Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 9, No. 9, 846-861 2025 Publisher: Learning Gate DOI: 10.55214/2576-8484.v9i9.9999 © 2025 by the authors; licensee Learning Gate © 2025 by the authors; licensee Learning Gate History: Received: 24 July 2025; Revised: 1 August 2025; Accepted: 6 August 2025; Published: 15 September 2025 * Correspondence: wyyin@assist.ac.kr Why opportunities matter more than challenges: Lessons from Korean SMEs’ export strategies Byungki Lee1, Wenyan Yin2*, Ureta Vaquero Ivan3 1,2Seoul Business School, aSSIST University, South Korea; wyyin@assist.ac.kr (W.Y.). 3Geneva Center for Security Policy and Master in International Security, University of Geneva, Switzerland. Abstract: This study examines why opportunities play a more decisive role than challenges in shaping the export strategies and performance of Korean SMEs, using the SCOPE framework. Focusing on four key components—strategy, challenge, opportunity, and export—within the SCOPE framework, the study investigates how external challenges and opportunities influence SMEs’ strategy adoption and export outcomes. Additionally, it explores the moderating role of foreign direct investment (FDI). Data were collected through a structured online survey, yielding 500 valid responses from SMEs across diverse industries in South Korea. Structural equation modeling (SEM) and confirmatory factor analysis (CFA) reveal that challenges exert no significant influence on strategy adoption, whereas opportunities have a strong positive effect. Strategies mediate the relationship between opportunities and export performance, while FDI further reinforces this effect, particularly by enhancing strategic export outcomes that contribute to long-term performance. By applying the SCOPE framework, this research offers both theoretical contributions to SME internationalization and practical implications for managers and policymakers aiming to strengthen SMEs’ global competitiveness through an opportunity-focused approach. Keywords: Challenges, Export performance, Foreign direct investment (FDI), Opportunities, SCOPE framework, SMEs, Strategies. 1. Introduction Internationalization is a critical strategy for small and medium-sized enterprises (SMEs), fostering enhanced competitiveness, innovation, and long-term resilience [1-3]. The contemporary global business landscape, however, is undergoing rapid transformation, shaped by escalating geopolitical tensions, accelerated technological advancements, and reconfigured global supply chains [4, 5]. These dynamics present both opportunities and challenges for SMEs, which must navigate increasingly complex and volatile market environments to sustain their international growth [6, 7]. Government policy is instrumental in facilitating the internationalization of SMEs. Support mechanisms include institutional infrastructure, strategic networks, market intelligence, innovation and technological capacity building, and human capital development [8-10]. Financial instruments, such as export insurance, subsidized financing, and exchange rate risk mitigation, bolster SME resilience in volatile global markets [11]. Additionally, procedural reforms and digital transformation initiatives reduce entry barriers, enabling SMEs to navigate complex international markets more effectively [12, 13]. Despite advancements in policy support, many government frameworks fail to address the diverse needs of SMEs pursuing internationalization. Standardized and inflexible initiatives often fall short in enhancing firms’ strategic capabilities [14]. While subsidies, tax incentives, and export promotion programs are widely implemented, their effectiveness is inconsistent, constrained by a one-size-fits-all approach that overlooks firms’ heterogeneity in orientation, industry, and developmental stage [15-17] https://orcid.org/0009-0000-1538-7146 https://orcid.org/0000-0001-6835-2975 https://orcid.org/0009-0002-1100-6195 847 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 9, No. 9: 846-861, 2025 DOI: 10.55214/2576-8484.v9i9.9999 © 2025 by the authors; licensee Learning Gate Empirical evidence corroborates this critique: studies in Malaysia, France, and Indonesia demonstrate that, although government support can facilitate internationalization, firm-specific resources and capabilities are critical determinants of export success [17-19]. In South Korea, government support for SMEs reveals notable structural limitations. Policies promoting integration into conglomerate-led global value chains often constrain SMEs’ independent strategic development [20]. Traditional internationalization theories, such as the Uppsala Model, provide valuable insights but do not fully address the multidimensional challenges encountered by resource-constrained SMEs in turbulent global markets [21-23]. These models or theories often overlook the dynamic nature of networked environments and the strategic agility essential for SMEs to thrive and succeed in such contexts [19, 24]. This study addresses the identified theoretical gaps by investigating how Korean SMEs strategically engage with global markets amidst resource constraints and external turbulence to enhance export performance. It adopts the SCOPE Framework [21]—comprising Strategies, Challenges, Opportunities, Problems, and Exporting—as its analytical lens. This framework provides a structured