Competitor Orientation and Performance of Furniture Manufacturing SMEs in Dar es Salaam, Tanzania: The Mediating Effect of Customer Loyalty

The effect of competitor orientation on the performance of furniture manufacturing Small and Medium Enterprises was examined, with a special focus on customer loyalty as a mediator. A sample of 364 firms was obtained from the Dar es Salaam Region using proportionate stratified sampling. Data were collected using structured questionnaires and analysed inferentially using covariance-based structural equation modelling. When the mediator was controlled, the results showed that responsiveness to competitor intelligence had a significant effect on FM-SME performance, suggesting partial mediation. However, competitor intelligence generation had no significant effect on FM-SME performance when the mediator was included, implying full mediation. The conclusion is that the mere generation of competitor intelligence does not guarantee improved performance unless firms deploy strategies to reinforce customer loyalty. FM-SMEs should monitor competitors and use competitor insights and customer feedback to improve product design and features, adjust prices, and enhance customer service.