Abstract
The present business environment is characterized by high levels of competition, dynamism and technological sophistication. In Lagos, Nigeria the problem of many SMEs is shown by this research that SMEs has fallen out of profitability, in terms of market growth due to inadequate competitive strategy as regard to utilization of their organizations’ resources, lack of implementation of specific policies, strategies and actions designed to accomplish market growth in firms are not in place. Primary data were sourced through questionnaires and interviews and also the secondary data from journal and internet. The objective of the study was set to investigate the effect of competitive strategy on performance of small and Medium Enterprises in Lagos, Nigeria. Gaining insight from existing literature and theoretical models from hypotheses that were developed and tested using regression analysis, Copies of well structured questionnaire were administered to 150 randomly selected SMEs in AMAC and Kuje area of Lagos, F.C.T Nigeria, The population of this study was targeted at the top managers, middle and line managers, all in quote the managers of SMEs in Lagos, precisely in 150 SMEs was randomly selected. In essence the study adopted resource-based theory; the resource-based view is based on the idea that the effective and efficient application of all useful resources that the organization can gather helps determines its competitive advantage. The data obtained were analyzed using regression analyses and descriptive statistics to test the formulated hypotheses in order to establish a significant relationship between the variables while survey design is used as the research design. In this research the variable, Performance is proxies by: Sales growth volume (SGV), return on investment (RIN), customer’s base growth (CBG), revenue growth (RG), while Competitive Strategy is proxies by: Product features (PF), product customization (PC), added value (AV) and product quality (PQ).The findings revealed that there is a relationship between product features and customer base; product customization and sales growth, value added products and revenue growth. It also indicated that product quality has an influence on returns on investment; the study also showed that product features, customization, product quality, and added value are highly adopted by the sampled SMEs to enhance their customer base, sales growth, returns on investment and revenue growth. The Porters argument support the findings in the research work, that for a firm to achieve competitive advantage it must offer something different from its rivals. For SMEs to remain competitive in their chosen market there is the need for their product/service offerings to satisfy customer’s unique taste. This implies that top management must be conscious of specific demands of their customers and remain sensitive to their taste and preferences. Research has concluded that in a dense competitive business environment such as Lagos, survival is the top most priority of firms. This has not been an easy task for most SMEs in Lagos due to high level of competition from larger firms, lack of government support and even adequate funds to run their operations. For this reason it is necessary for SMEs to formulate adequate strategies as they give direction to what the business has in mind and also helps identify ways through which they can achieve their goals. This research recommended that in order to be more competitive, organizational managers must be strategically aware of customer needs and offer unique products and services that satisfy such needs
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