GAINING COMPETITIVE ADVANTAGE IN A GLOBAL BUSINESS ENVIRONMENT - THE CASE OF SMEs IN EMERGING MARKETS

Nowadays people discuss more and more about a new, globalized economy, in which organisations integrate different strategies to develop business. The recent economic crisis and the slow recovery after the global downturn put more pressures on companies in emerging markets, in particular on small and medium-sized enterprises (SMEs). Furthermore, the negative implications are visible at macro level (e.g. reducing the number of new jobs created). There are possible solutions for gaining competitive advantage, solutions based on specific elements of strategic management as resource-based view (RBV), dynamic capabilities (DC) or transaction costs economics (TCE). SMEs make decisions for different strategic causes. Strategic decision making is a challenge in a dynamic industrial environment. Knowing the competitor's reaction represents SMEs capability to generate a good competitive strategy. Today many techniques are used in the process of decision-making. Real option analysis (ROA) is a new paradigm inspired from the classical financial options. It presents the advantage of providing solutions to the problems of investment and the impossibility of understanding in a correct manner the future flows spectrum. The most important aspect offered by ROA is related to the flexibility "ingredient", essential for our application. Games can be used as strategic situations that helps SMEs to perform. Game theory (GT) concentrates on identify the competitor's reactions and to create a set of actions as a response to the competitors. The mix between ROA and games (option games) could be another solution to cope with uncertainty and to add reliable elements of flexibility. The aim of this paper is to examine the sources of competitive advantage based on the specific mechanisms in order to provide new insights in the optimal use of some strategic management elements to solve problems. Also, the paper provide a framework that include RBV, DC, TCE, GT and a flexible element offered by ROA that help SMEs to understand the strategies needed in rapidly changing markets. Through a innovative concept, the proposed methodology offers new research directions for the development of strategies for SMEs.