Leveraging Competitive Strategies to Accelerate Small and Medium Enterprise Growth. Evidence from Service Sector Enterprises Operating in Lira City West Division, Northern Uganda

Abstract

Purpose: The study examined the effects of competitive strategies on the growth of service sector SMEs in Lira City West Division, Northern Uganda. Anchored on Porter’s generic competitive strategies model and the dynamic capabilities theory, the study offers compelling empirical evidence to advance theory, guide managerial practice and inform policy for accelerating SME growth in emerging economies. Methodology: The study deployed an explanatory quantitative crosssectional survey design, sampling 246 participants from 260 using stratified proportionate and simple random sampling. Research data were collected using piloted questionnaires and analysed using SPSS version 29 software. Descriptive statistics for competitive strategies and SME growth were generated. Model diagnostic tests, including normality, the Shapiro-Wilk W Test, Breusch-Pagan / Cook-Weisberg Test for Heteroscedasticity and the multicollinearity test, were undertaken to ensure data validity. Correlation and regression analysis procedures were undertaken to test the relationship between competitive strategies and SME growth and the effect of competitive strategies on SME growth. Findings: The study reported significant moderate positive associations between competitive strategies and SME growth. Particularly, market focus (r=0.494, p<0.05), service differentiation (r=0.286, p<0.05) and cost leadership (r=0.231, p<0.05) registered significant positive relationships with SME growth. The linear regression results revealed that market focus (β=0.427, p<0.001), service differentiation (β=0.114, p=0.070) and cost leadership (β=0.023, p<0.705) registered a strong significant positive effect, a positive statistically insignificant effect and a weak insignificant effect on SME growth respectively. Peculiar contribution to theory, managerial practice and policy: The study contributes to theory by integrating Porter’s generic competitive strategies with the dynamic capabilities theory, contending that SME growth is contingent on strategic orientation and adaptability alignment. Practically, it guides managers in prioritising market focus, while reinforcing service differentiation and cost leadership strategies. Policy-wise, it advances interventions for fortifying market orientation and adaptive capacity to accelerate service SMEs' growth in emerging economies.