The key success factors, distinctive capabilities, and strategic thrusts of top
SMEs in Singapore
B.C. Ghosh*, Tan Wee Liang, Tan Teck Meng
1, Ben Chan
School of Accountancy and Business, Nanyang Technological University, Singapore, Singapore
Received 1 December 1998; accepted 1 December 1998
Abstract
The research tries to determine the strategy dynamics and key success factors (KSFs) for excellence in performance of the so-called ``tiger'' SMEs in Singapore. In 1995 and 1996, 50 top privately owned and successful enterprises in Singapore were identified. They have shown that they can excel, even in the current highly competitive and high operation ± cost environment. Their performance can be attributed to their dynamism and a few KSFs that are apparently universal to these successful companies. The strategy dynamics and their specific components (i.e., the six top SMEs) are found to be: 1) A committed, supportive, and strong management team. 2) A strong, visionary, and capable leadership. 3) Adopting the correct strategic approach. 4) Ability to identify and focus on market. 5) Ability to develop and sustain capability. 6) A good customer and client relationship. Approximately 60% of the companies surveyed were found to be of Defender type organizations (Miles and Snow typology). As a majority of the companies are from manufacturing and servicing sectors and from OEMs supporting the MNCs, it is not surprising that the Defender type strategy is predominant. However, such organizations may have to evolve in order to adopt a more superior strategy such as Prospector and Analyzer when environment changes. The importance placed by organizations adopting different strategy types on their strategic posture are different although KSFs and capabilities are generally universal. Comparing proactive with passive strategy types, the degree of emphasis given various success factors by proactive type companies was generally found to be higher. Specifically, proactive type companies placed higher importance on the following factors for excellent performance: (i) Satisfying customers needs, (ii) Close working relationship between top management and employee, (iii) Regionalization, (iv) Leadership, (v) Availability of financial and technology resources and support. Further, the research also found that the importance attached to the various strategy-related success factors changes with the development. As it becomes more established, the ranking of KSFs changes as the organization faces different challenges when competition becomes tougher. Enterprises need to pay attention to the following dynamics and strategic thrusts: (a) Strong market orientation and relevant capability; (b) Effective management; (1) Strong management commitment and support (2) Strong organizational capability and management cohesiveness; (c) Access to broad base support and resources (i.e., Networking). D2000 Elsevier Science
Inc. All rights reserved.
Keywords:Key success factors; Strategic thrust; SMEs
1. Introduction
Businesses have been finding it hard to operate in Singapore owing to the high operating cost and increasingly intense competition from the region. Coupled with the fact of small local market size, and relying very much on export market, the business environment has become even more difficult to operate. However, there are companies that excelled. The `Top 50' privately held enterprises for 1995
and 1996 have shown that they can excel even under these adverse conditions. The objective of this research is to identify and examine the strategic key success factors (KSFs) [key success factor is defined for our purpose as factors which are critical for excellent performance of the company, rather than just survival which is the function of critical success factors (CSFs)].
The successful privately held companies are potential candidates for public listing if they need to raise public funds. Some of them have crossed a turnover of S$800 million and others have yet to cross the S$100 million turnover mark. But they are all on the fast track, growing rapidly and regionalizing their operations. Some of those * Corresponding author. Tel.: +65-799-5656; fax: +65-791-3697.
1 As of January 1998, Prof. Tan Teck Meng has since left the School to join the Singapore Management University.
0148-2963/01/$ ± see front matterD2000 Elsevier Science Inc. All rights reserved.
that appeared in the 1996 listing were already publicly listed at the end of that year.
The `Top 50' enterprises were ranked based on their performance over a 4-year period. Various quantitative factors were used such as gross turnover, profits, return per employee, return on assets, and percentage of business from overseas operations. The evaluation team, from An-dersen Consulting, The Business Times, and The Economic Development Board, developed and applied a balanced scorecard of these performance indicators for companies across a wide mix of industries. A key consideration in the scorecard is giving a balanced weight to both absolute financial performance and growth. The aim is to capture how fast the company is growing, not just how much it makes. So, aside from turnover and profit levels, the team looked at growth in turnover and profits. However, this information is privy to the group and were not available to the researchers.
