EXPRESS: Effective Sme Import Strategy: Its Drivers, Moderators, and Outcomes

Abstract

We propose a conceptual model of the drivers, moderators, and outcomes of a firm’s effective import strategy, anchored on the Dynamic Capabilities and Industrial Organization theories. While the former theory explains the mechanism through which dynamic capabilities facilitate import strategy effectiveness that boosts competitive advantage and ultimately enhances financial performance, the latter theory sets the foundation for explaining the contingency role of both competitive intensity and environmental uncertainty on translating effective import strategy into competitive advantage. The model was tested using a sample of 151 British importers of small-to-medium size, with results indicating that possession of high levels of certain dynamic capabilities of a generic (i.e., adaptive and entrepreneurial) and import-specific (i.e., source identification and market development) nature are conducive to import strategy effectiveness. The latter was found to generate both product-differentiation advantage and low-cost advantage, although this was contingent on the degree of competitive intensity and environmental uncertainty prevailing in the importer’s home market. Finally, it was confirmed that both product-differentiation advantage and low-cost advantage have a favorable impact on the importer’s financial performance.