approach to analyzing the interplay between internal strategic decisions and external environmental pressures, functioning as both a diagnostic tool and a guide for formulating adaptive strategies that balance constraints with opportunities in international markets. The research model and hypotheses are tested using survey data from 500 SMEs across diverse industries in South Korea. In addition to providing empirical insights, this study advances the SME internationalization literature, particularly in the Korean context, where prior research has largely emphasized the role of firms’ unique resources and government policy necessary for strengthening the competitive advantage of SMEs. This study, however, demonstrates how SMEs can mobilize opportunity-driven strategies to capitalize on market opportunities and respond to emerging challenges, thereby shaping export performance under resource constraints. “By operationalizing the SCOPE framework through the 4S principles, this study introduces a systematic perspective that connects environmental perceptions to strategy adoption, which in turn influences performance outcomes. Moreover, it extends internationalization theory by highlighting the moderating role of FDI in shaping long-term competitive advantage, providing both scholars and practitioners with a framework that enables SMEs to achieve sustainable growth and maintain competitiveness in an era of heightened uncertainty. 2. Theoretical Background The Uppsala Model conceptualizes internationalization as a gradual and incremental process, driven by experiential learning and increasing resource commitments to foreign markets [25-27]. This theory has been foundational for understanding how firms, particularly SMEs, systematically expand their international presence [28-30]. However, empirical evidence reveals limitations in its applicability to the diverse internationalization paths of SMEs [31-33]. In particular, its emphasis on sequential expansion does not fully account for the rapid internationalization of many technology firms, which often align with the Born Global or International New Venture paradigms. Such firms frequently bypass traditional stages of gradual expansion, entering multiple foreign markets early in their development— driven by innovation, digital connectivity, and a global orientation [34]. While the Uppsala Model remains relevant in certain contexts, it provides only a partial explanation of the strategic dynamics shaping SME internationalization in today’s complex and rapidly evolving global business environment. Beyond firm-level factors, existing studies also tend to overlook the influence of macro-level conditions—such as geopolitical tensions—on the internationalization of SMEs. For example, the ongoing U.S.–China trade conflict has placed considerable pressure on Korean exporters, forcing them to adopt more flexible and adaptive strategies than those prescribed by traditional models [35]. To address these gaps, this study adopts the SCOPE Framework [21] which encompasses Strategies, Challenges, Opportunities, Problems, and Exporting, as a comprehensive analytical lens for SME internationalization. This framework provides a structured approach to diagnosing the interplay between internal strategic decisions and external environmental factors. The theoretical and practical 848 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 9, No. 9: 846-861, 2025 DOI: 10.55214/2576-8484.v9i9.9999 © 2025 by the authors; licensee Learning Gate validity of the SCOPE framework has been increasingly recognized in the international business literature. For example, Rakshit, et al. [36] employed SCOPE to examine the influence of blockchain technology on SME internationalization in India. Similarly, Calheiros-Lobo, et al. [37] identified SCOPE as a notable modern framework, highlighting its utility in guiding internationalization strategies and in analyzing antecedents and outcomes of the process. This study adopts the SCOPE framework as its guiding theoretical lens. However, the “Problems” component is excluded from the research model because it primarily reflects universal financial constraints common to all SMEs, which are structural rather than strategic in nature. Within the framework, the “Strategies” component is operationalized through the Pentagon 5S principles—Synergize, Set-in-Order, Standardize, Succeed, and Strategize—which collectively serve as a conceptual foundation for designing coherent and agile internationalization strategies. In this study, four of these principles—Synergize, Set-in-Order, Standardize, and Strategize—are employed. The element of “Succeed” is excluded, as it represents a performance outcome rather than a process-oriented strategic input. The four selected principles, by contrast, offer actionable guidance for structuring and implementing effective internationalization strategies in SMEs. Their application aligns with the study’s emphasis on adaptive, process-based strategy formulation in dynamic and resource-constrained environments. Specifically, “Synergize” emphasizes consolidating internal strengths and aligning resources to external pressures; “Set-in-Order” focuses on workflow structuring and resource prioritization; “Standardize” ensures consistency and predictability, which are critical for managing external uncertainties; and “Strategize” underscores proactive actions such as technological enhancement, competitor analysis, and cost-efficient procurement. This study empirically examines the influence of the SCOPE framework’s elements on the internationalization performance of South Korean SMEs. The research model integrates key variables— Challenges, Opportunities, Strategy, Export Performance, and Foreign Direct Investment (FDI)—to investigate their interrelationships and collective impact on internationalization success. Corresponding hypotheses are developed to test the theoretical assumptions embedded in the framework and to generate actionable insights into how SMEs can more effectively navigate the complexities of global markets. 