Journal of Management and Marketing Research

How small businesses master the art of competition through superior competitive advantage
Martin S. Bressler Southeastern Oklahoma State University ABSTRACT
Identifying and developing sustainable competitive advantage could be considered one of the most critical activities for a ne business venture. !he process can often be challenging to the typical small business o ner" as the process can often be both difficult and time consuming. #eveloping competitive advantage can be especially demanding for small and ne emerging businesses operating in industries here many other businesses already compete. Unfortunately" some ne entrepreneurs lack an understanding of the process and$or fail to recogni%e the importance of developing sustain able competitive advantage for their business venture. In some instances" ne business ventures neglect securing a market posit ion here the business could have reasonable chance for success. In some cases" a business ill struggle to compete ith bigger competitors hile focusing on price" hile other businesses believe that the key to business success is to open their business and customers ill rush to purchase their products and services. In this pa per" the author e&amines significant research findings on small business strategy and offers a model approach that could enable business o ners to better utili%e business resources and strengths to increase their likelihood of success.

'ey ords( small business" strategy" competitive advantage

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Journal of Management and Marketing Research

INTRO !CTION #eveloping competitive advantage can be considered a critical success factor for a small or ne " emerging business venture. ,or a competitive advantage to be successful" entrepreneurs need to develop a competitive advantage that can be sustainable over a period of time. By and large" entrepreneurs should not e&pect the business community to elcome the ne business ith open arms- instead" savvy competitors ill likely defend against the ne business venture to prevent their stealing market share from them. !his can often be observed in situations here market gro th stalls" and prevents ne market entrants from entering and gaining market share ithout opposition. !he market entry stage could be the first critical stage for developing effective competitive advantage and continues to be important all the ay through the business life cycle. Successful market penetration re.uires that ne entrants develop a sound strategy that can serve as an entry edge" allo ing the ne business venture to successfully penetrate the market and in enough market share to ensure that the business

ill be earn a profit and become successful. Strategy grounded on generating a sustainable competitive advantage might provide a ne business ith that entry edge" therefore helping to establish the ne business in the marketplace.

/ike the actor James 0arl Jones character in the movie 1,ield of #reams2" some entrepreneurs seem to have developed an 1If e build it" they ill come2 minds et. Merely putting a sign out in front of your business and opening the doors to the public does not guarantee business success. Rarely" can small business o ners effectively compete ith larger businesses on price. Instead" entrepreneurs should consider other competitive approaches. Opening a restaurant can be a typical entrepreneurial venture" but hen asking the ne restaurant o ner ho his business ill compete" the o ner responds 1 e ill offer good food at good prices2.

3ccording to 4iner 567789" developing competitive advantage centers on three key components. 4iner 567789 states first that competitive

advantage must be able to generate customer value. :ustomer value can be defined by the customer in terms of lo er price" speedy delivery" convenience" or some other characteristic. Second" the enhanced value of the product or service must be perceived by the customer. Regardless hether your product could be considered superior to competitor;s product s might not be as important as hether your customer perceives your product to actually be superior. Intel :orporation recogni%ed this some years ago and began an aggressive marketing campaign utili%ing the phrase 1Intel inside2 printed on labels and placed on the outside of IBM and other computer companies. ,inally" effective competitive advantage re.uires that hatever business tactic used should be difficult for business competitors to copy.

Basic strategy principles state that business tactics more difficult to copy provide more sustainable competitive advantage. ,or e&ample" 3merican 3irlines offered customers a ,re.uent ,lyer program before any other airline" ho ever" that could not be protected by intellectual property. <ot long after ards" virtually every other airline offered a similar fre.uent flyer program. <e " emerging airlines developed their competitive advantage

using business creativity. South est 3irlines managed to find creative ays to control costs by using secondary airports 5such as <e ark" rather than <e =ork :ity9 and uses only >?> aircraft hile providing South est customers an affordable" yet .uality flying e&perience.

