THE IMPACT OF KPIS ON OPERATIONAL EFFICIENCY AND COMPETITIVE ADVANTAGE IN TRADING ENTERPRISES

Keywords: Competitive Advantage, Firm Performance, Key Performance Indicators, Operational Efficiency, Trading Enterprises

Abstract

This study investigates the impact of key performance indicators on operational efficiency and competitive advantage in trading enterprises, using secondary data and econometric modeling. Analyzing data from 50 firms across seven countries over a five-year period (2019-2023), the research employs a panel data regression model to assess how various KPIs influence operational outcomes and market positioning. The results reveal that KPIs related to productivity, cost management, and quality control significantly enhance operational efficiency and competitive advantage. Additionally, firm size and market conditions are found to moderate these relationships, highlighting the importance of contextual factors in KPI effectiveness. The results of the study show that KPIs are effective tools for optimizing operational processes. Firms with high KPIs achieve a better competitive position in the market, reinforcing the notion that well-managed KPIs significantly contribute to a firm's ability to outperform competitors. This study contributes to the academic understanding of KPI impact by confirming established theories and introducing new insights into the role of external factors. Practically, the findings offer actionable recommendations for trading enterprises to optimize their KPI frameworks, suggesting that tailored KPI strategies can lead to substantial improvements in performance and market success. The study underscores the critical role of KPIs as strategic tools for enhancing firm performance and maintaining a competitive edge in the global market. The research's limitations include the relatively small sample size and limited time frame, which suggest the need for further studies to validate and extend these findings. Trading companies must constantly improve their KPI strategies to adapt to changing conditions and maximize their benefits, ensuring they remain leaders in their industries.

Downloads

Download data is not yet available.

Author Biographies

Іhor Rekunenko, Sumy State University 116, Kharkivska Str., Sumy, 40007, Ukraine

D.Sc. (Economics), Professor

Iana Kobushko, Sumy State University 116, Kharkivska Str., Sumy, 40007, Ukraine

PhD (Economics), Associate Professor

Roman Shubenko, Сумський державний університет, вул. Харківська, 116, Суми, 40007, Україна

PhD Student

References

Albaz, A., Dondi, M., Rida, T., & Schubert, J. (2020). Unlocking growth in small and medium side enterprises. McKinsey and Company. Retrieved from https://www.mckinsey.com/industries/public-and-socialsector/our-insights/unlocking-growth-in-small-and-medium-size-enterprises

Battaglia, D., Neirotti, P., & Paolucci, E. (2018). The role of R&D investments and export on SMEs’ growth: a domain ambidexterity perspective. Management Decision, 56(9), 1883–1903. doi: https://doi.org/10.1108/MD-02-2017-0136

Carboni, O. A., & Medda, G. (2019). Does R&D spending boost tangible investment? An analysis on European firms. Applied Economics, 51(28), 3049–3065. doi: https://doi.org/10.1080/00036846.2018.1564119

Ghauri, P., Gronhaug, K., & Strange, R. (2020). Research Methods in Business Studies, 5th ed. Cambridge, Cambridge University Press. doi: https://doi.org/10.1017/9781108762427

Gherghina, S. C., Botezatu, M. A., Hosszu, A., & Simionescu, L. N. (2020). Small and medium-sized enterprises (SMEs): the engine of economic growth through investments and innovation. Sustainability, 12(1), 347. doi: https://doi.org/10.3390/SU12010347

Chiarini, A., Castellani, P., Rossato, C., & Cobelli, N. (2020). Quality management internal auditing in small and medium-sized companies: an exploratory study on factors for significantly improving quality performance. Total Quality Management and Business Excellence, 32(15–16), 1829–1849. doi: https://doi.org/10.1080/14783363.2020.1776101

Gomolka, C. (2020). 5 KPIs to measure small business growth. Retrieved from https://www.sage.com/en-us/blog/5-kpis-to-measure-small-business-growth

Hung, T. H. (2018). Management’s perception of key performance indicators for vietnam small and medium enterprises. VNU Journal of Economics and Business, 34(1), 66–75. doi: https://doi.org/10.25073/2588-1108/vnueab.4138

