A resource‐based view of the small firm : Using a qualitative approach to uncover small firm resources

Purpose – The purpose of this paper is to describe a qualitative study of small retailers, designed to uncover perceptions of resources which may be utilized to create competitive advantages and improve performance. The resource‐based view (RBV) of the firm has focused on large firms, and this study extends RBV to the small firm. Design/methodology/approach – Using focus groups of small retailers within four communities in the USA, open‐ended questioning and discussions were utilized to help elicit responses about owner's resources. Findings – The concepts of community brand identity, local social capital and environmental hostility (though not part of the original discussion guide), emerged as important constructs. Both community brand identity and social capital were articulated by focus group participants as resources which helped them to be successful. Brand identity was seen as important regardless of environment, while social capital emerged as a resource used more in hostile environments. Research limitations/implications – Brand identity and social capital are non‐economic resources which may help small retailers to compete in increasingly competitive environments. The RBV holds that to provide a competitive advantage, a firm's resources must be valuable, rare, imperfectly mobile and non‐substitutable. This qualitative study supports the conceptualization of brand identity and social capital as such resources. Practical implications – Small business owners need to recognize the value of non‐monetary resources. Once these are recognized they can then be leveraged by the business owner to improve performance. Originality/value – Few studies exist which apply the RBV to small firms. Only recently have scholars begun to operationalize constructs of the RBV. Researchers have not investigated social capital or brand identity as mitigators of environmental hostility. This study addresses each of these issues.