THE RESOURCE-BASED VIEW: THE INTERNAL AND
EXTERNAL VALUE DILEMMA
Master thesis, MScBA, specialization Small Business & Entrepreneurship University of Groningen, Faculty of Economics and Business
July, 2013 Sjoerd van Kersbergen Student number: 1557386
Abstract
Table of contents
1. Introduction ... 6
2. Literature ... 7
2.1 The RBV tendency to tautology ... 7
2.2 Conceptual work on the RBV’s competitive advantage and value ... 11
2.3 Empirical work on the RBV’s competitive advantage and value ... 20
2.4 Suggested framework for solving the RBV tautology ... 23
2.4.1 The dependent variable: (Sustainable) competitive advantage ... 24
2.4.2 The Firm, Resources and capabilities ... 30
2.4.3 The independent variables: Value and Rareness ... 33
2.4.4 The suggested framework ... 36
3. Methodology ... 37 3.1 Data collection ... 37 3.2 Research design ... 38 3.3 Research sample ... 38 3.4 Interviews ... 39 3.5 Framework variables ... 40 4. Results ... 45
4.1 The furniture- and interior making industry and its KSF ... 45
4.2 Cases ... 48
4.2.1 Case one: TecMon interieur BV ... 48
4.2.2 Case two: Houtwerk meubel en keukenmakerij Hattem BV ... 53
4.2.3 Case three: OpMaat vormgevers en meubelmakers VOF ... 57
4.4 Comparison cases (rareness) ... 69
4.5 Competitive advantage ... 72
5. Discussion... 76
5.1 Limitations and future research ... 77
5.2 Final conclusion ... 78
6. References ... 80
6
1. Introduction
The focus of recent strategic management research has been dominantly on the firm and its specific resources and capabilities that affect firm performance. This focus on the firm, the resource based view (RBV), has led to many advances in strategic management as a field of research (Wernerfelt, 1984; Barney, 1991; Peteraf, 1993; Amit and Schoemaker, 1993; Makadok, 2001, Newbert, 2007). The core of the RBV is that by using its valuable, rare, inimitable, and non-substitutable (VRIN) resources and capabilities a firm can create a sustainable competitive advantage (SCA) and above average performance (Barney, 1991). Although the RBV of the firm has been widely accepted as a theory, it also has been subjected to extensive criticism. Barney (2011) reflects on this and states that for theories to survive they must innovate and acknowledges that the RBV needs to be further developed to maintain its current status as a dominant theory. Kraaijenbrink et al. (2010) review and assess the principal critiques evident in literature on the RBV. Using their article as a starting point the aim of this research is the ‘value’ issue as described by Kraaijenbrink et al. (2010). The current conceptualization of value turns the RBV into a trivial heuristic, an incomplete theory, or a tautology (Kraaijenbrink et al. 2010). Tautological theories are true by definition and therefore not able to be tested, this threatens the RBV as a viable theory. Priem and Butler (2001a) argue that value is exogenously determined. However the RBV as developed by Barney (1991) itself does not provide the means for such alternative external determination (Priem and Butler, 2001b). Although, a clear solution for the value issue is yet to be discovered, many studies based on Barney’s (1991) RBV have approached the issue in different ways. These studies offer possibilities into solving the tautological conceptualization of value.
This study aims to answer the following research question: How can the concept of value within the resource based view be redefined so that it overcomes its current tautological conceptualization?
7 factors) and their performance. In the fourth section the results of the analyses are given. In the fifth and last section the answer to the research question is given and the suggested framework is valued, accompanied by a discussion including encountered research issues, suggestions for future research and theoretical insights.
