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Article

Helen Salavou and Dimitris Manolopoulos

The purpose of this paper is to shift the idea of competitive strategy from the for-profit to the non-profit context and to explain how social enterprises (SEs) get…

Abstract

Purpose

The purpose of this paper is to shift the idea of competitive strategy from the for-profit to the non-profit context and to explain how social enterprises (SEs) get advantages over competitors within and outside the social sector.

Design/methodology/approach

Based upon a sample of 63 SEs located in Greece, the exploratory research employs factor analysis to answer which strategic options they have to compete. Subsequent analysis of variance and correlation analysis were performed to answer if competitive strategic options relate to impact SEs generate.

Findings

The empirical findings identify and empirically validate a variety of strategic options based on four pure (low cost, low cost sustainability, low cost focus and differentiation focus) and one hybrid (efficient differentiation) types of competitive advantage. Additional evidence shows that hybrid compared to pure strategic options link more influentially to impact in terms of positive environmental, social and economic contributions.

Research limitations/implications

Apart from providing some explanations of how mission-driven businesses compete, it helps widening the debate of pure vs hybrid strategies beyond the commercial sector. Contrary to what the authors already know, the evidence presented here shows that strategic purity and hybridization co-exist in the social sector.

Originality/value

This is the first study with empirical evidence on competitive strategies from businesses in the third sector emphasizing how SEs ensure competitive advantage along with impact potential. Consequently, the authors respond to recent calls for more survey-based, quantitative evidence in the social entrepreneurship field.

Details

EuroMed Journal of Business, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1450-2194

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Article

Helen Salavou and George Avlonitis

The aim of this paper is to classify firms according to dimensions of product innovativeness (PI) and identify differences in performance on the product and the firm basis…

Abstract

Purpose

The aim of this paper is to classify firms according to dimensions of product innovativeness (PI) and identify differences in performance on the product and the firm basis in the context of SMEs.

Design/methodology/approach

To answer the questions this empirical study raises, a sample of 128 SMEs is clustered on the basis of the PI construct. After validating the clusters, an analysis of variance is performed to detect differences, if any, across performance measures on PI profiles of SMEs.

Findings

This paper provides evidence in support of three groups featuring different levels of PI, namely the straight imitators (low PI), the product innovators (high PI) and the concept innovators (medium PI). Further, it shows that these groups demonstrate differences in their performance potential at the product but not at the firm level.

Research limitations/implications

This paper refers to an empirical study of SMEs in a European Union (EU) member state since 1981, namely Greece, which is far from restricted to the evidence provided herein. Further research is needed to confirm and extend the present results by replicating the principal features of this study with SMEs in countries within the EU, especially small ones.

Practical implications

The identification of successful PI profiles could become a major challenge to the management of SMEs. At a national context, this identification could direct efforts in designing different supportive actions for different groups of SMEs according to their PI profiles within the wider EU innovation policy initiatives.

Originality/value

The paper provides insights into supportive actions for different groups of SMEs according to their PI profiles.

Details

Management Decision, vol. 46 no. 7
Type: Research Article
ISSN: 0025-1747

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Article

Helen E. Salavou

The purpose of this paper is to investigate empirically whether a hybrid, compared with other forms of competitive advantage, contributes to better business performance.

Abstract

Purpose

The purpose of this paper is to investigate empirically whether a hybrid, compared with other forms of competitive advantage, contributes to better business performance.

Design/methodology/approach

Based on 105 food manufacturing firms in Greece, a European Union (EU) member state, this study performs a factor analysis, a cluster analysis and an analysis of variance.

Findings

This study provides evidence in favour of the hybrid as the best‐performing form of competitive advantage for Greek food firms. Specifically, the findings show pure (the cost‐based nichers: 36 firms), combined (the hybridists: 49 firms) and stuck‐in‐the‐middle (the confused strategists: 20 firms) strategic alternatives that differ in terms of performance.

Research limitations/implications

Research on Porter's dominant paradigm within Europe is surprisingly limited. Given the call for further research on competitive strategy to focus on European firms, this Greek study extends Porter's original model and represents one of the few studies to examine the relationship between hybrid strategies and performance.

