Strategic Management Practices and Their Economic Impact on SME Profitability in Emerging Markets
DOI:
https://doi.org/10.14419/1azdgy97Keywords:
Strategic Planning; SME Profitability; Emerging Markets; Market Orientation; Strategic Management Practices; Return on InvestmentAbstract
Small and Medium-sized Enterprises (SMEs) are crucial to economic growth and job creation, especially in the complex and often volatile environments of emerging markets. Limited strategic capacity and inconsistent performance hinder their potential. The study investigates the impact of strategic management practices, specifically strategic planning, market orientation, innovation, and financial control, on SME profitability across emerging economies in Asia, Africa, and Latin America. A mixed-methods approach was used, combining quantitative survey data from 310 SMEs with qualitative interviews of strategic decision-makers. Statistical analyses, including correlation and multiple regression models, were employed to examine relationships between strategic variables and financial indicators such as return on investment (ROI), revenue growth, and net profit margin. The results showed that strategic planning had the strongest positive correlation with ROI, followed by market orientation, while innovation and financial control had minimal direct influence. Sectoral and regional differences were also observed, with manufacturing SMEs showing stronger planning capabilities and Asian firms outperforming others across all profitability measures. The qualitative data highlighted contextual barriers and enablers shaping strategic decision-making. The findings emphasize the importance of institutionalizing strategic planning and adopting market-responsive strategies to enhance performance. Policymakers and development agencies should support capacity-building efforts and ensure necessary infrastructure is in place. Future research should explore longitudinal and comparative approaches to deepen understanding of strategic dynamics in various emerging market contexts.
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