3. Hypotheses Development 3.1. Challenges, opportunities, and firms’ strategy adoption Global challenges increasingly compel SMEs to adopt adaptive strategies to mitigate risk and maintain competitiveness in dynamic and uncertain environments. At the same time, emerging opportunities in the international markets encourage SMEs to leverage the 4S framework—Strategize, Synergize, Set-in-Order, and Standardize—as a structured pathway to achieving sustainable competitive advantage. The Strategize dimension enables SMEs to respond proactively to external shocks through initiatives such as early internationalization and joint ventures, for risk diversification [21, 38]. Moreover, it facilitates the identification of untapped market, the implementation of innovative pricing, and customized offerings to meet evolving consumer demands [39, 40]. The Synergize component promotes the optimization of operational capacity and collaboration— both intra-organizational and inter-organizational—thereby strengthening resilience and fostering innovation during periods of crisis [41, 42]. In more stable environments, Synergize supports the alignment of internal capabilities with external opportunities, enabling scalable and innovation-driven business models [21]. The Set-in-Order principle emphasizes structured procedures, workflow organization, and quality assurance protocols to enhance internal efficiency, build customer trust, and ensure compliance with international standards [21, 43, 44]. It further supports strategic prioritization of high-value activities, 849 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 9, No. 9: 846-861, 2025 DOI: 10.55214/2576-8484.v9i9.9999 © 2025 by the authors; licensee Learning Gate efficient resource allocation, and timely responsiveness to new opportunities, thereby contributing to long-term agility and sustainability [45]. The Standardize principle allows SMEs to streamline core processes such as inventory control, production scheduling, and task management, reducing inefficiencies and sustaining operations amid external disruptions [45, 46]. Standardization also ensures consistent product and service quality across markets, enhancing brand reliability and facilitating international expansion [42, 43]. By enabling process scalability and the efficient utilization of scarce resources, Standardize reinforces SMEs’ competitiveness in global markets. Collectively, the interrelated elements of the 4S framework provide SMEs with a robust strategic foundation to address external challenges while simultaneously exploiting international opportunities. Each principle contributes to overcoming barriers to internationalization, supporting innovation, and sustaining long-term competitiveness. On this basis, the following hypotheses are proposed: H1a: The challenges faced by SMEs are positively associated with the adoption of strategy aimed at overcoming obstacles and enhancing competitiveness. H1b: The opportunities available to SMEs are positively associated with the adoption of strategy aimed at leveraging growth potential and enhancing competitiveness. 3.2. The mediating role of strategy adoption SMEs face a wide range of challenges in the global marketplace, including resource constraints, regulatory complexities, and intensified competitive pressures [21]. The strategic application of the 4S framework—comprising Strategize, Synergize, Standardize, and Set-in-Order—offers an integrative mechanism to mitigate these challenges, enhance competitiveness, and improve both the financial and strategic dimensions of export performance. From a Strategize perspective, SMEs can strengthen financial outcomes through resource-efficient approaches. Digital marketing and e-commerce platforms provide cost-effective channels for global outreach [47] and collaboration with government trade agencies facilitates access to export incentives and financial assistance [48]. Therefore, “Strategize” enables SMEs to enhance market positioning by identifying and acquiring external resources aligned with international growth opportunities. The Synergize dimension improves financial performance by fostering organizational integration and collaborative efficiencies. Strengthened supply chain partnerships stabilize procurement costs and mitigate market volatility [49]. Additionally, synergizing promotes operational alignment and coherent resource use, allowing SMEs to leverage core competencies rather than disperse efforts across unrelated diversification, thereby enhancing efficiency and brand credibility in international markets. Standardization enhances profitability by reducing waste, optimizing processes, and improving