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Profitable Small Business Strategies under Different Types of Competition

Author

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  • Radha Chaganti
  • Rajeswararao Chaganti
  • Vijay Mahajan

Abstract

This study empirically examines the profit impact of different strategies under four different types of competition: 1. Low-intensity price and promotion competition; 2. Price competition; 3. Promotion competition; and 4. High-intensity price and promotion competition. The study finds that broad product scope is a key determinant of a firm's profitability in low-intensity price and promotion competition, price competition, and high-intensity price and promotion competition. However, under promotion competition, quality-image orientation was the most profitable strategy.

Suggested Citation

  • Radha Chaganti & Rajeswararao Chaganti & Vijay Mahajan, 1989. "Profitable Small Business Strategies under Different Types of Competition," Entrepreneurship Theory and Practice, , vol. 13(3), pages 21-36, April.
    • Handle: RePEc:sae:entthe:v:13:y:1989:i:3:p:21-36
    DOI: 10.1177/104225878901300304
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    Citations

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    Cited by:

    1. James J. Chrisman & Alan Bauerschmidt & Charles W. Hofer, 1998. "The Determinants of New Venture Performance: An Extended Model," Entrepreneurship Theory and Practice, , vol. 23(1), pages 5-29, October.
    2. Wadim STRIELKOWSKI, 2012. "Factors That Determine Success Of Small And Medium Enteprises. The Role Of Internal And External Factors," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 7(3(21)/ Fa), pages 334-350.
    3. Amason, Allen C. & Shrader, Rodney C. & Tompson, George H., 2006. "Newness and novelty: Relating top management team composition to new venture performance," Journal of Business Venturing, Elsevier, vol. 21(1), pages 125-148, January.
    4. Jeffrey G. Covin & Teresa Joyce Covin, 1990. "Competitive Aggressiveness, Environmental Context, and Small Firm Performance," Entrepreneurship Theory and Practice, , vol. 14(4), pages 35-50, July.
    5. Lin Song & Li Jing, 2017. "Strategic orientation and performance of new ventures: empirical studies based on entrepreneurial activities in China," International Entrepreneurship and Management Journal, Springer, vol. 13(4), pages 989-1012, December.
    6. Edelman, Linda F. & Brush, Candida G. & Manolova, Tatiana, 2005. "Co-alignment in the resource-performance relationship: strategy as mediator," Journal of Business Venturing, Elsevier, vol. 20(3), pages 359-383, May.
    7. Soto Alvarez, J.M., 1998. "Estrategias genéricas de entrada para una nueva empresa: influencia en los resultados," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 10, pages 147-163, Diciembre.
    8. Sushil Kumar & Satyasiba Das, 2020. "Integrated framework of strategic orientation, value offerings and new venture performance," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 47(1), pages 3-17, March.
    9. Hervé Remaud & Jean-Pierre Couderc, 2006. "Wine business practices: A new versus old wine world perspective," Agribusiness, John Wiley & Sons, Ltd., vol. 22(3), pages 405-416.
    10. de Vries, A.G.B. & Pennings, H.P.G. & Block, J.H., 2013. "Trademark or patent? The effects of market structure, customer type and venture capital financing on start-ups' IP decisions," ERIM Report Series Research in Management ERS-2013-002-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    11. Brush, Candida G. & Chaganti, Radha, 1999. "Businesses without glamour? an analysis of resources on performance by size and age in small service and retail firms," Journal of Business Venturing, Elsevier, vol. 14(3), pages 233-257, May.
    12. Ensley, Michael D. & Pearson, Allison W. & Amason, Allen C., 2002. "Understanding the dynamics of new venture top management teams: cohesion, conflict, and new venture performance," Journal of Business Venturing, Elsevier, vol. 17(4), pages 365-386, July.
    13. Dan Li & Manuel Portugal Ferreira, 2006. "The Evolutionary Model of Entrepreneurial Firms' Dependence on Networks: Going beyond the start-up stage," Notas Económicas, Faculty of Economics, University of Coimbra, issue 24, pages 48-63, December.
    14. Jiawen Chen & Linlin Liu, 2018. "Profiting from Green Innovation: The Moderating Effect of Competitive Strategy," Sustainability, MDPI, vol. 11(1), pages 1-23, December.
    15. Robert N. Lussier & Matthew C. Sonfield & Joel Corman & Mary McKinney, 2001. "Strategies Used by Small Business Entrepreneurs," American Journal of Business, Emerald Group Publishing, vol. 16(1), pages 29-38.
    16. Lin Song & Li Jing, 0. "Strategic orientation and performance of new ventures: empirical studies based on entrepreneurial activities in China," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-24.

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