Jituri, S., Fleck, B., & Ahmad, R. (2018). A methodology to satisfy KPI for successful ERP implementation in small and medium enterprises. International Journal of Innovation and Technology Management, 9(2), 26–57. doi: https://doi.org/10.18178/ijimt.2018.9.2.792

Koldovskyi, A. (2023). The effect of innovation resource management and bank competition output in Ukraine. Global Scientific and Academic Research Journal of Economics, Business and Management, 2(8), 23-30. Retrieved from https://gsarpublishers.com/abstract-491/

Kolos, I. (2018). Formation of the key performance indicators system for lean management of enterprises. Technology Audit and Production Reserves, 5(4(43)), 15–19. doi: https://doi.org/10.15587/2312-8372.2018.146342

Kretov, D., Mindova, O., Aitaliev, B., & Koldovskyi, A. (2023). Development Management of Interbank Competition in the Corporate Lending Market. Economics Ecology Socium, 7, 89-99. doi: https://doi.org/10.31520/2616-7107/2023.7.2-7

Leonov, Y., Fedirko, N., Bradul, O., Koldovskiy, A., & Yunatskyi, M. (2024). Effectiveness of mechanisms of anti-corruption management in modern conditions. AD ALTA Journal of Interdisciplinary Research, 14(1), 45-50. doi: https://doi.org/10.33543/1401394550

Llivisaca, J., Jadan, D., Guamán, R., Arcentales-Carrion, R., Peña, M., & Siguenza-Guzma, L. (2020). KPI for the supply chain in small and medium-sized enterprises based on balance score card. test engineering and management. TEST Engineering and Management, 83, 25933–25945. Retrieved from http://www.testmagzine.biz/index.php/testmagzine/article/view/12378

Louw, C., & Nieuwenhuizen, C. (2020). Digitalization strategies for SMEs: a cost vs. skill approach for website development. African Journal of Science, Technology, Innovation and Development, 12(2), 195–202. doi: https://doi.org/10.1080/20421338.2019.1625591

Lukonga, I. (2020). Harnessing digital technologies to promote SMEs and inclusive growth in the Middle East, North Africa, Afghanistan and Pakistan (MENAP) Region. IMF Working Papers, 135. doi: https://doi.org/10.5089/9781513550770.001

Mazur, V., Koldovskyi, A., Ryabushka, L., & Yakubovska, N. (2023). The formation of a rational model of management of the construction company’s capital structure. Financial Credit Activity: Problems of Theory and Practice, 6(53), 128–144. doi: https://doi.org/10.55643/fcaptp.6.53.2023.4223

Prokopenko, O., Chechel, A., Koldovskiy, A., & Kldiashvili, M. (2024). Innovative Models of Green Entrepreneurship: Social Impact on Sustainable Development of Local Economies. Econ. Ecol. Socium., 8, 89-111. doi: 10.61954/2616-7107/2024.8.1-8

Scuotto, V., Arrigo, E., Candelo, E., & Nicotra, M. (2020). Ambidextrous innovation orientation affected by the digital transformation: a quantitative research on fashion SMEs. Business Process Management Journal, 26(5), 1121–1140. doi: https://doi.org/10.1108/BPMJ-03-2019-0135

Tieber, A., Manolache, D. S., & Gheorghe, M. (2019). Development of KPI modules for small and medium-sized enterprises in production industry. IOP Conference Series Materials Science and Engineering, 682(48). doi: https://doi.org/10.1088/1757-899X/682/1/012020

Vaio, A. D., & Varriale, L. (2017). Monitoring and measuring event decision-making process using KPI: evidence from Italian cruise terminals. Chinese Business Review, 16(8), 382–390. doi: https://doi.org/10.17265/1537-1506/2017.08.002

Published
2024-12-31
How to Cite
RekunenkoІ., Kobushko, I., & Shubenko, R. (2024). THE IMPACT OF KPIS ON OPERATIONAL EFFICIENCY AND COMPETITIVE ADVANTAGE IN TRADING ENTERPRISES. Social Economics, (68). https://doi.org/10.26565/2524-2547-2024-68-16
Section
MANAGEMENT