resource utilization. Clear operational procedures and management guidelines strengthen decision- making and employee effectiveness [50, 51] while streamlined supply chains improve cost-efficiency and operating margins [49]. Moreover, adherence to global quality standards facilitates cooperation with international partners and reinforces brand credibility, thereby strengthening SMEs’ competitiveness in international markets [46]. The Set-in-Order principle strengthens financial resilience by enhancing process management and resource optimization. Digital inventory systems help reduce carrying costs and prevent stockouts, while improved cash flow management supports long-term financial sustainability [37, 47]. Strategically, set-in-order practices foster digital export readiness and mitigate risks associated with foreign market entry [52]. Ongoing refinement of internal processes further enables SMEs to remain competitive in volatile global environments [48]. Collectively, the 4S framework provides SMEs with a comprehensive foundation for navigating external threats while exploiting emerging opportunities. By integrating financial and strategic dimensions, these practices enhance both short-term export performance and long-term competitiveness. Financial export performance is measured through indicators such as profitability, sales growth, and overall financial improvement, while strategic (non-financial) export performance encompasses 850 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 9, No. 9: 846-861, 2025 DOI: 10.55214/2576-8484.v9i9.9999 © 2025 by the authors; licensee Learning Gate enhanced global competitiveness, improved market positioning, increased international market share, and the ability to seize emerging opportunities [49]. On this basis, the following hypotheses are proposed: H2a: The strategy adoption by SMEs mediates the relationship between challenges faced and financial export performance. H2b: The strategy adoption by SMEs mediates the relationship between challenges faced and strategic export performance. H2c: The strategy adoption by SMEs mediates the relationship between opportunities available and financial export performance. H2d: The strategy adoption by SMEs mediates the relationship between opportunities available and strategic export performance. 3.3. The moderating role of FDI Foreign Direct Investment (FDI) plays a pivotal role in shaping the export performance of SMEs, influencing both financial and strategic dimensions. As a moderating factor, FDI can strengthen the effectiveness of strategy frameworks—such as the 4S framework—by helping firms overcome resource constraints, reduce operational costs, access new markets, and enhance innovation capabilities. From a financial perspective, four different forms of FDI motivations facilitate firms to improve firms’ competitive advantages [53-56]. Resource-seeking FDI enables SMEs to secure critical raw materials and inputs that may be costly or unavailable domestically, thereby lowering production costs and improving profit margins. Efficiency-seeking FDI further enhances financial outcomes by leveraging lower-cost labor and production infrastructures in host countries. For example, SMEs in ASEAN economies have improved profitability and expanded export capacity by relocating operations to more cost-effective environments [57] Market-seeking FDI contributes to financial performance by facilitating direct access to foreign markets. In Korea’s case, SMEs often follow the FDI decisions of large firms such as Samsung Electronics and Hyundai Motors, collocating in host markets and generating stable revenue through localized operations [53]. Beyond financial benefits, FDI contributes to strategic performance, including long-term competitiveness, technological advancement, and market positioning. By fostering deeper integration into global value chains and expanding cross-border networks, FDI enhances SMEs’ access to market intelligence and enables risk diversification across geographies [42, 55]. These strategic advantages help SMEs cultivate sustainable competitiveness through innovation, agility, and global presence. Based on this reasoning, the following hypotheses are proposed: H3a: FDI moderates the relationship between strategies adopted by SMEs and financial export performance. H3b: FDI moderates the relationship between strategies adopted by SMEs and strategic export performance. We, therefore, develop our research model as shown in Figure 1. Figure 1. Conceptual model. 851 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 9, No. 9: 846-861, 2025 DOI: 10.55214/2576-8484.v9i9.9999 © 2025 by the authors; licensee Learning Gate 4. Research Methodology 4.1. Measurement The key constructs—strategies, challenges, opportunities, exporting (financial and strategic export performance)—were primarily derived from the SCOPE framework proposed by Paul [21]. Challenges and opportunities serve as independent variables, while strategy adoption, operationalized through the 4S framework (Strategize, Synergize, Standardize, Set-in-Order), functions as the mediating variable. Export performance is measured using two of the three dimensions introduced by Zou, et al. [58]— financial and strategic—consistent with a recent study by Traiyarach and Banjongprasert [49]. Additionally, FDI was included as a moderating variable, measured through items assessing its presence and underlying motivations: market-seeking, efficiency-seeking, resource-seeking, and strategic asset- seeking FDI [56]. To ensure content and construct validity, all measurement items were adapted from established scales in the international business and SME literature. Items were evaluated using a five- point Likert scale (1 = strongly disagree to 5 = strongly agree). The robustness of the measurement model was assessed through confirmatory factor analysis (CFA), complemented by reliability tests to examine internal consistency and the validity of each construct. 