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This study proposes mechanisms for firms to thrive in a turbulent business environment by investigating the mediating role of frugal innovation in the relationship between competitive intelligence and value creation. The study also examined absorptive capacity as a critical boundary condition that influences the impact of competitive intelligence on frugal innovation. A survey questionnaire was administered to 302 SMEs, and the data were analysed using Amos. Structural equation modelling (SEM) was employed to test the hypothesis. The findings demonstrate a significant positive impact of competitive intelligence on SME value creation. The study also found that frugal innovation acts as a mechanism to amplify the impact of competitive intelligence on value creation, and this relationship is anchored by a high level of absorptive capacity. The study demonstrates how competitive intelligence and frugal innovation synergistically drive value creation amid turbulence under the auspices of absorptive capacity, thereby increasing SMEs’ resilience and competitiveness. The study sheds light on previously unexplored aspects of value creation in a turbulent business environment, offering novel perspectives on dynamic capabilities.
Klenam Korbla Ledi (Wed,) studied this question.