Differentiation Strategy and Export Performance in Emerging Countries: Mediating Effects of Positional Advantage among Mozambican Firms

Abstract

Small and medium-sized enterprises (SMEs) play an important role in economic and development growth, particularly in developing countries. Their success depends on the expansion of their markets across borders, based on the strategies adopted, in which differentiation strategies and positional advantages play an important role. As an emerging country, Mozambican SMEs face a lack of resources and business environmental challenges in deploying their unique advantages when competing abroad. As such, the objective of this paper is to study the impact of differentiation strategies on the export performance of Mozambican SMEs, and the mediating effect of positional advantage on the relationship between the differentiation strategy and export performance of SMEs. To achieve this objective, an empirical study was conducted, based on a sample of 250 Mozambican firms, to test a theoretical model that applied Structural Equation Modeling using the Partial Least Squares (PLS-SEM) algorithm, based on SmartPLS software version 3.3.6 (SmartPLS GmbH, Oststeinbek, Germany). The results show that differentiation strategies positively impact the export performance of SMEs and that positional advantage mildly mediates the relationship between the differentiation strategy and export performance. This suggests that Mozambican SMEs may not be properly taking advantage of the positional advantage of the differentiation strategies, as the added value generated by the positional advantage is relatively modest. As such, Mozambican SMEs still need to support their positional advantages to overcome fierce international competition. This study contributes to the knowledge about the consequences of adopting differentiation strategies and positional advantages on the export performance of SMEs, particularly in the context of emerging countries.