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Journal of Management and Marketing Research :ertainly" effective strategy should be based on more than the marketing mi& variables of product" price" place" and promotion. Bo& and Miller 567++9" found a ma@ority of small businesses selected differentiation as a basis for their competitive strategy. /ike ise" sound decisionAmaking cannot be emphasi%ed enough. !his paper focuses on the central role of the marketing mi& variables and offers that effective use of personnel can act as the linchpin" effectively forging together the elements of product" price" place" and promotion. In ,igure +" the author provides a model sho ing the connection bet een industry and business conditions" management actions" and leveraging the marketing mi& variables to achieve competitive advantage. 3chieving superior competitive advantage can often result in customer satisfaction and effective longAterm customer relationship management. ISC!SSION 3lthough the literature offers many e&amples of competitive advantage e&amples" most appear to be based on larger companies. Sometimes" small businesses may be able to employ the same strategies big businesses us e. Still" e&amples can be found here smaller businesses effectively develop a competitive advantage.

0ffective application of the various marketing mi& elements can help the business develop competitive advantage. Mc:arthy 5+BC79 proposed the marketing mi& to be product" price" place" and promotion. !he author proposes that a critical fifth element" people" serves to connect the other elements of product" price" place" and promotion.

"ricing

!he *rice component can be controlled by the entrepreneur. 3lthough there could be a number of value propositionssmall businesses could find the greatest likelihood for business success by competing ith high price" offering customers better value. ,or e&ample" offering customers 1more value2 could be provided ith increased levels of customer service" superior product kno ledge" or developing key locations 5including going to the customer9.

!immons" 567789 suggests that a common mistake hen marketing high valueAadded products and services typically centers on underpricingAAA in some cases by up to 67 percent 5p.BB9. 3s an alternative" an effective marketAentry strategy for a ne business venture might be pricing at the high end" especially hen the customer perceives the product or service to provide greater customer value. !hat is" value as ho the customer defines value. In some instances" a business o ner might presume that their customers ill al ays purchase on the basis of lo er price. :ontrary to that belief ho ever" e&perience often sho s that customers ill often pay significantly higher prices for better service" better .uality" preferred brand or image" and customer convenience. "roduct#service offerings
Small businesses can also leverage the marketing mi& ith product offerings unavailable through competitors. !his can be accomplished by offering a broader selection of products" specialty brands or even closeout products at substantial savings" combining both product and price elements of the marketing mi&. Small businesses could also develop a focused

merchandising tactic" centered on narro product categories e&cept ith an e&pansive range of

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Journal of Management and Marketing Research goods. ,or instance" 4alA Mart may only offer several types of golf clubs at their typical lo prices" ho ever an opportunity also e&ists for a specialty golf store to provide a variety of brands and models varying in price" as ell as an e&tensive selection of golfing accessories. Small businesses could also employ a product differentiation strategy. 0&amples of this type of strategy can be found ith Dolvo automobiles" *erdue chicken" and Bose electronics e.uipment. 3 strategy of product differentiation can be achieved by product appearance. *erdue chicken accomplishes this ith chicken ith that golden yello color that customers perceive to be fresher and better tasting. Dolvos; differentiation strategy e&ploits Dolvo safety features" vehicle performance" and style. Dolvo effectively combines several automobile characteristics to generate a uni.ue combination of benefits to provide to the customer. Bose :orp oration can price their speakers higher than their competitors due to their reputation for e&ceptional sound .uality. Small businesses can also achieve product differentiation may by providing service offerings that other" larger business may not offer or provide effectively. !hese services could include

product delivery and installation" repair or arranty ork" and even customer training. 3t the same time hen some larger companies begin to scale back these types of services or begin to charge higher prices for them" smaller businesses could develop competitive advantage by means of offering these services. 3n e&ample of this can be found hen looking back to the +B>7;s hen 3mericans ent back to riding bicycles again- not only for e&ercise" but also in response to the energy crisis. 3lthough big chain stores began offering hole product lines of bicycles for sale" small" independent bicycle shops could provide services that the big chain stores eren;t able to provide" such as assembling and servicing bicycles.

