SME'S SUPPORT AND REGIONAL POLICY IN EU - THE NORTE-LITORAL PORTUGUESE EXPERIENCE



Taking Johnson and Scholes (1993) strategy directions, we classified them in three
types according to the attitude of the firm towards change in the environment:
passive
(consolidation of the market position), active (growth in the present market,
diversification) and
innovative (product development, market development).

The analysis of Table 2 shows two ‘composite groups’: 57% of the firms have invested
in their
modernisation; 31% of the firms develop an innovative strategy and/or show an
offensive investment policy. The remaining firms (12%) are in the middle of these two
groups - they pursue an
active strategy based on a dynamic modernisation.

Table 2

Strategy
Direction

Clusters

TOTAL

1

2

3

4

Consolidation

Count

% within Strategy Direction

% within Clusters

1

2,3%
50,0%

17

38,6%

43,6%

24

54,5%

40,0%

2

4,5%

40,0%

44
100,0%
41,5%

Market growth

Count

% within Strategy Direction

% within Clusters

11

34,4%

28,2%

18

56,3%

30,0%

3

9,4%

60,0%

32
100,0%
30,2%

Product
development

Count

% within Strategy Direction

% within Clusters

1

5,9%
50,0%

3

17,6%

7,7%

13

76,5%

21,7%

17

100,0%

16,0%

Market
development

Count

% within Strategy Direction

% within Clusters

6
60,0%
15,4%

4

40,0%

6,7%

10

100,0%

9,4%

Diversification

Count

% within Strategy Direction

% within Clusters

2

66,7%

5,1%

1

33,3%

1,7%

3
100,0%
2,8%

TOTAL

Count

% within Strategy Direction

% within Clusters

2

1,9%
100,0%

39

36,8%

100,0%

60

56,6%

100,0%

5

4,7%
100,0%

106

100,0%

100,0%

Figure 1 presents the percentage of firms in each cluster investing in four different types
of innovation. In general terms, a large majority of firms in each cluster invested in
modernisation of management and, by contrast, a few firms invested in new services to
clients,
which is a more sophisticated factor of competitiveness. As expected, product
innovation
dominate in Cluster 1 which is associated predominantly to R&D
investment, and greater incidence of
process innovation in Cluster 3 is associated with
the preference of firms in that cluster for productive equipment.



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