Small and medium-size enterprises (SMEs) are increasingly confronted by challenges and opportunities in international markets. Together with large corporations, smaller firms are among the key players in international trade. Smaller firms that belong to traditional (lowtech and labour-intensive) industries can find here opportunity for growth or challenge their survival. In fact, they are especially vulnerable to global competition, particularly from players located in low-labour-cost economies. To achieve competitiveness in this context, smaller firms need to develop unique, firm-specific assets (Zucchella and Siano, 2014). Developments in this global economy have changed the traditional balance between customer and supplier. New communications and computing technology, and the reasonably open global trading systems, mean that customers have more choices and supply alternatives are more transparent. Firms need therefore to be more customer-centric and constantly re-evaluate their value propositions, especially, as technology provides low cost information and a wide diversity of solutions (Teece, 2010). Firm survival is the lowest when firms are small; thus, the development of effective strategies is critical for the continuity of business (Thornhill and Amit, 2003). According to the extant literature, increasing business competitive position, particularly SMEs, is of pivotal importance for the development and renewal of national economies (O’Cass and Sok, 2014). At present, although SMEs are recognized as important contributors to modern economies, our understanding of how they thrive in an increasingly competitive environment and achieve growth is limited (Anderson and Eshima, 2013). Thus, it is urgent to understand the drivers of SMEs performance. In a dynamic and turbulent environment, knowledge represents a critical resource to create value and to develop and sustain competitive advantages (Teece et al., 1997). However, fast-changing environments, technologies and competitiveness intensify the challenges firms face in attaining self-sufficiency in knowledge creation (Camison and Fore
´s, 2010). The competitive environment has long been considered one of the critical contingencies in strategic management. In essence, dynamism and complexity reflect the degree of uncertainty facing an organization and munificence signals a firm’s dependence on those environments for resources (Lumpkin and Dess, 2001). Miller (1983) argues that entrepreneurial strategies are likely to be more successful when addressing customers that value innovation and unique services. This is consistent with a dynamic environment. In these environments, where demand is unpredictable, firms that are oriented to pursue new markets, opportunities are abundant and performance is higher because they have a good fit between their strategic orientation and the environment. In other words, we would expect the alignment between entrepreneurial orientation (EO) and a dynamic environment to have positive performance implications (Wiklund and Shepherd, 2005).