Practical implications

Managers should keep in mind that hybrid strategies are usually better and never worse than pure and stuck‐in‐the‐middle alternatives. Emphasis on all dimensions of the hybrid form may be a safe and rewarding option for Greek food players to compete at home against global players.

Originality/value

This study provides new evidence on hybrid strategies within Europe, a subject that lacks sufficient foundation. Despite the contradictory results obtained elsewhere on the Porter‐based perspective since 1980, the empirical evidence within a European country, Greece, suggests a pleasant surprise.

Details

European Business Review, vol. 25 no. 3
Type: Research Article
ISSN: 0955-534X

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Article

HELEN E. SALAVOU

This article aims to describe the valuable work conducted most recently on competitive strategies. Its purpose is to elaborate on suggestions for theorizing the hybrid…

Abstract

Purpose

This article aims to describe the valuable work conducted most recently on competitive strategies. Its purpose is to elaborate on suggestions for theorizing the hybrid form of competitive advantage and stimulate the interest of scholars.

Design/methodology/approach

As this article emphasizes hybrid strategies, both electronic and manual methods have detected 15 studies focusing on competitive strategies and their relation to firm performance from 2000 until today.

Findings

This article underlines the need to deal more thoroughly with combined-emphasis competitive strategies, which have seriously enhanced Porter’s paradigm, defined in 1980 with three single-emphasis strategic choices. The era in which combining competitive strategies was synonymous with stuck-in-the-middle alternatives has been left behind, and the era in which hybrid strategies suggest the most attractive choices, at least in some circumstances, has already begun.

Originality/value

This article is one of the few stressing conceptual issues of hybrid strategies that emerged from Porter’s (1980) model. No matter how many years pass by, research on competitive strategies will continue, as it considers businesses of any age, size, sector or country. The global challenge of today is how scholars will revise theory to better capture reality. This article intensifies the need for a theoretical framework embracing the full variety of competitive strategies, namely, single-emphasis, mixed-emphasis, no-distinctive-emphasis and stuck-in-the-middle. Nonetheless, due to their complex and multidimensional nature, hybrid strategies receive particular attention.

Details

European Business Review, vol. 27 no. 1
Type: Research Article
ISSN: 0955-534X

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Article

Helen Salavou

The purpose of this study is to empirically examine different types of service firms, featuring strategy orientations and the performance of different emphases.

Abstract

Purpose

The purpose of this study is to empirically examine different types of service firms, featuring strategy orientations and the performance of different emphases.

Design/methodology/approach

To answer the questions the paper raises, data of 80 Greek firms of the services sector are analysed with the help of factor analysis, cluster analysis and analysis of variance.

Findings

The findings reveal three types of firms pursuing different strategy orientations for dealing with competition (i.e. the hybridists: 44 firms, the confused strategists: 25 firms and the non‐strategists: 11 firms). Furthermore, they suggest that performance is dependent on these strategy types.

Research limitations/implications

The study provides new evidence outside the manufacturing industry and the US context, which dominates the literature. Nonetheless, further empirical research will help to generalise the findings within the services sector in Greece and/or comparable national contexts, especially within the European Union.

Practical implications

The empirical results highlight the discussion of pure vs hybrid forms of competitive advantage pursued by service firms operating at home. A message of the utmost importance for practitioners is that the hybrid form of competitive advantage, which places high emphasis on low cost, is the prevailing and the best‐performing strategic choice.

Originality/value

The study focuses on strategy types of firms to offer a view on the basis of competitive advantage within the services sector of a dynamic European Union member state. By excluding the well‐known pure and stuck‐in‐the‐middle alternatives, the evidence highlights the lack of a strategy and combined choices of strategic orientations, which differ in terms of performance. It appears that the dominant argument of strategic purity is not applicable to all firms in all countries.

Details

Management Decision, vol. 48 no. 7
Type: Research Article
ISSN: 0025-1747

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Article

Elsa Vieira and João Ferreira

The purpose of this paper is to identify the strategies that private fitness centres implement and to evaluate their impact on financial performance.

