A Hybrid SME Competitiveness Index for Production-Oriented SMEs: Evidence from Knitting Firms

Abstract

PurposeThis study presents a novel framework for measuring the competitiveness of small and medium-sized enterprises in the production sector. It addresses the gap in existing approaches by focusing on firm-level assessment rather than national or sectoral perspectives. The aim of this study is to identify the most influential factors affecting small and medium-sized enterprise (SME) competitiveness in a specific subsector and provide practical guidance for managers and policymakers.Design/methodology/approachThis study applies a combination of expert consultation and quantitative analysis. A Delphi process is used to select and define relevant indicators, while fuzzy DEMATEL is applied to understand the relationships among variables and determine their relative importance. The resulting competitiveness index is tested on textile firms operating in the knitting subsector.FindingsThe analysis reveals that firms often overlook highly important variables, such as employee skills and proactive strategies. On the other hand, factors such as cost and delivery receive more attention than their strategic weight warrants. The index helps identify such imbalances and offers potential for benchmarking.Originality/valueThis study contributes a new, empirically validated SME Competitiveness Index (SMECI) tailored to the production sector. By integrating fuzzy logic and expert-driven scaling, the SMECI accounts for variable interdependencies and sectoral details, thereby overcoming the limitations of existing indices that are static in nature. Its functionality at both macro and microlevels enables broad competitiveness assessments and detailed firm-level diagnostics. This approach enhances decision-making for SME managers and policymakers, providing a replicable model for measuring competitiveness in other production-intensive sectors.