2. Literature
Kraaijenbrink et al. (2010) recognized that the RBV, even though it had become one of the most influential and cited theories in the history of management theorizing, has been extensively criticized. Their article (2010) is a review and assessment of the principal critiques evident in literature. Kraaijenbrink et al. (2010) divide the critiques on the RBV into eight categories. (a) The RBV has no managerial implications, (b) the RBV implies infinite regress, (c) the RBV’s applicability is too limited, (d) sustainable competitive advantage is not achievable, (e) the RBV is not a theory of the firm, (f) VRIN is neither necessary nor sufficient for sustainable competitive advantage, (g) the value of a resource is too indeterminate to provide for useful theory, and (h) the definition of resource is unworkable. In their article Kraaijenbrink et al. (2010) argue that the first five critiques do not really threaten the RBV’s status. They state that “they are incorrect or irrelevant or apply only when the RBV is taken to its logical or impractical extreme; better demarcating the RBV and its variables can contain them. However the last three critiques offer more serious challenges that need to be dealt with if the RBV is to more fully realize its potential to explain sustainable competitive advantage, especially beyond predictable, stable environments (p.349)”. The aim of this research report is one of those last three critiques, the Value issue as described by Kraaijenbrink et al. (2010). The current conceptualization of value turns the RBV into a tautology (Kraaijenbrink et al. 2010). It stands on analytic statements that are tautological, true by definition, and not able to be tested (Kraaijenbrink et al., 2010). This means the RBV does not fulfill the criteria for a viable theory (Priem and Butler, 2001a, 2001b; lockett et al., 2009).
2.1 The RBV tendency to tautology
8 proposed resource based framework. Barney (2001) reacted by addressing the critiques of Priem and Butler (2001a), this reaction was followed by another publication of Priem and Butler (2001b). This academic discussion was essential for developing the RBV and resulted in many suggestions for further research. However, many of Priem and Butler’s core issues are still unsolved as reviewed in Kraaijenbrink et al. (2010). One of those core issues is this aim of this research, the concept value within the RBV, explaining their discussion is therefore essential.
Priem and Butler (2001a) noticed while the RBV’s popularity increased, there was little critical evaluation of the RBV as a theory or of its potential contributions to strategic management. Priem and Butler (2001a) examine the RBV as a theory, by seeing if the proposed resource based framework by Barney (1991) satisfies the key requirements for theoretical systems. Barney’s (1991) RBV stands on two elemental assumptions: (1) resources are distributed heterogeneously across firms (firm resource heterogeneity), and (2) these productive resources cannot be transferred from firm to firm without cost (firm resource immobility). Given these assumptions, Barney (1991) makes further arguments (see figure 1).
Figure 1. The Resource based view by Barney
Source: Barney, 1991; 112
9 after investigation. Contrary to, non-theoretical, analytic statements which can be determined to be true or false based on their logic or their definitions of terms (Priem and butler, 2001a). Priem and Butler (2001a) examine whether statements found in the RBV are synthetic or analytic. This is done by replacing each term in a basic statement of the theory with its definition in the theory. This process allows one to better evaluate whether the statements are, or are not, true by definition or in other words tautological. Priem and Butler (2001a) investigated the following theoretical statement “valuable and rare organizational resources can be a source of competitive advantage” Barney (1991: 107). Priem and Butler (2001a) continue by giving Barney’s definition for firm resources, this is “firm attributes that may enable the firm to conceive of and implement value-creating strategies” (Barney, 1991: 101). Then they state “that he defines resources as valuable when they enable a firm to conceive of or implement strategies that improve its efficiency and effectiveness and when they exploit opportunities or neutralize threats in a firm’s environment. Barney defines competitive advantage as a firm implementing a value creating strategy not simultaneously being implemented by any current or potential competitors. Rarity is not specifically defined but is used in its general sense” (Priem and Butler, 2001a: 27, 28). When these specific definitions are substituted for the terms in the theoretical statement “valuable and rare organizational resources can be a source of competitive advantage” it produces revised statements, including
1. “Uncommon organizational attributes that enable firms to conceive of and implement value-creating strategies can be a source of implementing a value-value-creating strategy not simultaneously being implemented by any current or potential competitors,”
2. “Uncommon organizational attributes that enable a firm to conceive of or implement strategies that improve its efficiency and effectiveness can be a source that may enable a firm to conceive of or implement strategies that improve its efficiency and effectiveness,” and
3. “Uncommon organizational attributes that exploit opportunities and neutralize threats in a firm’s environment can be a source of implementing an opportunity-exploiting and threat –neutralizing strategy not simultaneously being implemented by any current or potential competitors.” (Priem and Butler, 2001a: 28)
10 characteristics argued to lead to competitive advantage are value and rarity (Priem and Butler, 2001a). Priem and Butler (2001a) argue that value is the fundamental component determining the extent of competitive advantage. They state that ‘if a firm consistently generates value greater than that generated by other firms in its industry, it must have at least one rare resource. If a firm has rare resources, however, it does not follow that it will generate value greater than that of other firms in its industry’. The RBV value definitions clearly show that it is the market environment, through opportunities and threats that determines the degree of value held by each firm resource in the RBV (Priem and Butler, 2001a). They state that as the competitive environment changes, resource value may change. Thus, resource value is determined from a source exogenous to the RBV (Priem and Butler, 2001a). Therefore, subsequent changes in customer preferences, resulting in further shifts in demand could easily reduce the factors’ values and erode an advantage (Priem and Butler, 2001a). Priem and Butler (2001a) continue their critique and discuss the static nature of the RBV and the all-inclusive classification of resource. Both critiques are important as assessed by Kraaijenbrink et al. (2010), yet they are considered to be outside of the aim of this research paper and are therefore skipped and deemed topics for further related research.