"lace

Many businesses effectively leverage the place component of the marketing mi& through effective use of location variables. 3n e&ample of this can be found in :lub Med" hich chooses e&otic locations to market to customers hen selecting a

place to spend their vacation geta ay.to vacation In addition" :lub Med also offers one of a kind sailing ship that sails the :aribbean hile providing :lub Med members distinctive feature ater sports

Many years ago" ice cream manufacturers recogni%ed an additional ay to sell ice cream ould be to go directly to the customer 5usually kids ho could not drive to the store" any ay9 by delivering ice cream to the customer in hether in a neighborhood" at the baseball park" or at the beach. Similarly" 3ma%on practices channel differentiation by selling solely on the Internet and circumvents building retail stores around the country" or around the orld. In a similar move" #omino;s *i%%a outflanked their ma@or competitor *i%%a )ut by only building simple storefront facilities offering customers their choice of home delivery or customer pickup as opposed to a traditional restaurant hich ould re.uire significantly higher building cost. :aterpillar 0.uipment" /e&us and Saturn automobiles use e&ceptional dealer net orks to differentiate their product lines from the competition. Small business o ners can also leverage the place

component by means of superior distribution. In the foodservice industry" ith the e&ception of several large firms such as S=S:O and U.S. ,oodservice" smaller firms dominate the industry. *erkins 5cited in Bressler" 677E9 reports there to be appro&imately ?"E77 foodservice companies and C"777 arehouses" resulting in a fierce competitive marketplace. *erkins 567789 argues that smaller firms can effectively compete against large r firms in one of three ays. Small foodservice firms can begin

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Journal of Management and Marketing Research orking to develop longA term relationships ith their customers" start providing e&ceptional service" and start creating and e&ploiting economies of scale. Usually" businesses accomplish these key activities through @oining alliances" for e&ample" the *rogressive ,ood 3lliance or Uni*ro ,oodservice. Nations Restaurant News 5*erkins" 67789 reports that member groups such as these offer member benefits that other ise" they might not be able to afford. !ypically" these benefits might include making available sales training facilities" offering marketing services" providing net orking opportunities" and developing stronger procurement systems. Small businesses can reali%e competitive advantage through leveraging technology" resulting in cost savings for the business. Sanitation companies typically make capital investments through ne truck purchases" but Rumpke :onsolidated 50ckhouse" +BBF9 instead invested in a ne management technology system. !his system provides greater efficiency for their fleet of trucks. 0ven though larger firms generally have more funds to invest in business information technology" ne business ventures no are funding information technology at F.BG of sales. ,ortune E77 companies on

average" only fund information technology a t >.+G of sales. Starbucks; core product" coffee" can be considered a commodity. But Starbucks took that product and focused on superior .uality and service" blended ith comfortable rela&ed surroundings and a trendy" casual atmosphere.

"romotion

Small businesses can also differentiate their business venture from other" larger businesses through their various promotional programs. !his could be accomplished either by offering more promotional programs" or promotions more visible to potential customers. Many sales promotions go unnoticed to the public either through poor timing" poor pro motion choices" or not linking the promotion to other marketing activities. Small businesses that understand promotions as part of an integrated marketing campaign recogni%e the importance of this.

Integrated marketing link s public relations" advertising"

direct marketing " and other marketing activities in a coordinated fashion. /ocated in the !oronto area" a small manufacturing company named Inscape produces orkstation office furniture. 3ccording to Dinas" 567789 Inscape secured a contract ith Best Buy orth +> million dollars. Inscape secured the contract ith Best Buy after a concentrated effort by senior management. 3lthough product .uality as not an issue" management at Inscape needed to persuade Best Buy of their ability to deliver on an order of that magnitude.

Smart small business o ners seek opportunities to partner ith other businesses and events. Businesses can coordinate their business promotions ith local events hich might include a :hristmas or other holiday event" the state or county fair" the rodeo" a film festival" or other event. Restaurants that typically compete ith one another might even @oin together to create a 1!aste of the !o n2 dining event" chili cookAoff" barbe.ue" or pastry tasting. Starbucks" Mc#onald;s" and Rit% :arlton ork to develop a distinctive i mage customers ill connect ith that particular business. !he image could be either formal or informal" based on product .uality" atmosphere"

lifestyle" or some other characteristic. 3n e&ample of this ould be Starbucks" hich developed a superb reputation centered on lifestyle.

