Knowledge management plays essential role for the success of organizations. Strategy formulation is one of the modern environmental requirements in the field of knowledge management and it helps and supports different parts of the organization to identify opportunities. The primary objective of this research is to evaluate the relationship between strategic knowledge management and value creation as well as opportunities abduction. Statistical population of our study is small and medium businesses in Shams Abad, Tehran. The survey is accomplished in three industries including textiles, drinking and edible. The study investigates different hypotheses on knowledge management and the results indicate that the strategies of business and saving knowledge did not have any direct effect on opportunity abduction.