11 synthesis of the resource- and environment-based perspectives should be the next step toward a more complete strategy theory (Priem and Butler, 2001a).
Barney and Priem and Butler’s discussion resulted in three important implications for this research paper. First, value of resources must be defined in other terms than the definition of the competitive advantage, to resolve the tendency to tautology of the RBV. Second, value of resources must be determined exogenously, this means as well as outside of the theory and as by its environment. Third, the combining of the resource- and an environment-based perspective should be sought (although Barney strongly disagrees in many of his publications).
2.2 Conceptual work on the RBV’s competitive advantage and value
Several researchers have approached the RBV differently since Barney (1991) proposed his framework. As discussed earlier his framework has some obvious flaws (Priem and Butler, 2001a; 2001b). It is therefore interesting to look at alternative approaches for and critique on the RBV and possible adaptations on the framework, so that these flaws maybe solved. The different authors with their conceptual work will be discussed in chronological order.
12 Figure 2. Key constructs of the framework by Amit and Schoemaker
Source: Amit and Schoemaker, 1993; 37
13 Managers need to identify a set of strategic assets which match the SIF, these assets can then lead to sustainable competitive advantage and thereby generate organizational rents (Amit and Schoemaker, 1993).
Figure 3. Characteristics of SIF
Source: Amit and Schoemaker, 1993; 36
14 Schoemaker (1993) (see figure 3), the statements create more uncertainty about the factors. Although, this approach suits the model of Amit and Schoemaker, because they want to show what managers face when they need to make decisions about the firm’s strategic assets, the SIF or KSF exogenous (to the firm) part will require some rigorous adjustment to solve the issues with Barney’s (1991) model. In summary, Amit and Schoemaker do not mention the issues with Barney’s RBV explicitly yet they did make certain adjustments, which indicate they noticed the issues. And although, the purpose of their external SIF is somewhat different then needed to solve the tautology of Barney, they can be used as a potential solution for the exogenous part for Barney’s (1991) model.
Peteraf’s (1993) article explains the underlying economics of the RBV and provides cornerstones for the competitive advantage. Peteraf’s model gives four conditions that underlie a sustained competitive advantage (above-normal return), superior resources (heterogeneity within an industry), ex post limits to competition (prevent the rents from being competed away), imperfect resource mobility (factors remain with the firm), and ex ante limits to competition (keep costs from offsetting the rents). What’s interesting about the model is that it focusses on the market (market conditions), yet it explains phenomena created by the firm (advantage by resources). Peteraf’s (1993) article is considered together with Barney (1991) the foundation for the RBV (Foss and Knudsen, 2003). Although Peteraf has a different approach to the RBV as Barney, it mainly focusses on the competitive advantage. In this focus, it only mentions (superior) resources briefly and chose to abstain of further explanation. Therefore, the article has less value in solving the tautology the RBV faces. However, Peteraf and Barney worked together in a later publication (Peteraf and Barney, 2003) their article will be assessed later on.