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Journal of Management and Marketing Research "eople 3lthough the significance of employees 5people9 can be found in the literature" most employees as secondary to the role of product" place" price" and promotion. !he author argues that the role of your employees 5people9 serves as the linchpin for all your other marketing elements. 0mployees not only produce the products and deliver services" but also often serve as 1the representative2 of your business. 0mployees orking as salespeople" technicians" delivery personnel" cashiers" and customer service representatives usually come into contact ith customers and prospective customers more than any other employee in the comp any. 3s these employees come into contact ith customers more often" they can have the greatest impact on customer satisfaction. =our employees play a critical role in the development of" and implementation of your business strategy. !hose businesses that can provide superior service through their employees could gain a competitive advantage. *eters 5+BFE9" #rucker 5 9" and other authors emphasi%e the importance of employees in delivering customer value. In addition to the elements of the marketing

mi&" employees 5people9 per form a significant role in achieving competitive advantage. !oday" more companies recogni%e the value of achieving superior customer satisfaction and ho that relates to profitability and competitive advantage. Sheth 5stated in 4hitely9 found that companies on average spend five times more

to ac.uire a ne customer than t o keep e&isting customers. Other research supports this study. Bain and Sasser 5cited in 4hitely9 report that as little as a five percent increase in customer loyalty could increase profitability up to one hundred percent. In addition" Bain H Sasser found no correlation bet een 1satisfied2 customers and customer retention. )o ever" hen customers reported themselves as 1highly satisfied2" customer retention increased.

Jones and Sasser 5+BBE9 researched customer satisfaction across five different industries and discovered that hen satisfaction level increases" customer loyalty also increases. In another study 5cited in 'otler" 67789" 3! H! reported that >7 percent of selfAreported satisfied customers still

ould consider s itching to a competitor. In that same study" Iero& revealed that 1totally satisfied2 customers ould be si& times more likely to purchase Iero& products again" compared to customers ho only reported 1satisfied2. Managers need to recogni%e that employees throughout the organi%ation should be responsible for customer satisfaction" therefore" managers should leverage employees to be the cornerstone competitive advantage.

*olly;s Jourmet :offee 5 )yatt et al" 67789" a small business in /ong Be ach" :alifornia faced heavy competition from Starbuck;s as ell as other local competitors. !he o ner" Mike Sheldrake" competes ith ++ other competitors ithin B77 yards of his coffee shop. Sheldrake utili%es his employees as an essential part of his marketing strategy. !he ne strategy began ith retraining employees to greet each customer by name. 0mployees than began providing superior 5not @ust good9 service. Sheldrake no gives incentives to employees in order to motivate them to superior levels of service. In addition to inAstore promotions" this ne strategy helped Sheldrake;s business go from losing

money to increased sales and profitability. #isney employees might be kno n for possessing superior product kno ledge and providing personali%ed service. !his could be because #isney spends more time and money training employees" ith the kno ledge that the return in customer satisfaction ill be far greater than the upAfront training costs. !he author kno s a local #airy Kueen franchisee hose franchise stores consistently rank first and second in sales in their region. 3lthough the franchisee spends at least t ice a s much time training employees than other fast food chains" this

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Journal of Management and Marketing Research

successful franchise o ner focuses on highly selective hiring practices. !hose hi ring practices" coupled ith detailed formali%ed training and recogni%ing and re arding their employees could be central to his franchise success. !he franchise success can be measured by in creased sales and profitability" hile at the same time very lo employee turnover in an industry typically kno n for high employee turnover. 3nother e&ample can be found in IBM" hich came under attack from several ne competitors. IBM responded by focusing efforts on using their highly trained professional employees to provide customer solutions. In this age of poor customer service" small businesses could find 1people2 to be the key to successfully competing ith bigger companies ith greater resources. *eters and 3ustin 5+B FE9 consider employees to be critical in converting customers to 1raving fans2" ho ill then help endorse your company by sharing their e&ceptional customer e&periences ith friends and family 5p. F>9. !oday" this can be more easily accomplished through ,acebook and other forms of social media. Small businesses might also develop their

competitive advantage through a franchised o nership agreement. 3lthough not conclusive" some studies suggest that a franchise agreement might enhance small business competitiveness 5'night" cited in *illing9. Other studies 5Bracker and *earson" 5cited in *illing9 found no significant performance improvement among franchised small businesses. )o ever" the studies found failure rates among franchised businesses tend to be less than that of independent small businesses.

