David Versus Goliath: Strategic Behavior of Small Firms In Consolidated Industries

Authors

  • Monica Zimmerman Temple University
  • Denise Dunlap Temple University
  • Robert D. Hamilton, III Temple University
  • T. L. Hill Temple University
  • Elisabeth A. Chapman Temple University

Abstract

This study assesses the effect of strategy selection and firm adaptability on small firm performance,  using firm  tenure  as a moderator  variable.  The study  is based  upon interviews with sixteen small firms operating in rapidly changing and consolidating industries. All of the firms in the study pursued a differentiation strategy. Half of the firms  pursued  a  broad product strategy and more than three-quarters pursued a broad service strategy. The study found that small firms adapt by addressing community needs and forming cooperative agreements with other small firms but not larger firms. Variation among the industries studied suggests that the intensity of industry concentration affects firm adaptation decisions. For instance, while the heavily concentrated hardware anti drugstore industries  showed limited adaptation, the unconsolidated bookstore industry showed greater commitment to adaptive strategies. In addition, firm tenure was found to affect the adaptation of the small firms  studied.

References

Chaganti, R., Chaganti, R., & Mahajan, V. (1989). Profitable small business strategies under different types of competition. Entrepreneurship Theory and Practice, 13( 3), 21-35.

Chell, E., & Haworth, J. ( 1992). The competitive performance of SMEs in the UK clothing industry. International Small Business Journal, 10( 3), I 1- 24.

Daft, R. L. (2000). Management. (5th ed.). Fort Worth, TX: The Dryden Press.

Davis, G., & Thompson, T. (1994). A social movement perspective on corporate control. Administrative Science Quarterly, 39( I ), 141-173.

Dess, G.G., & Robinson, R.M. (1984). Measuring organizational performance in the absence of objective measures: The case of the privately-held firm and conglomerate business unit. Strategic Management Journal, 5(3), 265-274.

Ehrenfeld, T. ( 1995). The demise of Mom and Pop?. Inc., 17(1), 46-48.

Federal Register. (2000, May 15). Small Business Size Regulations; Size Standards and The North American Industry Classification System. 65(94), 30836-39863.

Fenn, D. (1997). Sleeping with the enemy. Inc.. 19(16 ), 78-88.

Granovetter, M. ( 1985). Economic action and social structure: The problem of 'embeddness.' American Journal of Sociology, 91( 3), 481-510.

Halverson, R. 1996. O'Reilly's family strategy counters auto megachains. Discount Store News, 35(21), 23-24.

Hirschman, A.O. (1958). The strategy of economic developmelll. New Haven: Yale University Press.

Hodgetts, R., & Kuratko, D. (1995). Effective small business management. Fort Worth, TX: The Dryden Press.

Kean, R., Gaskill, L., Leistritz, L., & Jasperet, C. ( 1998). Effects of community characteristics, business environment, and competitive strategies on rural retail business performance. Journal a/ Small Business Management, 36(2), 45-57.

Kean, R., Niemeyer, S., & Miller, M. (1996). Competitive strategies in the craft product retailing industry. Journal a/ Small Business Manageme111, 34( 1 ), 13-23.

Kleindl, B. (2000). Competitive dynamics and new business models for SMEs in the virtual marketplace. Journal of Developmental Entrepreneurship, 5( I), 73-85.

Kuratko, D., & Hodgetts, R. (1998). Entrepreneurship: A contemporary approach. (4th ed.). Fort Worth, TX: The Dryden Press.

Lieber, R., (1997, March 31). Beating the odds. Fortune, 135(6), 82-90.

Litz. R. A., (2000). Where Everybody Knows Your Name: Extraorganizational Clan­ Bu ilding as Sma ll Firm Strategy for Home-Field Advantage. Journal of Small Business Strategy, //(I), l -13.

Litz, R. A .. & Stewart, A. C. (2000). The Late Show: The Effects of After-Hours Accessibility on the Performance of Small Retailers. Journal of Small Business Management, 38( 1 ), 1-26.

Longenecker, J., & Moore. C. ( 1987). Small-Business management. (7th ed.). Cincinnati, OH: South-Western Publishing Co.

Lowes Companies, Inc. (2000). lolve 's Reports 5 / % Increase in Fourth Quarter Net Earnings, 2000. Retrieved August 8, 2000, from http://www.shareholder.com/lowes/ News/20000218-1 4228. htm

Macht, J., ( 1 999). Competing Interests. I nc., 21 (6), 73-75.McCune, J., ·(1994). In the shadow of Wa l-Mart. Management Review, 83( 12), I0-1 7.

Maggina, A., ( 1992). SM Es in Greece: Toward 1992 and beyond. Journal of Small Business Management. 30( 3), 87-90.

