Competitive Advantages through Innovation in SMEs in Iran

Abstract

Due to the highly competitive business environment and emerging knowledge intense economy, it seems so essential for enterprises to be prepared to face the challenge. Enhancing capacities and capabilities enable firms to obtain competitive advantage which make them different from the competitors and react to the changes in better ways. To gain competitive advantages, companies need to do things different from others. Being innovative and adopting innovation, empower firms to acquire such a position and do the work procedures in a more effective and efficient way. To enhance the understanding of innovation importance and its impacts on competitive advantage the current research has been conducted. A questionnaire has been developed and data was collected from a sample of 114 Iranian small and medium enterprises. It is believed that lack of competition in Iranian industrial sector and economical infrastructure, small companies are less likely to pay attention to innovation activities and adopting innovation. Limitation and recommendation are also provided.