Factors Affecting Supply Chain Management Strategies and Financial Performance toward the Competitive Advantage of Small and Medium-Sized Enterprises in Kunming, the People's Republic of China

Abstract

This study explores the intricate relationships among competitive advantage, financial performance, and Supply Chain Management (SCM) practices within Kunming's small and medium-sized enterprises (SMEs). In a diverse sample of 222 respondents, key insights were uncovered. Gathering data from 222 respondents through an online survey, the study assembled a diverse sample with a balanced gender distribution and predominantly educated and experienced participants. Multiple Linear Regression analysis revealed that SCM-related factors explain approximately 9.38% of the variability in competitive advantage. Cost Efficiency and Employee Skill Training emerged as statistically significant drivers of competitive advantage. A similar Multiple Linear Regression analysis indicated that SCM-related factors, including Profitability, Cash Flow Management, and Debt Management, significantly influence financial performance, explaining about 24.99% of the variation. The Principal Component Analysis (PCA) identified three primary components in SCM; cost efficiency, inventory management, and employee skill training. For financial performance, four principal components were identified: revenue growth, profitability, cash flow management, and debt management. One-Way Analysis of Variance (ANOVA): ANOVA tests reinforced the significance of specific SCM factors, such as cost efficiency and debt management, in explaining financial performance. Practical recommendations for Kunming SMEs, include prioritizing cost efficiency, investing in employee skill training, optimizing debt management, continuous monitoring and adaptation, leveraging technology, exploring collaborative networks, and embracing sustainability practices. In conclusion, this study reveals intricate connections between SCM strategies, financial performance, and competitive advantage in Kunming's SMEs. It underscores the pivotal roles of cost efficiency and employee skill training in shaping competitive advantage while emphasizing the interconnectedness of financial performance and competitive advantage. By adopting these strategies, Kunming's SMEs can navigate the ever-evolving business landscape and secure long-term success.

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