15 own (strategic) knowledge based assets. The RBV, then, requires a definition of the firm that reflects the complexity of underlying resources.” (Coff, 1999: 120-121) However, the appropriation of value by employees possessing critical knowledge based assets can be controlled by a firm. Using a resource based perspective the argument can be made that some firms are better at controlling and managing their employees and thus their knowledge. This means they are able to increase their advantages and/or lower this disadvantage resulting in a possible competitive advantage. Of course, the issues with the property of (ambiguous) intangible resources within firms are a difficult subject. However, it is a topic for further research and seems out of the boundaries of this research. The issue is taken in consideration in our framework for the definition of the firm (see chapter 2.4.2).
16 firm’s resources. Interestingly, their “key performances” rely on KSF (Vasconcellos and Hambrick, 1989) and core customer benefits (Pralahad and Hamel, 1990), both external for the firm. This link with the environment and a firm’s resources (or bundles) can solve the need for an external valuation. However, in the model this external link is only concisely described and would require a more in-depth investigation to be a solution for Priem and Butler’s (2001a) critique. Another issue with the model is that critical resources are tested for VRIN attributes (Barney, 1991), thus ignoring all critiques and the valuation of these resources in the first place. In summary, the model shows potential for solving the issues described by Priem and Butler (2001a, 2001b). Key performances and their relation with KSF and/or core customer benefits can be used as a starting blueprint for an adjusted RBV model.
Figure 4. Conceptual model by Rangone
Source: Rangone, 1999; 236
17 (Bowman and Ambrosini, 2000). They also suggest distinguishing value creation, value capturing, and value assessment. Meaning, even though value is created within the firm several forces influence the capturing of this value (as discussed by Coff (1999)). Bargaining is important for this capturing; this can be bargaining power by people (employees) and suppliers. For example, film stars receive a large amount of value created by films, whereas monopolistic suppliers can ask higher prices and thus also capture more value. This suggests combining the RBV (value creation) with market perspectives (bargaining power relations). They also mention an exogenous valuation of superior resources, namely by the customer (end consumer as well as firms buying resources). Both these suggestions are in line with Priem and Butler (2001a, 2001b). Although Bowman and Ambrosini discuss value in the RBV in their article, it is less of use for the solving the tautological nature of Barney’s assumptions. This is because they do not mention the relation between valuable resources and sustainable competitive advantage, rents, above average performance or any other definition of superior firm performance explicitly, they rather address the creation and capturing of value in a more general sense and economic orientated perspective.
The main focus of Makadok’s (2001) article is the assessment of the two distinct causal mechanisms; resource-picking and capability-building. What’s useful for this research is Makadok’s argumentation about the value of resources. They can appear a priori, by assessing value of resources at the moment of their selection, whereas the value of capabilities appears only post hoc, after resource deployment. This is comparable with what Miller (2003) describes, which will be discussed later on.
19 Figure 5. Conceptual model Sirmon et al.
Source: Sirmon et al., 2007; 276
20 What is interesting for this research is that Simon et al. (2007) elaborately discuss the external environment and its influence on value creation. They suggest that “because of high environmental uncertainty and varying degrees of environmental munificence (the scarcity or abundance of critical resources needed by firms operating within an environment), sustaining a competitive advantage over time is unlikely, with the result that a firm instead will seek to develop a series of temporary competitive advantages”. (Sirmon et al., 2007: 274) Furthermore, they give a fresh view on how firms, by managing their resources, can create and maintain value and also give a better insight in the meaning of the concept value within the RBV.
2.3 Empirical work on the RBV’s competitive advantage and value
In the last decade since Barney (1991) published his initial article about the RBV, many researchers have tried to test the assumptions in it. Several authors have published empirical studies and work reviewing empirical research surrounding the RBV. Interesting outcomes and possible adaptions made by these researchers are analyzed in this section. The most relevant (for the solving the tautology) will be assessed in chronological order.
Rouse and Daellenbach (1999) criticize quantitative empirical research approaches used for RBV research. They are critical of using cross-sectional analysis on large sample observations with secondary data (which is used regularly for this kind of research), as those approaches are unlikely to be able to disentangle the effects from such variety of sources, as industry, environment, and strategy, and fail to isolate sustained competitive advantage (Rouse and Daellenbach, 1999: 488-489). They suggest detailed, fieldwork-based comparison of carefully selected firms. As they make clear in their conclusion: “The message from the resource-based view is clear. Factors inside organizations are a primary source of sustainable advantage. The discovery and evaluations of those advantages must, therefore, be done in organizations.” (Rouse and Daellenbach, 1999: 492) This argument will be used when this paper’s framework is tested in the field. The case-study will consist of carefully selected firms, further discussed in the methodology section.
