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korean management review - Vol. 49 , No. 5

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[ Article ]
korean management review - Vol. 49, No. 5, pp. 1191-1210
Abbreviation: kmr
ISSN: 1226-1874 (Print)
Print publication date 31 Oct 2020
Received 16 Jan 2020 Revised 11 Jun 2020 Accepted 07 Jul 2020
DOI: https://doi.org/10.17287/kmr.2020.49.5.1191
Do Korean Small Firms Need a Competitive Strategy?: Strategic Effectiveness of Korean Small Firms
Jaegun Lee ; Moon-Goo Huh
(First Author) Kyungpook National University (hl5ylz@naver.com)
(Corresponding Author) Kyungpook National University (moongoo@knu.ac.kr)
한국 소기업에게도 전략은 필요한가?: 소기업 전략 유효성과 전략 선택

Copyright 2011 THE KOREAN ACADEMIC SOCIETY OF BUSINESS ADMINISTRATION This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This study identifies the impact of small firm’s competitive strategies on business performance and presents strategic alternatives that are suitable for the small firms situation. The options that firms can consider in formulating strategies are the question of which strategy to choose, differentiation or low cost, and whether to choose a single strategy to pursue one strategy or a mixed strategy to use both strategies simultaneously. This has been studied in various contexts such as the industrial environment and the country, and the research results differ depending on the situation. Therefore, this study aimed to find out which strategy is best suited to creating a competitive advantage in the context of small business in Korea. The main results of this study are as follows. First, competitive strategies are effective in small firms, and pursuing a single strategy is more positive for corporate performance than pursuing multiple mixed strategies. Second, the differentiation strategy and the low cost strategy are effective in both small and medium enterprises. Third, single strategy is the best strategy type for small firms, and mixed strategy shows higher corporate performance than no clear strategy. This study presented theoretical and practical implications based on the above results.


Keywords: small firms, competitive strategy, mixed strategy, single strategy, no strategy

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• The author Jaegun Lee is an Ph.D. student at the School of Business Administration, Kyungpook National University, Korea. He earned his MA in strategy and organization from the School of Business Administration, Kyungpook National University, Korea. His research interests include failure experience, and R&D cooperation.

• The author Moon-Goo Huh, (Ph.D. Korea University) is a professor of strategy and organization at the School of Business Administration, Kyungpook National University, Korea. His current research interests include dynamic capability, competitive strategy, ambidextrous organization, knowledge and innovation, and social capital.