SMEs’ Competitive Advantage and Sources: Application of the Knowledge-Based View

This study aimed to determine the influence of learning orientation on competitive advantage under the mediation of entrepreneurial orientation. Guided by the knowledge-based view, this study adopted learning orientation and entrepreneurial orientation as intangible resources. A structured questionnaire was used to collect data from 300 owners-managers of welding SMEs based in Dar es Salaam, Mbeya, and Morogoro urban centres of Tanzania. By the aid of AMOS software, measurement and structural models were developed using structural equation modelling technique. The original sample was bootstrapped using 200 samples to determine the direct and indirect effects among model constructs. Findings inform that entrepreneurial orientation mediates learning orientation and competitive advantage. This study has contributed to the understanding that the combination of learning orientation and entrepreneurial orientation is a reliable source of competitive advantage. The findings imply that the knowledge-based view is suitable to explain not only physical resources but also intangible resources such as learning orientation and entrepreneurial orientation. The study recommends to welding SMEs to combine learning orientation and entrepreneurial orientation on their business endeavours. Replication of this study using other industries is recommended to establish whether the findings of this study are specific to the welding industry or applicable to other industries.