Marshall, C., & Rossman, G. B., (1995). Designing quality research. (2nd ed.). Thousand Oaks, CA: SAGE Publications, Inc.

Maurer, R., ( I 998). David vs. Goliath. Folio. 27(9), 1 16.

Milliot, J., ( 1999, January 4). Indies file more lawsuits against chains. Publishers Weekly. 246 (1), 1 8.

Milliot, J., (2002). Industry Sales Flat in 2001 at $25.4 Billion. Retrieved March 4, 2002 and on August 22, 2002, from http://publishersweekly.reviewsnews.com/index.asp?layout=articleArchive&articleid= CA!99355&display=searchResults&stt=OO I

Porter, M., (!980a). Competitive strategy: Techniques for analyzing industries and competitors. New York: Free Press.

Porter, M., (1980b). Generic strategies as determinants of strategic group membership and organizational performance. Academy of Management Journal. 27(3), 467-488.

Porter, M., ( 1985). Cotnpetirive advantage: Creating and sustaining superior perfornzance. New York: Free Press.

Porter, M., (1996). What is strategy? Harvard Business Review, 74(6), 61-78.

Small Business Administration (2002, May 29). SBA Office of Advocacy Small Business Frequently Asked Questions. Retrieved August I 7, 2002, from http://www.sba.gov/advo/stats/sbfaq.html#q2.

StockSelector.com (2000). Home Depot. Retrieved August 8, 2000, from http://www.stockselector.com/industrycomp.asp.

United States Securities and Exchange Commission. (2001). 10-K, Amazon Com Inc. Retrieved March I 8, 2002, from http://www.sec.gov/ Archives/edgar/data/I 018724/ 000 I 03221001500087/000 I 0322 I 0-01-500087.txt

United States Securities and Exchange Commission. (200 I ). I 0-K, Barnes and Noble Inc. Retrieved August 8, 2000, from http://www.sec.gov/Archives/edgar/data/890491/ 0000950 I 2301501 788/00009501 23-01-501788.txt

United States Securities and Exchange Commission. (200 I ). I 0-K. Book A Million Inc. Retrieved March 18, 2002, from http://www.sec.gov/ Archives/edgar/data/891919/ 0000950144-00-005642-index.htrnl.

United States Securities and Exchange Commission. (2001). 10-K. Borders Group Inc.

Retrieved March 18, 2002, from http://www.sec.gov/ A rchives/edgar/data/9405 IO/ 0000950124-00-002431-index.htrnl.

Walgreen's. (2000). Walgreen 's Rankings and Ratings. Retrieved August 8, 2000, from http://www. wa !greens.com/.

Welsh, J.A., & White, J. E. (1981 ). A small business is not a little big business. Harvard Business Review, 59(4), 18-32.

Yin, R. K. (1994). Case study research (2nd ed). Thousand Oaks, CA: Sage Publications.

Downloads

Published

2002-06-23

Issue

Vol. 13 No. 2 (2002)

Section

Articles

License

The Journal of Small Business Strategy (the “Publisher”) and the Author(s) agree as follows:
 
1.Author(s) hereby grant to Publisher all right, title, and interest in and to the Work, including copyright to all means of expression by any method now known or hereafter developed, including electronic format. If Publisher does not publish the Work within two (2) years of the Effective Date, copyright shall revert back to the Author. Publisher agrees to always credit Author(s) as the author(s) of the Work.
 
2.Publisher hereby grants Author a royalty-free, limited license for the following purposes, provided the Work is always identified as having first been published by Publisher.
    •The right to make and distribute copies of all or part of the Work for use in teaching;
    •The right to use all or part of the material contained in the Work in a book by the Author(s), or in a collection of the Author(s)’s work;
    •The right to use and distribute the Work internally at the Author(s)’s place of employment, and for promotion and any other non-commercial purposes;
    •The right to use figures and tables from the Work for any purpose;
    •The right to make presentations of material from the Work;
    •The right to use and distribute the Work on the Author(s)’s Web site and on the Author(s)’s university’s institute repository;
Such license shall be effective when the Work is first published in the Journal of Small Business Strategy.
 
3.The Author(s) represents and warrants that the Work: (a) is the Author(s)’s original work and that Author(s) has full power to enter into this agreement; (b) does not infringe the copyright or property right of another; (c) contains no materials which is obscene, libelous, defamatory or violates another’s civil right, right of privacy, or is otherwise unlawful; and (d) has not been previously published, in whole or in part. Author(s) shall indemnify and hold Publisher harmless against loss or expenses arising from breach of any such warranties.

How to Cite

David Versus Goliath: Strategic Behavior of Small Firms In Consolidated Industries. (2002). Journal of Small Business Strategy (archive Only), 13(2), 56-74. https://libjournals.mtsu.edu/index.php/jsbs/article/view/507