Customer and Competitor Orientation, Innovation and Performance in Small and Medium Sized Enterprises

This research examines product and process innovation, as they mediate customer and competitor orientation and firm performance in the context of U.S. small and medium sized enterprises (SMEs). The research model that is proposed dismembers large managerial orientations into proposed sub-dimensions in order to better explain the role each plays in contributing toward firm market and industry performance. In this unique approach customer orientation is found to be partially mediated by process innovation, which then contributes directly to market (customer) performance outcomes. Competitive orientation, meanwhile, is found to be fully mediated by product innovation, which then contributes directly to industry (competitor) performance outcomes. This research affirms the importance to SMEs of melding innovation with a focus on customers and competitors to achieve performance goals