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.