Small and Medium Sized Companies Perceptions of Competitive Advantage: A comparative study of China and Iran's automotive components manufacturers

Small and medium sized enterprises (SMEs) are significant to the creation of sustainable economic growth and its subsequent influence on the level of employment in developing and emerging countries. Understanding the ways in which competitive advantage can be gained remains a significant issue for practitioners and academics alike (Powell, 2001). However, a definitive explanation has yet to be found, in consequence many explanations abound.

This thesis is concerned with the perception, usage and structure of Competitive Advantage within Iranian automotive parts manufacturing SMEs compared to Chinese manufacturing SMEs. The background to this research is based on the fact that empirical evidence of the application of the competitive advantage concepts within the realm of small and medium sized enterprises in emerging and developing countries has been limited. The detailed data collection tools used in this research, took the form of a questionnaire and after that, face to face interviews with senior managers of Iranian and Chinese SMEs. Using data collected from senior managers of SMEs in Iran and China, this thesis examines the suitability of western theories of competitive advantage by evaluating their use in emerging and developing countries. It concludes by providing the conditions that constrain or enable competitive advantage in developing and emerging countries with a view to advance strategic practices of small and medium-sized automotive components manufacturers. Similarities and differences between the views of Iranian and Chinese managers about the competitive advantage factors are explored leading to the conclusion that they have similar view-points about most factors, except those factors such as scheduled and continuous learning process, flexibility, R&D establishment, low price competition, being active in regular markets, transportation systems, core competency and capability.

According to the findings of this research, it is concluded that managers of developing and emerging countries have a high degree of understanding about competitive advantage factors. It can be established that western theories and practices of competitive advantage are applicable to SMEs of developing and emerging countries, especially in the automotive manufacturing sector.

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