Effect of market orientation on SMES' performance : relevance to agro-export entrepreneurship

Abstract

This study explores the effect of market orientation on the performance of Small and Medium Enterprises (SMEs) engaged in Agro-export entrepreneurship in Sri Lanka. The research focuses on three key dimensions of market orientation such as customer orientation, competitor orientation and inter functional coordination. The primary aim is to evaluate how these variables influence SME performance in the Agro-export sector which plays a significant role in the region’s economic development. A quantitative research design adopted, and data collected through a structured questionnaire from a sample of 50 Managing directors and Executive level employees selected using convenience sampling from 20 Agro-export SMEs. Data analysis conducted using the Statistical Package for the Social Sciences (SPSS) applying descriptive statistics, correlation analysis, reliability and validity tests and multiple linear regression. The findings reveal that all three dimensions of market orientation have a significant and positive impact on SME performance. Inter functional coordination showed the strongest effect, followed by competitor orientation and customer orientation. The study concludes that market orientation is a critical strategic approach for enhancing SME performance in Agro-export activities. It recommends that SMEs improve customer focus, competitive awareness, and internal coordination. Despite its valuable findings, this study has several limitations, including the small sample size, convenience sampling, and reliance on a cross-sectional design. These constraints may affect the generalizability of the results. Future research should expand to larger samples, apply random sampling, and consider longitudinal or qualitative approaches for deeper insights. The study is particularly important for SME managers, policy makers and industry stakeholders as it highlights strategic market orientation practices that can enhance Agro export performance in developing regions.