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.