4.2. Sample and Data A web-based survey was administered to business professionals employed in Korean SMEs actively engaged in export activities. To ensure data reliability and reduce sampling bias, the survey was implemented through a professional external research agency. Of the 1,000 invitations distributed, 528 responses were received. After excluding 28 incomplete or invalid responses, 500 valid cases were retained for the final analysis. The survey was conducted over a 10-day period, from December 21 to December 30, 2024. The participating firms exhibited a high degree of international engagement, with an average of 11 years of export experience. The sample represented a broad cross-section of industries, including electricity and electronics (24.4%), industrial machinery (18.6%), agriculture and processed food (9.6%), information technology (9.4%), petrochemicals (5.2%), and pharmaceuticals (4.8%). Respondents also held diverse professional roles across multiple organizational functions (see Table 1). 852 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 9, No. 9: 846-861, 2025 DOI: 10.55214/2576-8484.v9i9.9999 © 2025 by the authors; licensee Learning Gate Table 1. The demographic characteristics. Category Frequency Percentage (%) Gender Male 270 54 Female 230 46 Age 20-29 years old 50 10 30-39 years old 168 33.6 40-49 years old 171 34.2 50 years old or older 111 22.2 Industry Machinery 93 18.6 Agriculture/ Processed Food 48 9.6 Electricity and Electronics 122 24.4 Pharmaceuticals 24 4.8 Petrochemicals 26 5.2 Information Technology 47 9.4 Others 140 28 Position Top Management 20 4 Export and Marketing Management 93 18.6 Operation and Supply Chain Management 128 25.6 Finance and Management 149 29.8 Others 110 22 Export Values Less than US$1 million 172 34.4 US$1 million-Less than US$5 million 121 24.2 US$5 million-Less than US$10 million 104 20.8 US$10 million-Less than US$50 million 79 15.8 US$50 million or more 24 4.8 Export period Less than 1 year 49 9.8 1-Less than 3 years 106 21.2 4-Less than 6 years 96 19.2 7-Less than 10 years 105 21 11 years or more 144 28.8 Total 500 100 4.3. Data Analysis Method Data were analyzed in multiple stages to ensure the robustness and validity of the findings. In the first stage, preliminary analyses were conducted, including examinations of data distribution, frequency distributions, and descriptive statistics. These analyses provided insights into respondent characteristics and revealed general patterns within the dataset. In the second stage, confirmatory factor analysis (CFA) was employed to validate the measurement model. Internal consistency, reliability, and both convergent and discriminant validity were assessed. Discriminant validity was further evaluated using the Heterotrait–Monotrait Ratio of Correlations (HTMT) [59]. In the third stage, the conceptual research model and proposed hypotheses were tested using Partial Least Squares Structural Equation Modeling (PLS-SEM), implemented in SmartPLS 4.0. As reported in Table 2, all factor loadings exceeded the 0.60 threshold, confirming acceptable indicator reliability. Cronbach’s alpha coefficients for each construct also surpassed the 0.60 benchmark, demonstrating satisfactory internal consistency. Convergent validity was confirmed as the average variance extracted (AVE) values for all constructs exceeded 0.50, indicating that latent variables captured a substantial proportion of variance. Composite reliability (CR) values were above 0.70 for all 853 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 9, No. 9: 846-861, 2025 DOI: 10.55214/2576-8484.v9i9.9999 © 2025 by the authors; licensee Learning Gate constructs, further confirming strong internal consistency. Collectively, these results establish a solid foundation for the subsequent structural model analysis. Table 2. Construct, factor loadings, AVE and Cronbach’s α. Variables Items Factor loading AVE CR Cronbach's α Challenge CH01 0.785 0.561 0.791 0.727 CH02 0.657 CH03 0.626 Opportunity OP01 0.776 0.53 0.815 0.731 OP02 0.764 OP03 0.641 OP04 0.668 Strategy ST01 0.84 0.777 0.933 0.925 ST02 0.696 ST03 0.679 ST04 0.618 SYN01 0.819 SYN02 0.695 STD01 0.8 STD02 0.716 STD03 0.702 STD04 0.669 SET01 0.803 SET02 0.761 SET03 0.599 Export Performance FNPF01 0.85 0.856 0.923 0.938 FNPF02 0.786 FNPF03 0.779 FNPF04 0.763 STPF01 0.832 STPF02 0.798 STPF03 0.782 STPF04 0.719 The HTMT values, reported in Table 3, were all well under the liberal cutoff of 0.90 [60, 61] confirming that discriminant validity was satisfactorily established across constructs. Variance inflation factor (VIF) values were also below the conservative threshold of 3.3, indicating no issues of multicollinearity among variables. Table 3. Discriminant validity of constructs. CHLL OPPT