Abstract

Purpose

The purpose of this paper is to identify the strategies that private fitness centres implement and to evaluate their impact on financial performance.

Design/methodology/approach

Based upon a sample of 151 private fitness centres in Portugal, multivariate statistics report the implemented strategies and their effect on financial performance. We applied exploratory factorial analysis as our methodology to identify the types of strategy and the ANOVA in order to verify if there are differences of financial performance in the strategies.

Findings

The results obtained demonstrate how private fitness centres implement different strategies, including: cost leadership, differentiation, focus, quality of service, combined and stuck in the middle approaches. The relationship between strategies and financial performance, private fitness centres adopting a cost leadership strategy obtain the best financial performance levels in terms of the sales variable relative to any other strategy but with the combined strategy returning a better performance in terms of the return on assets when compared with the cost leadership strategy.

Originality/value

The originality of this paper stems from its identification of the strategies implemented by private fitness centres, thus, just what type of strategies are in effect across the fitness industry: leadership through cost, differentiation or a focused strategy. However, in addition to ascertaining just which strategies undergo implementation, it is also pertinent in determining just which strategy drives the best financial performance for private fitness centres given that private centres may only remain in the market when achieving financial sustainability. Therefore, this paper seeks to provide information for managers as regards the strategies implemented and their impacts on the financial performance of private fitness centres.

Details

Sport, Business and Management: An International Journal, vol. 10 no. 3
Type: Research Article
ISSN: 2042-678X

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Book part

Rico Baldegger, Pascal Wild and Patrick Schueffel

Today, newly founded businesses are inevitably driven to start in a digital form from day 1. Moreover, most existing businesses conceive digitalization as an important…

Abstract

Today, newly founded businesses are inevitably driven to start in a digital form from day 1. Moreover, most existing businesses conceive digitalization as an important part of their strategic orientation by developing and improving their digital assets and digitalizing their processes. By taking account of this development, this chapter investigates how entrepreneurial orientation (EO) affects a small firm’s proclivity to both digitization and internationalization and their performance that comes from it. Internationalization has been a key topic for many small- and medium-sized companies (SMEs) over the past decades. As digitization is currently taking over the helm from internationalization as the most pressing topic affecting business, we carried out research among SMEs to understand the interplay of these factors influencing business performance. The focus of the research was on the precursory factors inducing firm performance as well as on their interrelationships. Using a sample of 357 SMEs, EO is found to be significantly closely associated with an SME’s degree of digitization as well as with its overall performance. In contrast, EO does not affect the SME’s level of internationalization. This result is surprising considering that proactive and risk-taking firms tend to be more inclined to enter foreign and distant markets.

Details

Entrepreneurial Orientation: Epistemological, Theoretical, and Empirical Perspectives
Type: Book
ISBN: 978-1-83867-572-1

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Book part

Sukanlaya Sawang, Roxanne Zolin, Judy Matthews and Meriam Bezemer

Business literature reveals the importance of generating innovative products and services, but much of the innovation research has been conducted in large firms and not…

Abstract

Business literature reveals the importance of generating innovative products and services, but much of the innovation research has been conducted in large firms and not replicated in small firms. These firms are likely to have different perspectives on innovation, which means that they will probably behave differently to large firms. Our study aims to unpack how firms in Spatial Information perceive and engage in innovation as a part of their business operation.

To investigate these questions we conduct 20 in-depth interviews of top management team members in Spatial Information firms in Australia.

We find that small firms define innovation very broadly and measure innovation by its effect on productivity or market success. Innovation is seen as crucial to survival and success in a competitive environment. Most firms engage in product and/or service innovations, while some also mentioned marketing, process and organisational innovations. Most innovations were more exploitative rather than exploratory with only a few being radical innovations. Innovation barriers include time and money constraints, corporate culture and Government tendering practices. Our study sheds a light on our understanding of innovation in an under-researched sector; that is Spatial Information industry.