Sometimes small companies @oin together into buying groups in order that collectively they ill possess the buying po er of bigger firms. Buying groups such as these" can be found among groceries" hard are" appliances" and furniture stores. )ardy H Magrath 5+BF>9 found nearly half of all retail hard are sales in the U.S. to be by dealer buying groups" hich represent more than 6E"777 members. In addition" buying groups can be found among hospitals" dentists" veterinarians" and even la firm s.

$e% Issues in Competitive Advantage

:ost plays a significant r ole in competitive advantage and can often be the basis upon hich larger companies compete " and for larger companies" that often makes sense. Sometimes" a larger company ill be able to become the lo cost producer in that industry. :ost rarely functions as an advantage for smaller companies as bigger companies can negotiate lo er resource costs. <evertheless" small businesses should not overlook the possibility of lo ering costs through reduced capital e.uipment" location" or overhead. 3lthough a company might not develop an overall lo er cost structure" that company might be able to leverage specific business costs such as distribution cost" labor cost" or lo er cost of capital investment.

:ontrol might also be considered an important issue in competitive advantage. *orter" 5+BFE9 found that in fragmented markets ith market leaders o ning less than 67G market share" those businesses had less control over supplier resources than smaller markets here the market leader ith a larger share of the market. Both ne business ventures and small businesses on general should be mindful of this as these businesses ould be more likely to report smaller market shares. 0ntry and e&it

barriers can also provide competitive advantage. 0ntry barriers that hinder competitors but aid your business might include a beneficial indo of opportunity resulting in advantages in location" innovation" response$lead time" people" or resources. Smaller businesses can often possess an advantage i n this case" as many larger companies tend to slo to act and

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react" as decision making typically slo s through corporate bureaucracy. In addition" many corporate managers anting to avoid making mistakes that could possibly sabot age their o n careers means those managers in larger companies ould more likely be riskAaverse. Barriers to entry barriers might also include intellectual property rights" speciali%ed kno ledge" or licensing re.uirements and permits. 0&it barriers create difficulty for a company leaving an industry" sometimes this could be due to high cost of investment in capital e.uipment or l ease agreements. Management should play a critical role in developing competitive advantage for their business. :an management successfully motivate employees to inspire them to perform at higher levels of performanceL #id management assemble the best leadership team ith diversity of opinion and complementary strengthsL :an management find the future for the business and inspire innovation throughout the organi%ationL *orter 5+BBC9 contends that managers sometimes focus too much on financial performance" obtaining assistance from the government" or building alliances and mergers rather than e&ercising real leadership. *orter 5+BBC9 argue s that 1today;s

competitive realities demand leadership. /eaders believe in changethey energi%e their organi%ations to innovate continuously2 5p. +BE9. !he culture ithin an organi%ation signals ho receptive leadership ill be to innovation and entrepreneurship ithin the organi%ation. *orter 5+BFE9 states 1business unit managers can often create the greatest competitive advantage through entrepreneurship that identifies and e&ploits interrelationships2 5p. ? B+9. :ompanies such as ?M formed a culture of entrepreneurship throughout the organi%ation and as a result" been able to e&tend or create ne product life cycles as ell as benefit from the most profitable life cycle stages.

Successful competitive advantage also re.uires that management possess technical and industry e&pertise. 3n important .uestion ould be hether the ne business venture ould be operating in an industry ellAkno n to the management team. If the management team does not have previous e&perience in that industry" coupled ith specific kno ledge and e&pertise" there might be a lesser chance of success.