In the study conducted here, companies are defined successful if they appeared in the 1995 or 1996 `Top 50' Enterprises list compiled by Andersen Consulting, The Business Times, and The Economic Development Board of Singapore, a statutory board within Singapore.They form our base group whose strategies we study.
1.1. Objectives of the study
The focus of this article is to isolate the top KSFs (not CSFs) that are commonly practiced by these successful privately held companies, so that they may be adopted by any enterprise (even start-ups). The study also examines what are the most commonly adopted strategy types by these successful companies and to determine if the KSFs correlate well with the strategy type adopted. We will also argue that these factors will be positivist and universal in nature. This will be one hypothesis. A second hypothesis at this stage is to identify a discrimi-nating model that will be able to predict the strategy type from its KSFs and distinctive capabilities, such that such a model can be used for a firm's future strategic direction.
1.2. Significance of research
Privately held enterprises play an important role in the growth of the Singapore economy. There are already 80,000 SMEs in Singapore employing about 40% of the workforce and contributing around 30% of the total value added in the economy. Their continual survival and success is therefore critical, especially with increasing competition from the region and uncertainties associated with multi-nationals. By identifying the KSFs of top successful local enterprises, and many of them are SMEs, one will gain insight and understand better how they remain competitive and even excel in the harsh operating environment in Singapore. The findings of the research are likely to be
more relevant and applicable to local companies, though there are other generalizable aspects.
2. Some discussion of the relevant literature
that, a written business plan, new product development, a strong sales and marketing team were among the prerequi-sites for a successful business. Barkham (1989) and Pol-lock (1989) identified skill, attitudes, and the gathering of the marketing information as factors contributing to the success of an enterprise.
Wikin and Sons, reported by The Economist (1991), emphasized successful market positioning and trend iden-tification well ahead of the rivals, and an obsession with quality; McCormack (1989) agreed that one of the most important factors to a successful business was a commit-ment to quality. Profit Building Strategies for Business Table 1
Profile of the companies surveyed
History of companies (years) No. of employees Turnover (S$ million)
Industry type No. of returns <5 5 ± 10 11 ± 15 >15 <100 100 ± 500 >500 <50 50 ± 100 >100
Manufacturing 15 (43%) 1 4 10 10 5 7 3 5
Services 7 (20%) 1 5 1 1 5 1 4 1 2
Retail 4 (11%) 4 1 2 1 2 1 1
Engineering 3 (9%) 3 2 1 3
Others 6 (17%) 1 5 1 4 1 2 4
Total 35 (100%) 2 10 23 3 22 9 13 10 12
Table 2
Summary statistics
Question Key content Count Mean
Standard
deviation Remarks
D1 Products and services focused 35 1.84 0.77 To test Defenders type
D2 Ability to identify niche 35 1.53 0.67 To test Defenders type
D3 Efficiency emphasis 35 2.39 0.84 To test Defenders type
D4 Low price and good products 35 2.21 1.11 To test Defenders type
P1 Periodic re-definitions 34 2.72 0.77 To test Prospectors type
P2 ``Early in'' in new product and market 35 2.59 0.73 To test Prospectors type
P3 Production flexibility rather than efficiency 34 2.90 0.98 To test Prospectors type
P4 Rapid response to opportunity 35 2.20 1.15 To test Prospectors type
A1 Stable and limited line of products and services 35 2.24 0.88 To test Analyzers type A2 Not ``first in'' but with cost-efficient products or services 35 2.73 0.98 To test Analyzers type
A3 Monitoring the ``first in'' leader 35 2.13 1.01 To test Analyzers type
R1 Limited risk taking 34 3.22 1.02 To test Reactors type
R2 Forced by environmental pressure to respond 35 2.87 1.09 To test Reactors type
Q1 Always identify the market well 35 2.00 0.76
Q2 Frequently satisfy customers' needs 35 1.81 0.71
Q3 Constantly developing new ideas and capability 35 2.01 0.71
Q4 Ability to identify niche 35 2.07 0.73
