Antecedents of differentiation strategies in active export companies of Urmia

Document Type : Research

Authors

1 MS of business management

2 Associate Prof department of Business Management, faculty of Economics, Urmia University, Urmia, Iran

10.22034/smsj.2023.363802.1735

Abstract

By developing policies and strategies, the government can support the application of differentiation strategies among export companies. Additionally, gaining knowledge about customers and distribution channels may provide a basis for identifying products and services that may be unique to the industry. As such, the differentiation strategy is likely to provide a means to develop or adapt products to satisfy the specific needs of buyers in foreign markets. Small and medium-sized exporting firms face external obligations, being small and new. Because of these commitments, small and medium-sized companies must formulate and use appropriate strategies and guidelines to sustain performance when operating abroad. In addition to the different obligations faced by small and medium-sized exporting companies, globalization is associated with more intense competition. How can companies, especially small and medium-sized companies and global start-ups, which typically face significant resource constraints, compete in such environments? The solution is that they should differentiate themselves from competitors. Differentiation strategy refers to creating and marketing a product that is considered relatively unique in the entire industry. In other words, companies can differentiate their offerings based on brand image, product design, advanced technology, product features, customer service, and other dimensions. Differentiation by creating brand loyalty and less price sensitivity keeps the company away from competitor's aggressive move. Companies use their expertise to invent products and product approaches that differentiate them from competitors. SMEs typically do not have the economies of scale to pursue cost leadership approaches, and foreign markets may include multiple competitors. While the concentration strategy is often suitable for small and medium-sized companies, it is difficult to use in international business because of the diversity that companies face in different foreign markets. Differentiation strategy is closely related to innovation, and organizational learning is considered an important introduction to innovation and provides the knowledge needed to develop differentiated products. The company may need to conduct basic market research to understand distinct customer needs. In addition, gaining knowledge about customers and distribution channels can provide a basis for identifying products and services that may be unique to the industry. In this research, the antecedents of differentiation strategies in active export companies in the city of Urmia were explained. The current research falls under the category of co relational research in terms of its practical purpose and descriptive survey data collection method. Also, this research was conducted in the field. The statistical population of the present study consists of active export companies of the city of Urmia. The sample size was selected from Morgan's table, 185 companies using the available sampling method. The data collection instrument is a standard questionnaire (Gerbing and Anderson, 1988, Nunnally, 1978) based on the Likert scale, which includes a 7-point Likert scale. Cronbach's alpha coefficient was used for the reliability of the questionnaire. The data analysis was carried out using the structural equation method with the help of SPSS and SmartPLS software's. The results of the present research showed that the antecedents of the differentiation strategy (including: entrepreneurial orientation, international learning orientation, international growth orientation) have a positive and significant effect on the differentiation strategy.

Keywords

Main Subjects