In order to be perceived favorably by customers" suppliers and others as a company ith integrity" ne business ventures need to build credibility. Some managers could find this task difficult as business credibility r elates not only to industry and technical e&pertise" but also to honesty and the ability to deliver to the customer as promised. !his typically means the ability to meet deadlines and delivery dates" provide superior product .uality" and meet or e&ceed other business terms. ,inally" intellectual honesty becomes particularly important hen one or more members of the entrepreneurial team left another company to start the ne business venture.

!aking advantage of a business opportunity begins first ith determining hether a strategic fit e&ists ith the organi%ation and its resources. 3 typical first .uestion to ask might be 1#o the goals and ob@ectives of the ne business venture fit ith the strategy necessary to be successful in the marketplaceL2 0valuating business opportunities risk also re.uires the organi%ation to consider hat risks e&ist" and the level of e&posure to the

organi%ation Usually small companies" despite fe er resources" entrepreneurs tend to be more motivated to seek out resources or create them. Because they have fe er resources" they tend to e&periment more" and possess greater incentive for action 5Mosako ski" reported in )itt"p. E9. !he business venture needs to assess hether a balance e&ists bet een risks and re ardsL Jenerally speaking" smaller companies tend to tolerate more risk" despite the fact that there is often little room for error. Many entrepreneurs recogni%e this aspect of innovation" and allo both employees and themselves room for trial and error.

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Journal of Management and Marketing Research Sei%ing a good business opportunity also often depends on timing. 3lthough some might call it luck" identifying and e&ploiting the indo of opportunity can be critical to ne product development and market introduction. ,inding that right indo of opportunity might be enhanced ith a more thorough assessment and appraisal of technology developments" demographic shifts" and societal and lifestyle changes. Smaller companies often have an advantage due to being more fle&ible" hich allo s them to be able to change direction .uickly hen necessary. Bigger companies" bogged do n ith layers of bureaucracy" could need months to make decisions and act upon t hem. !hen again" small companies might not be able to leverage their potential fle&ibility should management fail to delegate to other employees or slo do n reaction times ith administrative policies and procedures. 3chieving competitive advantage sometimes re.uires delivering customers greater value than your competitors. !he customer defines the concept of value hich in some cases might mean more .uantity for less money 5such as 1value meals29" better" or e&tra services 5such as home

delivery or installation9" or speed of delivery. Some customers might place greater value on lo er prices hile other customers might value time or convenience. 4hat the customer values most could depend on the product or the situation. In some cases" customers ill seek a combination of these factors" such as speed of delivery and lo er prices. 4hiteley 5+BBC9 suggests developing a special routine for your very best customers and refers to 4estin )otels" hich despite operating in a very competitive market" successfully found a ay to distinguish their hotel chain in 5p.+F79. 4estin;s :0O" Shackleton" researched the competition and discovered that a si%eable percent of 4estin;s business resulted from a relatively minor number of important business clients. Shackleton then acted to forge strategic partnerships ith those key accounts in order that they ould not need to negotiate every year on the basis of price" but instead negotiate on the basis of fundamental shared values.

Research provides us ith many e&amples of ho important product offering can be to small businesses. 3mong others" a study by 0bben and

Johnson 5677E9 e&amine s the role of product offerings and the link to competitive strategy. !he authors suggest that even more important than product offering" the firm must be efficient and fle&ible in the manner in hich it operates.

/ike ise" effective decisionAmaking can often determine the effectiveness of the strategy management chooses to employ. Darious models of decisionAmaking appear in the literature" including 1OO#3 /oop #ecisionA Making2" developed by John Boyd and described by Byus and Bo& 5677F9" as fastAcycle decision making. 0ntrepreneurs should determine the style and process best suited to their management style and business situation. Steps in eveloping Competitive Advantage
#eveloping competitive advantage begins ith identifying relevant competitors. In some industries" for e&ample in the fast food industry" competitors could be operating in close pro&imity to your location. =ou need to consider ho far someone might typically travel to buy lunch hen they only have an hour to travel there" eat lunch" and get back to their desk on time. On the other hand" in some other industries" the nature of your product or service

offering could be such that customers ill go out of their ay to purchase your product or service. 3n e&ample of this might be ice skate sharpening. !here might be only a fe places that sharpen ice skatestherefore customers become accustomed to going out of their ay to get their ice skates