Q5 Always ahead of competitors 35 2.63 1.00
Q6 Employees always get the resources and support 35 2.47 0.87 Q7 Close relationship between top management and employees 35 2.19 0.92 Q8 Customer relationship is more important than good product/service 35 2.33 1.15 Q9 Regionalization is necessary for company's survival 35 1.83 1.22 Q10 Government plays an important role in the company's success 35 2.46 1.30 Q11 Easy to access to capital to achieve company's goal 35 2.79 1.11 Q12 Luck is important in the success of a business 35 3.14 1.10
K1 Ability to identify and focus on market 35 1.50 0.68
K2 Ability to develop and sustain capability 35 1.59 0.62
K3 Committed, supportive and strong management system 35 1.41 0.59
K4 Good and responsive organization system 35 1.79 0.64
K5 Leadership 35 1.43 0.65
K6 Good HR management practice 35 2.20 0.77
K7 Good customer and client relationship 35 1.71 0.68
K8 Availability of financial and technology resources 35 1.99 0.61
K9 Government support 35 2.63 1.01
K10 Good product/service feature 35 1.87 0.56
K11 Good networking 35 2.01 0.75
K12 Regionalization 35 2.09 1.02
K13 Adopting the correct strategy 35 1.49 0.62
Owners (1989, 1990, 1991) identified that one of the factors in building a successful business was the ability to deal effectively with customer complaints. Kofi and Cho (1989) emphasized the importance of government-related and foreign markets for businesses seeking expan-sion. Mraz (1989) states that thorough planning was vital to starting a successful business; finding customers, ven-dors, employees and financial resources should be thought out in advance.
Louis et al. (1996) investigated SMEs from the manu-facturing sector and found that there is no `one best'
strategy of technology change; however, for SMEs, he advocated flexibility.
Bhaskar and Jamaluddin (1993) examined the production flexibility model and similarly found flexibility is the key that allows small firms to survive and compete with larger firms. Colin et al. (1993) examined diversification as one of the survival strategies. Brazell (1991) stated that lack of management skills, competence, and experience were the great contributing factors to failure. Haswell and Holmes (1989) attributed the main causes of business failures to management incompetence and inexperience. Wood (1989) Table 3
The strategy type of the surveyed companies
Sector Defenders (D) Prospectors (P) Analyzer (A) Reactors (R) D or R D or A D or P A or P Total
Manufacturing 7 3 2 1 1 1 15
Service 5 1 1 7
Retail 4 4
Engineering 1 1 1 3
Others 4 1 1 6
Total 21 3 4 1 1 3 1 1 35
Table 5
Multiple range tests on K1 ± K13 (perceived KSFs)
Method: 95.0% LSD
Count Mean Homogeneous groups
K3 Committed, supportive and strong management system 34 1.41 X
K5 Leadership 34 1.43 X
K13 Adopting the correct strategy 34 1.49 XX
K1 Ability to identify and focus on market 34 1.50 XX
K2 Ability to develop and sustain capability 34 1.59 XXX
K7 Good customer and client relationship 34 1.71 XXXX
K4 Good and responsive organization system 34 1.79 XXXX
K10 Good product/service feature 34 1.87 XXXX
K8 Availability of financial and technology resources 34 1.99 XXX
K11 Good networking 34 2.01 XXX
K12 Regionalization 34 2.09 XX
K6 A good human resource management 34 2.20 X
K9 Government support 34 2.63 X
Table 4
Multiple range tests on Q1 ± Q12 (companies, capabilities)
Method: 95.0% LSD
Count Mean Homogeneous groups
Q2 Frequently satisfy customer needs 35 1.81 X
Q9 Regionalization 35 1.83 X
Q1 Always identify the market well 35 2.00 XX
Q3 Developing new ideas and capability 35 2.01 XXX
Q4 Ability to identify niches 35 2.07 XXX
Q7 Good relationship between top management and employees 35 2.19 XXXX
Q8 Customer relationship is more important 35 2.33 XXXX
Q10 Government plays an important role in the company's success 35 2.46 XXXX
Q6 Employees always get the resources and support 35 2.47 XXX
Q5 Always ahead of competitors 35 2.63 XX
Q11 Easy access to capital 35 2.79 XX
also confirmed that lack of experience was one of the causes of business failures. Smallbone (1990) concluded that a lack of capital and the lack of revenue-generating ability were the main reasons for business failures.