STRG FNEP STEP CHLL OPPT 0.251 STRG 0.159 0.573 FNEP 0.088 0.792 0.533 STEP 0.157 0.816 0.634 0.874 Note: CHLL = Challenge, OPPT = Opportunity, STRG = Strategy, FNEP = Financial export performance, STEP = Strategic export performance 854 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 9, No. 9: 846-861, 2025 DOI: 10.55214/2576-8484.v9i9.9999 © 2025 by the authors; licensee Learning Gate 5. Results 5.1. Structural Model and Hypothesis Testing The SEM analysis, based on the conceptual framework developed in this study, provides important insights into how challenges and opportunities encountered by SMEs shape their strategic responses and, subsequently, influence both the financial and strategic dimensions of export performance. The overall path coefficients from the SEM are illustrated in Figure 2, while the detailed findings are reported below and summarized in Table 4. Figure 2. Path analysis results. Note: *** p < 0.001, ** p < 0.01, * p < 0.05. For the direct path, the challenges faced by SMEs do not have a statistically significant effect on strategy adoption. The regression coefficient for this relationship was 0.027, with a standard error of 0.043. The critical ratio (analogous to the t-value in regression analysis) is 0.637, and the corresponding p-value is 0.524—well above the conventional threshold of 0.05. These results indicate that perceived challenges do not significantly influence SMEs’ strategic responses. Therefore, Hypothesis H1a is not supported. Table 4. Structural analysis results. Hypothesis Estimate SD t-value p LBCI UBCI Decision Direct paths H1a Strategy ← Challenge 0.027 0.043 0.637 0.524 -0.042 0.125 Not Supported H1b Strategy ← Opportunity 0.504 0.037 13.491 *** 0.428 0.574 Supported Mediation paths H2a Financial export performance ← Strategy ← Challenge 0.013 0.021 0.638 0.524 -0.021 0.062 Not Supported H2b Strategic export performance ← Strategy ← Challenge 0.016 0.025 0.636 0.525 -0.024 0.073 Not Supported H2c Financial export performance ← Strategy ←Opportunity 0.249 0.034 7.320 *** 0.185 0.319 Mediated H2d Strategic export performance ← Strategy ←Opportunity 0.295 0.036 8.282 *** 0.226 0.367 Mediated Note: ***𝑝<0.001, ** 𝑝<0.01, * 𝑝<0.05. SRMR=0.059, d_ULS=1.646, d_G=0.584, Chi-square=1758.394, NFI=0.815. However, opportunities perceived by SMEs have a significant positive effect on strategy formulation. The regression coefficient is 0.504, with a standard error of 0.037. The critical ratio is 13.491, and the 855 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 9, No. 9: 846-861, 2025 DOI: 10.55214/2576-8484.v9i9.9999 © 2025 by the authors; licensee Learning Gate relationship is statistically significant at p < 0.001. These results indicate that SMEs facing market opportunities are more likely to adopt strategic initiatives. Therefore, Hypothesis H1b is supported. The overall model fit evaluation confirmed the adequacy of the structural model. The fit indices are as follows: SRMR = 0.059, dULS = 1.646, dG = 0.584, χ² = 1758.394, and NFI = 0.815. All values fell within established thresholds, indicating a satisfactory model fit. 5.2. Test for mediation effect For the indirect path, the results showed that the effect of challenges on strategy is not statistically significant, indicating that challenges faced by SMEs do not meaningfully influence the development of strategic responses among SMEs. Consequently, the indirect effects of challenges on financial export performance (β = 0.013, S.E. = 0.021, C.R. = 0.638, p = 0.524) and on strategic export performance (β = 0.016, S.E. = 0.025, C.R. = 0.636, p = 0.525), both mediated by strategy, are statistically insignificant. Therefore, Hypotheses H2a and H2b are not supported. In contrast, the effect of opportunities on strategy is strong and statistically significant, indicating that SMEs that actively recognize and leverage market opportunities are more likely to adopt robust strategic initiatives. This strategic engagement led to significant indirect effects on export performance. Specifically, the indirect effect of opportunities on financial export performance via strategy is significant (β = 0.249, S.E. = 0.034, C.R. = 7.320, p < 0.001), supporting Hypothesis H2c. Likewise, the indirect effect of opportunities on strategic export performance through strategy is also significant (β = 0.295, S.E. = 0.036, C.R. = 8.282, p < 0.001), confirming Hypothesis H2d. These findings indicate that strategy does not mediate the relationship between challenges and export performance but does partially mediate the relationship between opportunities and export performance. This underscores the critical importance of translating external opportunities into actionable strategic capabilities, rather than concentrating solely on overcoming challenges, as a pathway to enhancing SMEs’ export performance. 