Details

Exploration and Exploitation in Early Stage Ventures and SMEs
Type: Book
ISBN: 978-1-78350-655-2

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Article

Adji Achmad Rinaldo Fernandes and Solimun

This research aims to examine the moderating effect of strategic orientation on the effect of environmental uncertainties on business performance and the moderating effect…

Abstract

Purpose

This research aims to examine the moderating effect of strategic orientation on the effect of environmental uncertainties on business performance and the moderating effect of innovations on the effect of environmental uncertainties on performance of the business in the aviation industry in Indonesia.

Design/methodology/approach

Research data were collected in stages by means of interviews with corporate leaders of Indonesian airlines and branch managers of several airports, as well as with the Directorate of Civil Aviation as the regulator. A pre-test and focus group discussion (FGD) were conducted to directly determine the questionnaire aspects of the research object, following which an immediate revision was made to the questionnaire. The data from the survey used in each variable were obtained from the mail questionnaire survey. The data collected using the survey are the main data used in the present study.

Findings

The model of environment–strategy–performance (ESP) can work well in improving performance if supported by innovations. These findings deepen the ESP paradigm in the aviation industry (Miles and Snow, 1978; Segev 1987; Covin and Slevin, 1989; Miller and Shamsie, 1996) that during conditions of high environmental uncertainties, strategic orientation, rather than a single response, will be effective if supported by innovations that provide the strategy with flexibility. The initial implications of these modeling results generate the findings that the effect of environmental uncertainties in the aviation industry (classified as strictly regulated) on performance of a company is largely determined by the direction of the strategic orientation and the innovation level.

Research limitations/implications

Interactions between innovations and environmental uncertainties have a significant negative effect on the achievement of business performance of the branches with a coefficient of 0.02 and a t-value of 2.00, meaning that the innovation level of a branch has an increasingly stronger influence on the business performance of the branch in the uncertain environment with limitations or underestimated by the branch manager or the innovation level of the branch is not supported with airport facilities and services, which means that the provision of airport facilities and services is inversely proportional to the needs of the airline branches. In other words, the variable “innovations” is a moderating variable for the effect of environmental uncertainties on business performance.

Practical implications

The results of the modeling performed in this research also show that innovations play a major role in the implementation of the ESP model (Blumentritt and Danis, 2006). The empirical phenomena and descriptive analysis results suggest that the Indonesian airlines which have been quite successful and have demonstrated an above-average performance possess higher levels of innovations. This finding corroborates that of previous studies that environmental uncertainties and direction of strategic orientation will determine the ability of a company to overcome the barriers to innovations, by maximizing innovative resources in achieving the target of innovations (Manu, 1992; O’Regan and Ghobadian, 2005; Hult et al., 2003), and more specifically, it indicates that strategic orientation that is prospective in nature leads to a high level of innovations (Salavou et al., 2004).

Social implications

The research findings indicate that innovations have a central role in the ESP models and are able to offer a new concept as a modification of the ESP model which in the study is called ESIP. The role of innovations in the ESIP model puts innovations as a variable moderating the effect of environmental uncertainties on performance and the effect of strategic orientation on performance. Moreover, based on the summary of the results for the analysis of the ESIP model, the following can be explained: first, environmental uncertainties have a significant and positive effect on the innovation level or the higher the level of environmental uncertainties, the more is the number of the innovations that an Indonesian airline branch creates. External environmental conditions that are likely to be complex and dynamic found in the area of operations make the branch management more able to identify barriers to innovations and manage resources to be more creative and productive for the attainment of the targets of innovations.

Originality/value

Innovations in business models as a new effort in improvisation specific to the business stage of the basic model (not very valuable) become more advanced business processes to produce products that are more valuable for consumers, at a more efficient cost with better profitability (Chesbrough, 2007b). So far, research on the role of innovations in response to environmental uncertainties and implementation of strategies to improve the performance of the ESP model is still done partially, so that there is no comprehensive model to describe the role of innovations in this ESP model, or let us say that a gap exists between theories and opportunities to conduct further research on the role of innovations in the ESP model.

