Marke forces, competitive strategies and small business performance: Evidence from Mexico`s low-income market

Abstract

In Southeast Mexico, low-income entrepreneurs run their small businesses in a local market to earn their daily income. The aim of this study is to analyze the effect of market forces on generic competitive strategies and small business performance. It analyzes (1) which generic strategy has the greater effect on small business performance, (2) which market force is the one with greater effect, and (3) how market forces influence the relationship of competitive strategies on small business performance. Findings suggest that a differentiation strategy has a greater effect on performance than cost leadership; however, a hybrid strategy works better.