5.3. Test for moderation effect Further analysis is conducted to examine the moderating role of FDI in the relationship between strategy and export performance. A multi-group Structural Equation Modeling (SEM) analysis, using the bootstrap-based Multi-Group Analysis technique, is conducted to test whether the structural path coefficients differed significantly between FDI-participating and non-participating SMEs. As shown in Table 5, the relationship between strategy and financial export performance is significant in both groups, with higher estimates for FDI firms (β = 0.530, p < 0.001) compared to non- FDI firms (β = 0.468, p < 0.001). However, the difference between these groups (Δβ = 0.062) is not statistically significant (p = 0.508), providing no support for Hypothesis H3a. This indicates that FDI participation does not significantly moderate the effect of strategy on financial export performance. In contrast, the relationship between strategy and strategic export performance is stronger among FDI firms (β = 0.708, p < 0.001) than among non-FDI firms (β = 0.543, p < 0.001). The difference between the groups (Δβ = 0.165) is statistically significant (p = 0.013), thereby supporting Hypothesis H3b. This finding confirms that FDI positively moderates the relationship between strategy and strategic export performance. Therefore, these results suggest that FDI does not significantly affect SMEs’ short-term financial outcomes but plays a critical role in enhancing long-term strategic performance, particularly in strengthening competitive positioning and international market presence. Table 5. Comparison of Moderating: FDI vs Non-FDI. Hypothesis Path FDI Non FDI Δβ p value Moderation H3a Financial performance ← Strategy 0.530*** 0.468*** 0.062 0.508 Not Supported H3b Strategic performance ← Strategy 0.708*** 0.543*** 0.165 0.013 Supported Note: *** p < 0.001, ** p < 0.01, * p < 0.05. 856 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 9, No. 9: 846-861, 2025 DOI: 10.55214/2576-8484.v9i9.9999 © 2025 by the authors; licensee Learning Gate 6. Discussion and Conclusion This study employed the SCOPE framework to empirically examine how SMEs’ perceptions of opportunities and challenges influence strategic decision-making and, in turn, export performance. Grounded in Paul [21] framework—recently reaffirmed in the literature as a contemporary theoretical lens for SME internationalization [37] the study operationalized the “Strategy” component through the 4S principles: Strategize, Standardize, Synergize, and Set-in-Order. The findings demonstrate that SMEs’ perceptions of opportunities—rather than challenges—are the primary drivers of strategy adoption and export performance. The direct effects analysis showed that challenges did not significantly influence strategy formulation, whereas opportunities had a strong, positive effect. Unlike prior studies that emphasize both opportunities and challenges in SME internationalization [6, 7] our findings reveal that opportunities, not challenges, are the primary catalysts for strategy adoption and export performance among Korean SMEs. These results reflect Korea’s unique economic context, characterized by government-led export promotion, deep integration into global value chains, and particularly in technology-driven sectors like electronics and IT [20, 62]. These results also align with research on born-global firms and international entrepreneurship, which underscores opportunity-driven strategies as drivers of proactive innovation and rapid market expansion [63-65]. Conversely, challenges such as geopolitical uncertainty or resource constraints could have relatively limited impact on strategic adaptation, as institutional support and firm-level resilience often mitigate them. The mediation analysis further revealed that opportunities indirectly affect both financial and strategic export performance through strategy, indicating partial mediation. In contrast, the indirect effects of challenges are insignificant. These findings provide empirical support for Paul [21] assertion that opportunity-driven motivations are more likely than challenges to activate strategic processes. The empirical results confirm that strategies grounded in the 4S principles—such as synergizing internal and external resources, standardizing processes, and setting organizational priorities—function as integrative pathways that align environmental signals with sustainable competitive outcomes. The moderation analysis shows that FDI strengthens the relationship between strategy and strategic export performance, although its effect on financial export performance is not significant in the multi-group SEM analysis. While both FDI and non-FDI firms benefited from strategic adoption, only strategic export performance displayed a significant difference. The findings reveal FDI’s role as a catalyst for long-term competitiveness rather than short-term financial gains. This distinction refines prior research by demonstrating that FDI enhances non-financial outcomes, such as market positioning and innovation capacity, particularly for Korean SMEs integrated into global value chains [66, 67]. 