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Journal of Management and Marketing Research sharpened. Jenerally" the more uni.ue your product or service offering" the more likely customers ill be illing to travel some distance for it. Business o ners should ne&t identify their business strengths and resources. !hese strengths might include business location" carrying specialty product merchandise" or employing betterAtrained and more kno ledgeable employees. In the case of a ne business venture" this step re.uires focusing all resources the business can assemble. 0ven though these resources might seem inade.uate hen compared to the resources of your larger competitors" competitive strategy often can be more about leveraging the resources available to you. ,inally" the ne business venture must select a market position appropriate ith the business resources and capabilities. 3ccording to *orter 5+BBC9" 1strategy can be vie ed as building defenses against the competitive forces or as finding positions in the industry here the forces are eakest2 5p. ?E9. S!&&AR' CONC(!S ION AN

,igure + demonstrates the process ith hich a business can move to ard developing competitive advantage. In

the first stage" although management cannot e&ercise control over economic conditions" management might be able to leverage timing of business activities and more importantly" develop a culture of innovation ithin the business. In the second stage" management possesses a great deal of control in developing industry kno ledge and technical e&pertise. In addition" developing a strong leadership team ould be an area that management here management can e&ercise good @udgment in selecting team members ho possess the skills and characteristics that could help accomplish organi%ational ob@ectives. Stage ? provides management ith an opportunity to demonstrate skill in leveraging the marketing mi& variables. !his model" ho ever" includes people as a fifth marketing mi& variable" hich calls for management to recogni%e the critical role employees play in organi%ational effectiveness" firm profitability" and the likelihood of achieving competitive advantage. ,inally" effective management action during the first three stages can lead to the outcomes listed i n stage four. Ideally" these outcomes ould include developing customers into 1raving fans2" highly satisfied customers" ith high reA purchase rates. Sound customer relationship management ould then

likely result in sustainable competitive advantage.

0arlier research" such as research by Jale 5cited in #ean et al9 determined that larger companies often en@oyed many advantages compared to their smaller competitor s 5p. >7B9. <evertheless" recent studies including those by )amermesh and 4oo and :ooper 5cited in #ean et al9 determined that companies ith smaller market shares did not necessarily produce poor financial performance 5p. >7B9. 3dditional studies seem to confirm that even small business ventures can in fact successfully compete ith larger firms. Implications managers for

<e small business ventures can replicate competitive practices proven successful by other small businesses. Several studies 5Barney" 677+Sushil" 6777 cited in 3mbastha H Momaya9 stress the importance of the business to demonstrate fle&ibility" agility" speed and adaptability" and that these abilities seem to be

increasingly important sources of competitiveness in the e&isting business environment. Small businesses should have an advantage in this regard" but only if the business can lever age the sources of competitiveness in an effective fashion.

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In addition" proven techni.ues in developing competitive advantage for s mall businesses include developing buying groups" forging strategic partnerships" developing intense marketing promotions" and using people effectively ithin the small business. !he competitive marketplace today" could be considered one o f 1super competition2" here competition no comes from across the globe and by means of the Internet. #eveloping superior competitive advantage might never be more important. 3ll businesses" but especially smaller businesses" need to return to the business basics of competitive principles in order to develop sustainable competitive advantage.

Implications research

for

future

Small business success can be considered critical to economic gro th. 3n onAgoing challenge to small business o ners is the need to develop sustainable advantage . 3s researchers continue to e&amine variable economic conditions under hich managers might make decisions" ne information could possibly emerge that might enable small business o ners to be more successful. Researchers could develop an e&tensive study to e&amine the impact of certain variables" for e&ample" the ability to leverage e&perience curve effects on firm ability to

achieve competitive advantage. It ould also be interesting to .uantify the impact of the role of people 5employees9 and longAterm profitability on the business venture.

