The Competitive Behaviors of Small Retailers: Examining the Strategies of Local Merchants in Rural America
Mass merchandisers, discount chain stores, category killers, and e-commerce are changing the retail industry through innovations in marketing and service. Driven by increased competition and discriminating customers, small, local retailers are searching for ways to gain and sustain competitive advantage. This study examines the competitive behaviors and performances of 236 retailers located in rural Nebraska. The findings indicate that retailers which adopted competitive behaviors with a goal of low cost/low price leadership were most successful. However, retailers using a combination or value-oriented strategy were also successful. Retailers which adopted competitive behaviors that constitute solely a differentiation strategy and those which had no clearly defined strategy were the worst performers. These findings suggest that in order to achieve competitive advantage, rural retailers should follow a value-oriented strategy, being effective at both cost reduction and competitive pricing while offering unique products and services.
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