THE STRATEGIC FIT’S EFFECTIVENESS IN THE COMPETITIVE MARKET: FOCUS ON SMALL BUSINESSES IN AN EMERGING COUNTRY

ABSTRACT This study analyzes how small businesses in an emerging country improve performance through strategic fit according to the intensity of market competition. It explores small businesses’ prospector or defender strategies in an environment of intense market competition. Data were collected from 107 small businesses in Vietnam, and PLS-SEM was used to assess the research model. The results showed that only prospector businesses improve performance in intense market competition. This study contributes to the literature fourfold. First, it extends the current knowledge of strategic fit by addressing the mediating effects of strategic behavior. Second, it contributes to the growing literature on contingency theory in small businesses’ strategic management. Third, this research offers a deeper understanding of the unique characteristics of emerging countries that jeopardize the effectiveness of using a defender strategy. Fourth, this study overcomes limitations observed in the literature regarding using single-item constructs to operationalize strategy variables.