R)*)R)NC)S

3mbastha" 3. H Momaya" '. 56 7789. :ompetitiveness of ,irms( Revie of !heory" ,rame orks" and Models " Singapore Management Review" 26 5+9" 8E. Bo&" !. H Miller" 4. 567++9. Sm all ,irm :ompetit ive Strategy" Academy of Stra tegic Manage ment Journal" +7 569" EEAEB.

Byus" '. H Bo&" !. 5677F9. OO##3 /oop #ecision Making( 3n 3daptive Small Business ,irm Strategy #evelopment for !urbulent !imes. *roceedings of the 3ssociati on for Small Business H 0ntrepreneurship th ?8 :onference" 3lbu.uer.ue"

<.M.

#ean et al 5+BBF9. #ifferences in /arge and Small ,irm Responses to 0nvironm ental :onte&t( Strategic Implications fro m a :omparative 3nalysis of Business ,ormations" Strategic Management Journal" 19 5F9" >7BA>6F. 0bben" J. H Johnson" 3. 5677E9. 0fficiency" ,le&ibility" or BothL 0vidence /ink ing Strategy to *erformance in Small ,ir ms. Strategic Management Journal 26( +68BA +6EB. 0ckhouse" J. 5+BBF9. !echnolog y Jives 0dge to Smaller Businesses " !nformatio n"ee#" <ovember ?7" +BBF>++ " 6A ESR. )ardy" '. H Magrath" 3. 5+BF>9. Buying Jroups( :lout for Small Business" $a rvard %usiness Review" SeptemberAOcto ber" +CA6+. Mc:arthy" 0.J." 5+BC79. Retrieved from http($$en. ikipedia.org$ iki$ MarketingMmi& 0.J. )itt et al" 567769. Strategic &ntre preneurs'ip (reating a New Mindset. Malden" M3( Black ell

*ublishing. )yatt et al. 567789. Beat the Bea st" )ortune Small %usiness" +8 5>9" 86A8F. 'otler" *. H 3rmstrong" J." *rin ciples of Mar#eting" 567789" Upper Saddle Rive r" <J( *rentice )all" *ublishing. *erkins" :. 567789. Independen t #istributors Join ,orces in Marketing Jroups" ations Restaurant News +, 56+99" ?8.

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Journal of Management and Ma rketing Research

*eters" !. H 3ustin" <. 5+BFE9. A *assion for &-cellence. <e =ork" <=( Rand om )ouse. *illing" B. 5+BB+9. 3ssessing :o mpetitive 3dvantage in Small Business( 3n 3p plication to ,ranchising" Journal of Small %usiness Management 29" 8. *orter " M. 5+BFE9. (ompetitive Advantage (reating and Sustaining Superior * erformance" <e =ork" <=( !he ,ree *ress. *orter" M. 5+BBC9. On :ompetiti on" :ambridge" M3( $arvard %usiness Review *ress. Sasser" !. H Jones" 4. 5+BBE9. 4 hy Satisfied :ustomers #efect" $arvard %usiness Review" <ovemberA #ecember" B+ . !immons" J. H Spinelli" S. 56778 9. New .enture (reation &ntrepreneu rs'ip for t'e 21st (entury" <e =ork" <=( Ir in$McJr a A)ill *ublishers. Dinas" !. 567789. Bagging the Bi g One" !ndustry "ee# 2/+ 589" E8AE>. 4hitely" R. H )essan" #. 5+BBC9 . (ustomer (entered 0rowt' )ive *roven Strategies for %uilding (ompetitive Ad vantage" Reading" M3( 3ddison

4esley *ublis hing :ompany. 4iner" R.S. 567789. Mar#eting M anagement" Upper Saddle River" <J( *rentice )all *ublishing :ompany.

*igure +,Competitive Advantage Strategic &anagement "rocess

Industr%#Business Conditions N0ntry$e&it barriers N!iming NMarket share N:ulture of Innovation NIntensity of competition NJeneral economic conditions

&anagement Action N!he !eam N,le&ibility NOpportunity identification

N#ecisionAMaking NRisk taking

N!echnical e&pertis NIndustry 'no ledge N0ntrepreneurial ability

NIntegrity N0&perience curve leveraging

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