Nexus between consumer insight and competitive advantage: Examining the mediating role of technology adoption in small and medium enterprises in Ethiopia

Abstract

This study investigates the relationships among consumer insight, technology adoption, and competitive advantage in SMEs of Ethiopia. A total of 282 employees from small and micro enterprises (SMEs) operating in the Sidama Regional State of Ethiopia were interviewed to collect data, and structural equation modeling (SEM), supported by exploratory factor analysis (EFA) and confirmatory factor analysis (CFA), was used to analyze the results. The results of the investigation conveyed that consumer insight has a significant direct impact on competitive advantage with a 0.46 regression weight. Likewise, consumer insight has a direct significant impact on adoption of technology with a regression weight of 0.73. Technology adoption also has a positive significant effect on competitive advantage with a regression weight of 0.65. Consumer insight can influence competitive advantage directly and through adoption of technology. In the present investigation, technology adoption plays a partial mediation role between consumer insight and competitive advantage with a regression weight of 0.47. The outcome of this investigation reveals the importance of technology adoption to advance competitive advantage in SMEs, and they imply that businesses should place a strong priority on technology adoption. SMEs better execute new processes and adapt to the demands of the market by advancing technology adoption. The study provides theoretical comprehension of practices of sustainable business and provides important suggestions for firms seeking to enhance their competitiveness.