Ibielski (1996) found that interfirm co-operation is an important attribute for future survival. Japan's Osaka Chamber of Commerce and Industry, in their visit to Singapore in July 1995, called for tie-ups between small-and medium-sized companies from Singapore small-and Japan, and operate in third countries. The joint effort is to reduce costs and maximize complementary strength (The Business Times, 1995).
Gunter et al. (1995) found that the secret of success for the mid-sized German companies is the emphasis of sim-plicity in their operations. These leading firms produce a narrower range of products, sell to few customers, and have
fewer suppliers. They have decentralized organizational structures, simpler and faster processes, and a more con-centrated focused nature of R&D investment, logistics, and location structure.
Conant et al. (1990) suggest that strategic types, distinc-tive marketing competencies, and organizational effecdistinc-tive- effective-ness determine how a busieffective-ness performs. They found marketing competencies associated with prospector type organizations superior to those of analyzer, defender, and reactor type organizations. Briefly, organizations having the trait of a Defender attempt to locate and maintain a secure niche in a relatively stable product or service area. The Prospector type of organization typically operates within a broad product ± market domain that undergoes periodic re-definition. The organization tries to be `early in' in new product and market areas even if not all of these efforts Fig. 1. Tabulation of capabilities along with types of strategy. The shaded region in each column indicates no significant difference in mean within the respective groups. The numbers in the bracket show the ranking. * and + indicate significant difference between means atp< 0.1.
prove to be highly profitable. An Analyzer attempts to maintain a stable, limited line of products or services, while at the same time, moving out quickly to follow a carefully selected set of more promising new developments in the industry. The organization is seldom `first in' with new product or services. The reactor type of organization does not appear to have a consistent product ± market orientation. The organization is usually not as aggressive in maintaining established products and markets as some of its competitors nor is it willing to take as many risks as other competitors.
Rather, the organization responds in those areas where it is forced to by environmental pressures.
Recent research studies carried out by Ghosh and Schoch (1996b) and Ghosh et al. (1996), on the empirical study on marketing effectiveness Ð comparing Singapore with Aus-tralia, New Zealand, and Taiwan give a further insight into marketing effectiveness as a success factor that contributes to better performance. Singapore's companies that have better performance claimed a much stronger marketing than product or selling orientation. And these better-performing Fig. 3. Comparison of capabilities of Defender type and Proactive type strategies. The shaded cells show no significant between means of factors in the respective column. Significant difference between factors from different columns atp< 0.1 is indicated by +. D = D + R, P = P + A; six mid-pointers pro-rated.
companies have adopted a stronger marketing role in identifying and meeting customer needs with a role played by the chief executive officer himself. Ghosh and Schoch (1996a) confirmed this again in a later study which com-pared local SMEs, large companies, and MNCs. The three types of organization are dominantly marketing oriented with no significant difference between MNCs and the local companies. Euromoney (1996) suggested that Asia's excel-lent companies succeeded due to good management, tech-nology adaptation, and appropriate international orientation. Ghosh et al. found that success factors are generally positive in nature (that is, those who are self-driven rather than circumstances-driven tend to succeed more as an entrepreneur) and these success factors tend to be more universal in character. In preparing a list of success/strategic factors, we however included such other matters as regio-nalization. We also included a list of distinctive marketing competencies, based on Conant et al. (1990), to see how
competencies complement the KSFs. But more on research methodology a little later.
2.1. The sample
The target population of the survey are the `Top 50' enterprises in 1995 and 1996, however, several companies appeared in the list for consecutive years and therefore, the total number of companies from the two lists is 66. A questionnaire was sent to all 66 of them.
The questionnaire is based on the prior work of Conant et al. (1990) and Ghosh et al. (1996). Four main sections can be identified in the questionnaire; the first section (questions 1 to 4) captured the general profile of the organization, while the second section determined the strategic type of the organization. The third section (Q1 ± Q12) was designed to determine the competencies of the company that contribute to excellent performance and the fourth section (K1 ± K13)
was designed to identify the perceived KSFs of the com-pany. A Likert type of scale was used, 1 to 5, with 1 being most significant and 5 the least.