6.1. Theoretical Contributions The findings advance SME internationalization research in the following three aspects. This study advances SME internationalization research by operationalizing the SCOPE framework [21] through the 4S principles—Strategize, Synergize, Standardize, and Set-in-Order—to link environmental perceptions to export outcomes. By empirically validating this asymmetry in the Korean context, this study strengthens the SCOPE framework’s explanatory power and establishes opportunity recognition as a pivotal mechanism for SME competitiveness in the global markets. Second, this study enriches the theoretical understanding of how strategy adoption mediates the relationship between external environmental factors and SME export performance. While prior research has explored strategic orientations—such as market orientation, entrepreneurial orientation, and innovation capabilities—as mediators of firm performance [50, 51] this study advances the discourse by operationalizing the concept of strategy using the 4S framework [21]. This contribution advances the literature on SME competitiveness by providing a robust, empirically validated account of how SMEs convert external opportunities into sustained advantages in global markets. Third, this study advances international business theory by elucidating the role of FDI in amplifying SME internationalization outcomes. While Dunning [56] eclectic paradigm emphasizes 857 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 9, No. 9: 846-861, 2025 DOI: 10.55214/2576-8484.v9i9.9999 © 2025 by the authors; licensee Learning Gate resource-, market-, and efficiency-seeking FDI motives, recent studies highlight FDI’s role in fostering global ecosystem integration [42, 55, 68]. By conceptualizing FDI as a strategic enabler within the SCOPE framework, this study advances SME internationalization research—which has traditionally been trade-oriented—by highlighting opportunities as the primary drivers, strategies as the mediating mechanisms, and FDI as a pivotal enhancer of sustainable global competitiveness. 6.2. Managerial and Policy Implications Beyond theoretical contributions, the findings offer practical guidance for managers and policymakers aiming to foster sustainable SME growth in an era marked by prolonged U.S.–China trade tensions, tariff volatility, and ongoing supply chain reconfiguration. From a managerial standpoint, the results underscore the importance of prioritizing market opportunities rather than concentrating solely on mitigating challenges. For example, Korean machinery SMEs entering South Asian markets faced considerable uncertainty due to shifting trade policies, institutional voids, and spillover effects from U.S.–China decoupling. By systematically applying the 4S framework—standardizing procedures, synergizing resources with local partners, and strategizing through joint ventures—these firms were able to mitigate risks while simultaneously opening new avenues for growth. Importantly, FDI emerged as more than a short-term financial lever; establishing subsidiaries abroad was not simply about reducing production costs but also about cultivating local networks, accessing skilled talent, and positioning for long-term regional expansion. These cases illustrate how opportunity-driven strategies, reinforced by FDI, can convert external turbulence into enduring competitiveness. At the policy level, the findings highlight the need for government support to move beyond conventional financial assistance and toward capability-enhancing initiatives. Key areas include investments in digital infrastructure, export readiness training, and facilitation of international partnerships, all of which help SMEs capture emerging opportunities in volatile environments. Such measures complement the structured application of the 4S framework, enabling firms to balance internal efficiency with external adaptability. By aligning policy design with opportunity-driven strategic approaches, governments can play a pivotal role in strengthening SMEs’ resilience and sustaining their international competitiveness. 6.3. Limitations and Future Research Despite its contributions, this study is subject to several limitations. First, the use of cross-sectional survey data constrains causal inference and prevents analysis of dynamic changes over time. Future research would benefit from longitudinal designs that capture the evolving interplay between opportunities, strategies, and performance outcomes. Second, industry-specific effects were not fully explored; subsequent studies should incorporate sectoral perspectives to refine the applicability of strategic frameworks. Third, this study conceptualized FDI primarily as a moderating variable. Future research could adopt a more nuanced approach by treating FDI as an independent strategic choice, examining motivations (market-, efficiency-, resource-, and strategic asset-seeking) and their distinct performance implications. Finally, additional theoretical extensions could integrate network theory, niche marketing strategies, and the role of disruptive technologies to capture the dynamics of born global and digital-first SMEs. Funding: This study is supported by research funding from aSSIST University, South Korea. Institutional Review Board Statement: Research was conducted in compliance with National Health and Medical Research Council’s ethical standards for research involving human participants. 858 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 9, No. 9: 846-861, 2025 DOI: 10.55214/2576-8484.v9i9.9999 © 2025 by the authors; licensee Learning Gate Transparency: The authors confirm that the manuscript is an honest, accurate, and transparent account of the study; that no vital features of the study have been omitted; and that any discrepancies from the study as planned have been explained. This study followed all ethical practices during writing. Copyright: © 2025 by the authors. This open-access article is distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/). References [1] M. 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