Details

International Journal of Law and Management, vol. 59 no. 6
Type: Research Article
ISSN: 1754-243X

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Article

Adji Achmad Rinaldo Fernandes and Solimun

This study aims to (1) examine the mediating effect of strategic orientation on the effect of environmental uncertainties on business performance, and (2) examine the…

Abstract

Purpose

This study aims to (1) examine the mediating effect of strategic orientation on the effect of environmental uncertainties on business performance, and (2) examine the mediating effect of innovations on the effect of environmental uncertainties on performance of the business in the aviation industry in Indonesia.

Design/methodology/approach

The research design was conducted through a survey, and the testing form was carried out using “Relationship Causal Studies” or a study to analyze the causality among environmental uncertainties, strategic orientation, innovations and performance of branches/stations of airlines in the Indonesian aviation industry. The sample was selected by determining the number of branches/stations of the Indonesian airlines to be selected into the sample, then more than one unit managers were selected as respondents representing their respective branches/stations. The number of the target sample in this study was 250 branches. Techniques used to address the hypotheses of the present study were Descriptive Analysis and Structural Model Analysis. The inferential statistical analysis focuses on the subject of the analysis and data interpretation to draw conclusions.

Findings

These research findings provide a contextual overview of the aviation industry in Indonesia that activities to make innovations in airline branches play a vital role in encouraging business performance. Moreover, the analysis shows that the more innovative a branch the better its business performance. This corroborates the finding (Spacapan and Bastic, 2007; Talke, 2007) that being highly innovative can ensure sustainable and long-term business performance.

Research limitations/implications

The findings of this research suggest that innovations mediate the effect of environmental uncertainties on business performance. These findings corroborate the results of previous studies that suitability between strategic orientation and innovations of a company in response to environmental uncertainties will affect performance of the company (Li and Gima, 2001; Manu, 1992). These findings also strengthen the view that companies with a higher level of innovations (innovative) have better business performance and competitive advantages (Kessler and Chakrabarty, 1996; Salavou et al., 2004; Spacapan and Bastic, 2007). Furthermore, based on findings, it can be interpreted that management that is able to overcome barriers to innovations, maximize innovation resources and achieve the target of innovations in the form of creation of better products/services will have better performance. The ability of the management to identify and overcome barriers to innovations and maximize the sources of innovation will generate products or services that can be accepted by the customers and eventually these products and services will be able to compete with better business performance (Blumentritt and Danis, 2006).

Practical implications

Findings of this research indicate the positive and significant mediating effect between environmental uncertainties on business performance, through the mediation of innovations, competitive conditions of the industrial environment which can encourage organizations to evolutionarily be more innovative in managing business to compete in the long term (Franke, 2007). This is also consistent with the theory of evolutionary economics (Nelson and Winter, 2000) that the old strategy may not suit the changes in the environment, and therefore companies should continue to seek new breakthroughs with persistent improvement and innovations.

Social implications

Dynamic and competitive conditions of the industrial environment require organizations to more intensively explore sources (capabilities) of innovations and accelerate generation of the innovations (Franke, 2007; Berry et al., 2006; Dobni, 2006; Davila et al., 2006; Spacapan and Bastic, 2007). Contextually, it appears that the competitive conditions of the aviation industry in either the short term or in the long term require business actors to be more innovative and to survive (Franke, 2007).

Originality/value

Innovations in business models as a new effort in improvisation specific to the business stage of the basic model (not very valuable) become more advanced business processes to produce products that are more valuable for consumers, at a more efficient cost with better profitability (Chesbrough, 2007b). So far, research on the role of innovations in response to environmental uncertainties and implementation of strategies to improve the performance of the environment-strategy-performance (ESP) model is still done partially so that there is no comprehensive model to describe the role of innovations in this ESP model, or let us say that a gap between theories and opportunities to do further research on the role of innovations in the ESP model exists.

Details

International Journal of Law and Management, vol. 59 no. 6
Type: Research Article
ISSN: 1754-243X

Keywords

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