Abstract/Summary

This study was conducted to investigate the relationship between distinctive capabilities, innovativeness, strategy types and the performance of SMEs in the Malaysian manufacturing sectors. The conceptual framework is developed based on the distinctive capabilities, innovativeness, strategy types and the performance. This study is based on a sample survey consisting of 100 SMEs in the manufacturing sector. Using structured questionnaires, the data were collected by mail as well as interviews with owner-managers of the SMEs. The findings indicate that there is significant relationships between distinctive capabilities and the innovativeness on the performance of SMEs. The findings also indicated that there is a significant relationship between strategy types and the performance of SMEs. Small and medium- sized enterprises (SMEs) play a significant role in the business system of both developed and developing economics (United Nations, 1993). This study examines the impact of distinctive capabilities, innovativeness and strategy types on the performance of SMEs, and the model builds upon the previous research which suggests distinctive capabilities, innovativeness and strategy types can affect SMEs performance.