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Pioneering Strategies and Small Firms, an Australia–UK Comparison
Abstract
An important aspect of strategic choke is whether to be a pioneer or a follower. This issue is especially important for small and medium sized enterprises (SMEs), potentially disadvantaged by scale in design, production and marketing. However, empirical evidence suggests that, in spite of their size, SMEs may benefit from being pioneers or first movers'. Indeed, in some markets being first may be the only way SMEs can compete against larger firms, whose advantages in exploitation may be more scale intensive than in earlier stages of the innovation process.
The UK and Australian economies present an interesting context for a comparison of SME pioneering strategies. The UK market is larger and its relative competitiveness is increased by smaller geographical distance and the ability of the market to support a greater number of firms, both large and small. Such differences in the potential competitiveness of markets might substantially influence the nature of SME strategies and the role of pioneering advantage.
The study reported in this paper examines the strategies of a matched sample of 478 firms in Australia and the UK. Timing of entry models are developed and tested. The different economic contexts, however, provide contrasting explanations of pioneering strategies. Technological turbulence and size of firm appear to be important determinants of strategy in both countries, but are most statistically significant for UK firms. Perceived competitive advantage provides the bulk of explanation of strategic behaviour for Australian firms. The overall UK models perform better statistically, suggesting that there may be more convergence towards some ‘norm’ for these firms. Overall statistical fit suggests a robust model construction and successful operationalisation of important strategy variables.
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Notes and References
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Details are available on request from the author.
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