2.2. Method of data analysis
Descriptive analysis was performed on the data and a cluster analysis was also performed to determine if the postulated KSFs are widely perceived and practiced by the respondents as their strategic mode of operation. Top KSFs were identified through the application of multi-range test. The relationships between KSFs and capabilities were analyzed by employing the Pearson correlation technique. Correlation between strategy types, KSFs and capabilities of
the organization was performed through clustering. Soft-ware used was Statgraphic.
3. Results and analysis
We were able to get 35 usable responses (out of 38 actually returned) out of the 66 targeted companies, hence, the effective response rate was 53%. Further, the majority (i.e., 60% >) of respondents responded within 3 weeks after the surveys were mailed, indicating that in general, participants were willing enough to participate in the survey. In view of these two factors, the data collected are deemed representative of the population. As such, Fig. 6. Factor analysis of companies' abilities in achieving factors Q1 to Q12. Factor loading matrix after varimax rotation.
some of the statistical analyses carried later are assumed to be representative (and hence conceptually valid) although they may not meet the required normal minimum sample size (e.g., factor analysis), specified in literature (see Tables 1 ± 3).
There are six companies which cannot be clearly classi-fied into a single strategy type as shown in Table 3. How-ever, at a later stage, where for analysis purposes we grouped these companies into two major groups, i.e., Analyser/Prospector into one and Defender/Reactor into the other, we allocated these six into one group or the other suitably, on the basis of their responses.
3.1. A cluster analysis
The distinctive competencies of the responding compa-nies were cluster-analysed. The majority of the organiza-tions (94.29%) fall into cluster 1, while only one member each formed clusters 2 and 3. The responses to KSF questions were similarly cluster-analysed. Again, the ma-jority of the companies (94%) formed one of the clusters, and the other two clusters are formed with one member each. The cluster analysis indicated, in our view, that the perceived KSFs and the supporting competencies are uni-versal among the population, supporting an earlier hypoth-Fig. 8. Pearson correlation between the top six KSFs and capabilities.
esis on this matter that they are universal and positivist in nature.
3.2. A multiple range test
This analysis applies a multiple comparison procedure to determine which means are significantly different from the others. The aim of the test is to identify and separate a few top success factors (from the rest) with no significant difference in their means at 95% confidence level. These factors will then form the top KSFs. The method being used to discriminate among the means is Fishers' least significant difference (LSD) procedure at a 95% confi-dence level. The analysis found that at 95% conficonfi-dence level, there is no significant difference between the means of Q2, Q9, Q3, Q1, Q4, and Q7. Similarly, there is no significant difference between the means of K3, K5, K13, K1, K2, and K7. The analyses show that the top KSFs are of equal importance, as there is no significant difference in the means.
Therefore, the strategy dynamics/distinctive capabilities of these successful companies are:
1. An ability to satisfy customer's need 2. Regionalization capability
3. Constantly developing new ideas and capabilities, i.e., innovativeness
4. Can always identify market well, i.e., opportunity-seeker
5. Ability to identify niches, i.e., focuser
6. Good relationship between top management and employees, i.e., brain-rather-than-brawn-centered capability
The top KSFs which we consider the other side of the mirror were identified to be (see Tables 4 and 5 and Figs. 1 ± 4):
1. A committed, supportive, and strong management team Ð supports 6 above
2. A strong, visionary and capable leadership Ð goes with 1 ± 6 above
3. Adopting the correct strategy Ð arises from 1 to 6 above and other key abilities
4. Ability to identify and focus on market Ð especially in support to 3 ± 5 above
5. Ability to develop and sustain capabilities
6. A good customer and client relationship Ð in support in particular of 1 above
One interesting point can be noted, that is, the luck factor (a mean of 3.14 which is at the neutral point almost, neither disagreeing or agreeing as reflected by Q12) was not a dominant contributing factor for the success of these companies as compared with other factors (see Table 1 and Fig. 1).
