Efficacy of the Porter’s generic strategies in achieving competitive advantage: The mediating roles of market ambidexterity and firm performance

This study examines the influence of Porter’s generic strategies on competitive advantage [CA] after controlling for the mediating roles of market ambidexterity [MA] and firm performance [FP] in an emergent developing country in West Africa. The study employed the explanatory research design and supported it with a quantitative research approach to measuring and analysing the primary data gathered through drop-and-pick questionnaire administration. Small and medium enterprises [SMEs] operating in the three major business hubs in Ghana were surveyed. SMEs were conveniently selected. 258 cases were used for data analysis. Reflective-formative structural equation modelling was used to test the hypotheses in SMART PLS 4.0. Differentiation strategy [DS] and focus strategy [FS] significantly predicted SMEs’ performance, but cost leadership strategy [CLS] failed. Thus, SMEs were ineffective in using CLS to improve their performance in the COVID-19 era. FP mediated the DS and CA relation. A similar result was the case of the FS-CA predictive relation. However, FP failed to mediate the CLS-CA predictive relation. SMEs should focus on implementing FS and DS if they are to improve their performance. SMES should pursue cost-cutting strategies to reduce the cost of operations COVID-19.