Abstract
Based on data from the European meat processing industry three sets of competitive sources on business performance are studied: Firm Specific Advantages (FSAs), Localizational Specific Advantages (LSAs) and Relation Specific Advantages (RSAs). The results indicate that the FSAs and the RSAs are the most important explanatory variables on business performance, however, with strong interaction effects between the two sets of variables. Given the findings, we call for further empirical validation of how the different sets of competitive advantages interact and reinforce each. A closer examination of the nature of the RSAs, ie resource accumulation and development through inter‐firm co‐operation is also needed.
Highlights
An extensive body of literature focusing on a broad range of issues pertaining to competitive advantage of the firm has been published up till (Barney, 1991; Bharedwaj, Vanradarajan & Fahy, 1993; Day & Wensley, 1988), this article is based on the premise that a closer examination of the sources of competitive advantage in the context of a specific industry, ie the meat processing industry, can provide managerial insight into strategic problems and opportunities that may not be readily apparent at a more aggregate level
Without going deeply into the literature on firm competition and the sources of competitive advantage, we suggest that each of the paradigms relies on three different sets of sources: Firm Specific Advantages (FSAs), Localization Specific Advantages (LSAs) and Relationships Specific Advantages (RSAs)
We suggest the following hypothesis: H5: There is an indirect relationship from the Localizational Specific Advantages (LSAs) factors to the Relation Specific Advantages (RSAs) factors when explaining the business performance/strengths of the firm
Summary
A classic problem in strategy and marketing research has been linked to the question: The importance of internal versus external sources of competitive advantage and the links to business performance (Hill & Deeds, 1996; Hitt & Ireland, 1985; Mauri & Michaels, 1998; Porter, 1991; Rumelt, 1991). The paper is organized as follows: First we focus a theoretical lens on various types of sources of competitive advantages based on three main paradigms. Hypotheses are developed connecting sources of advantages and their interaction with business performance. We conclude with a discussion of our findings and implications for further study
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