Table 6
Top six KSFs and capabilities
Perceived KSFs (Ks) Rank Capabilities (Qs) Rank
Committed, supportive and strong management system 1 Frequently satisfy customer needs 1
Leadership 2 Regionalization 2
Adopting correct strategy 3 Developing new ideas and capabilities 3
Identify and focus on market 4 Identify market well 4
Develop and sustain capabilities 5 Identify niches well 5
Good customer and client relationship 6 Good relationship between top management and employees 6
3.3. Correlation
Pearson correlation of the perceived KSFs (K) and companies capabilities (Q) is tabulated in Fig. 5 for correlation with 95% and above confidence level (i.e., p 0.05). The first number in the cell represents the correlation coefficient and the second represents the significance level.
One important point that can be seen from the table is that all the factors are positively correlated. It means that any positive improvements in the success factors and capabilities have positive influence on other capabilities and success factors. It also shows that success factors and capabilities are not antagonistic. This is in agreement with Ghosh and Kwan (1996) finding that KSFs are generally positively biased than negatively. A further confirmation perhaps of their being positivist in nature (see Figs. 6 ± 9).
4. Discussion and conclusion
The KSFs from these `Top 50' enterprises have been determined through the perception of these companies and they are correlated with the capabilities of the organizations as shown in the correlation Table 6 and Fig. 8. Further analyses also showed that the KSFs are all positively correlated and so are the capabilities. Further, it can be seen that these KSFs and distinctive capabilities are interrelated, therefore, in their togetherness, show that successful com-panies depending on their strategy type exhibit a similarity in their strategic thrusts. For example, the ability to identify and focus on market (K1) may give rise to an ability to frequently satisfy customer needs (Q2). Furthermore, differ-ent capabilities of the organization may be elevated at the same time if a single KSF is achieved or to put it the other way, to achieve a KSF, different contributing capabilities of the company must be achieved.
At this stage of our discussion, two express/implied hypotheses can be stated: (1) that KSFs of successful companies are fairly universal and positivist in nature, and (2) that KSFs and distinctive abilities of successful SMEs are complementary and interrelated. We are able to say that these two hypotheses, similar to those in a prior study (Ghosh and Kwan, 1996), are generally validated in this study. However, when the top KSFs are ranked, the differences are apparent. Fig. 9 shows the ranking of the top six KSFs perceived by the `Top 50' enterprises surveyed in this research and the results from Ghosh and Kwan's (1996) survey of SMEs in Singapore, Malaysia, Australia, and New Zealand.
A whole number of reasons can be conjectured as to why these differences in ranking arise, for example, (Top 50) will be essentially different in character from those in the normal run of things, i.e., those who were respondents in the Ghosh et al. study. It could also be explained by the fact that more
established and successful companies (those in the Top 50) will be at an advanced stage of their corporate development. Whatever they are, it can be hypothesized hence that at different stages of corporate development, a different mix-ture of corporate capabilities/KSFs will be required; hence, a different combination of strategic thrusts.
A further hypothesis which can be said to be partially confirmed is: while KSFs and capabilities are generally universal, the degree of importance of capabilities and KSFs are viewed differently by organizations with different strat-egy types (see Tables earlier where means are compared). Both Prospector and Analyzer (we consider these two types as akin, though not identical) types companies view regio-nalization more critically for company survival than the Defender type companies, as an instance. This may be due to the inherent nature of the strategy type adopted. The Prospector type companies typically will try to be `early in' in new product and market areas, while the Analyzer will move quickly to follow a carefully examined and selected set of more promising new development in the industry and market, hence they are usually the `second-in'. Such `phe-nomenon' is less inherent within a Defender type organiza-tion, which typically concentrates in achieving efficiency. Further, close working relationship between top manage-ment and employees is valued more by the Prospector organization than Defender type organization. This may be due to Prospector organizations having to respond rapidly to early signal concerning areas of opportunity, which requires good communication and working relation-ship within the organization.
Although the degrees of importance among the KSFs are perceived differently by different strategy types, the differ-ences in means are generally quite small. Hence, only partial acceptance of this hypothesis.
In a somewhat broader sense, an examination of factor analyses of capabilities and perceived KSFs reveals that enterprises need to pay attention to the following areas which these factors constitute in order to achieve excellence in performance:
(i) Strong market orientation capability (ii) Effective management:
(a) Strong management commitment and support (b) Strong organisation and management set-up (iii) Access to broad base support and resources
(i.e., networking).
