Core Capabilities, Competitive Strategy and Performance of Construction SMEs

Firms’ achieving optimal performance in today’s competitive situation is hard, particularly in industries with dynamic nature and operational environment and increasingly changing technologies. Such industries must be equipped with core capabilities and competitive strategies in order to become distinctive and to improve their performance. Also, competitive strategy helps firms achieve competitive advantage through a distinctive method. Therefore, a conceptual model of core competencies and competitive strategy which could significantly affect the company’s performance and provide the fit between the core capabilities, competitive strategy and performance is presented. Accordingly, the research method, based on the goal of the research and data gathering technique, was descriptive. The research model was tested by SPSS software on the data collected from a cluster sample of 232 small and medium-size construction enterprises in Tehran. The Results of regression analysis show that core capabilities and competitive strategies have a significant impact on the performance of firms. Other findings by cluster analysis of K-mean reveal that the correlation between competitive strategy and performance among small and medium-size construction companies is significantly different in various clusters of core capabilities.