STRATEGIC ADAPTATION IN TURBULENT ENVIRONMENTS: LEVERAGING DIFFERENTIATION STRATEGY FOR IMPROVING PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES

Abstract It is imperative that to achieve and sustain competitive advantage in the face of turbulent environments, businesses need to adopt a strategic posture that emphasises the path to be undertakenin order to achieve their goals. The study examines the impact of strategic adaptation through differentiation strategies in enhancing the performance of small and medium scale enterprises in Nigeria's turbulent business environment, with a specific focus on innovation and technological adaptations. The study adopted a multi-stage sampling method to select a sample of 2,175 SME ownersas participants from various sectors, and across six States representing the six Nigeria’s geopolitical zones. Data collected were analysed through descriptive statistics and structural equation modeling.The findings reveal statistically significant correlations between innovation, technology adaptations, brand identification, and continuous product development with improved firm performance.The findings displays the critical role innovation and technology adaptations playin the strategic differentiation of SMEs, suggesting that businesses that invest in these areas are more likely to achieve superior performance in challenging economic climates.It is recommended that SME managers should cultivate a proactive innovation culture, strengthen their brand equity, and institutionalise continuous product development processes to remain competitive and resilient in the face of ongoing environmental disruptions.