5. A discriminant analysis
The standardized coefficients used to discriminate among the different levels (i.e., Proactive (P + A) and Passive (D + R)) are (Ks are KSFs, earlier discussed):
0:161835K1ÿ0:395471K10ÿ0:837619K11 ÿ0:0906812K12ÿ0:224911K130:700035K2 0:379661K3ÿ0:253795K41:32569K5 ÿ1:24406K60:138705K71:64324K8 ÿ0:108664K9
From the relative magnitude of the coefficients in the above equation, one can determine how the independent variables are being used to discriminate among the groups. The function plot shows the centroids of the two groups.
Fig. 10 shows the results of using the derived discrimi-nant function to classify observations. It plots the two highest scores among the classification functions for each of the 29 observations used to fit the model, as well as for any new observations. For example, row 1 scored highest for Proactive Reactive =pand second highest for Proactive Reactive = r. In fact, the true value of Proactive Reactive wasp. Among the 29 observations used to fit the model, 26 or 89.6552% were correctly classified.
The model shows that the discriminant functions corre-late well with strategy types predicted.
6. Implications
The research shows that organizations with different strategy types will nevertheless show that the strategic thrusts they require (meaning those resulting from a suitable combination of KSFs and capabilities) are not essentially different. The top six KSFs are generally universal and so are the capabilities. Given the competitive environment that this region faces, hence, it can be concluded that similarities in approach over ride dissimilarities, though degrees of importance given to each KSF/capability can be different.
The majority of the enterprises surveyed adopted a Defender type strategy (D + R), which may be due to the fact that most of these enterprises are OEMs and supporting the MNCs which requires them to be efficient and watch their operating cost. As such, under such environment, the Defender type strategy may seem appropriate. In the long run however, organizations may have to evolve to adopt other strategy types and move towards a more superior strategy such as a Prospector and Analyzer types (Conant et al., 1990) as the environment changes. The trend would then be for companies to adopt a more proactive type of strategies as they need to expand in an increasingly compe-titive environment of SE Asia (and indeed, anywhere now, as one might venture to say). The discriminant analysis above shows that Miles and Snow's strategy type classifica-tion bears some statistical validity, too, though much further research is necessary. However, our own finding shows 89%
predictive ability. Success factors indicated in the model are those that will predictively distinguish one type from the other and hence, indicate strategies to be adopted.
Postscript: Since this analysis, our data have been ex-panded to include input from 55 companies at the presentation hence the data analysis and results may some-what differ from those in the article (but they are not ready at the moment of submission of this article).
Acknowledgments
We gratefully acknowledge the participation of Student Research Assistants Tee Song Jue, Tan Jok Tin, Monica Lim, and Yeo Teck Yeow.
Appendix A. Names of companies
Responded
(6) Chong Lee Leong Seng (7) Chuan Soon Huat Ind (8) C&P Rent-A-Car (9) Container Printers
(10) Excel Machine Tools *
(11) Europa Holdings *
(12) Expression Marketing Services (13) Far East Packaging Industrial
(14) GES Singapore *
(15) GUL Technologies Singapore * (16) Hai Leck Engineering
(17) Hiap Seng Engineering and Construction
(18) Hua Kok Realty *
(19) International Press *
(20) IPACS Computer Services *
(21) Jay Gee Enterprises *
(22) JIT Electronics *
(23) Kian Ann Engineering *
(24) Kin Keong Printing *
(25) Komoco Auto *
(26) Labroy Marine *
(27) Lian Hup Timber *
(28) Luxasia
(29) Manufacturing Integration Technology (30) Mech-Power Generator
(31) Micro-Machining Industries
(32) Mohamed Mustafa and Samsuddin * (33) Nobel Design and Contracts
(34) Ossia International (35) P D International
(36) Poh Cheong Concrete Pre-Cast (37) Pico Art International
(38) Richgold Industries *
(39) Royal Sporting House
(40) Salcon *
(41) Sanwa Plastics Industry *
(42) Second Chance Enterprises *
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