aims to: first, examine the effect of interaction orientation (IO) and brand orientation (BO) on marketing capabilities and small and medium enterprises' (SMEs') performance, and second, assess the complementarity effect of IO and BO on marketing capabilities and SMEs' performance. Design/methodology/approach: A model was developed and tested using a survey methodology. Data were collected from 538 SMEs located in Qatar and analysed by structural equation modelling with AMOS. Findings: First, IO affects SMEs' performance only indirectly via marketing capabilities, whereas BO affects SMEs' performance both directly and indirectly. Second, contrary to expectations, the complementarity between IO and BO produced a destructive/suppressive effect, rather than a synergistic effect, on both marketing capabilities and SMEs' performance, reflecting the importance of a trade-off to enhance both marketing capabilities and SMEs' performance. Originality/value: To the authors' knowledge, this is the first paper to examine the complementary effect of BO and IO on marketing capabilities and performance.