21 creation, and, in fact, often act as liabilities.” (Miller, 2003: 961) This is interesting because it shows firms can create an advantage from initially worthless asymmetries. Firms with a seemingly disadvantage can turn this around and create an advantage which can be sustainable. Essentially, Miller (2003) shows that many firms might possess resources that can create potential sustainable advantages, yet their performance might now show it initially. This gives another interesting perspective on the difficulties with valuating resources.
23 Sirmon et al. (2008) tested theory regarding managerial actions within a resource-based setting, this developing theory is known as “resource management” (Sirmon et al., 2007). They tested their theory using dyadic data from the major league baseball, pairing and comparing resources and results of teams and their management. Their research suggests that resource management actions are critical to achieving and sustaining competitive advantage. Additionally, they demonstrate that resource management is more important than resources when rivals’ stocks of resources are similar. Even though a firm may have a substantial advantage in its stock of resources, only the subset of resources that are bundled and deployed directly contributes to a firm’s competitive advantage (Sirmon et al., 2008). Greater depth and scope in the organization’s resources increase managers’ ability to affect outcomes through bundling and deployment actions (Sirmon et al., 2008). Their article adds an interesting look on a firm’s competitive advantage. They discuss the concept of “comparative resource advantages” (Sirmon et al., 2008: 921). Which comes from: “It is strength relative to competitors that matter and not absolute strengths” (Wernerfelt and Karnani, 2005: 401). Meaning, a firm can have a valuable set of resources, yet it matters in relation to its competitors. Another firm might have even more valuable resources and therefore achieve the competitive advantage. This is in line with Priem and Butler’s (2001a) assumptions that resource can only be assessed on value in relation to their specific environment or context.
2.4 Suggested framework for solving the RBV tautology
24 The RBV was developed to provide an explanation for performance differences among competing firms, attributable to the differences in their resources (Peteraf and Barney, 2003). As mentioned before, Barney’s (1991) RBV stands on two elemental assumptions: (1) firm resource heterogeneity, and (2) firm resource immobility. Without these assumptions, firms would not be able to achieve a competitive advantage, as competitors could simply acquire the same resources. Given these assumptions, Barney (1991) makes further arguments. Resources that are both rare and valuable can produce a competitive advantage. When such resources are also simultaneously inimitable and nonsubstitutable, those resources may produce a sustainable competitive advantage (Barney, 1991). The resource attributes value, rareness, inimitability, and nonsubstitutability are the independent variables which predict the dependent variable (sustainable) competitive advantage.
2.4.1 The dependent variable: (Sustainable) competitive advantage
In any research it is important to clearly explain what the dependent variables are, in the case of Barney’s RBV it is a firm’s competitive advantage and possible sustainable competitive advantage. Although these terms have been generally accepted in strategic management literature, the definitions are still lacking (Kraaijenbrink et al., 2011). To reach an improved definition for competitive advantage it is important to look at all the concepts which have been found to be on the dependent variable side of the RBV. These are: competitive advantage and sustainable competitive advantage; firm performance and above-average firm performance; and competitors. These concepts will be discussed in the next section.
Barney (1991) defined the competitive advantage as:
- A firm implementing a value creating strategy not simultaneously being implemented by any current or potential competitors (Barney, 1991: 102)
25 - A firm implementing a value creating strategy not simultaneously being implemented by any current or potential competitors and when these other firms are unable to duplicate the benefits of this strategy. (Barney, 1991: 102)
Clearly these definitions are tautological when the independent variables are value and rareness (Priem and Butler, 2001a). The RBV is continued and elaborated in Peteraf and Barney (2003). In their article the definition of competitive advantage is further developed, they state:
- An enterprise has a competitive advantage if it is able to create more economic value than the marginal (breakeven) competitor in its product market (Peteraf and Barney, 2003: 314)
Following from that they explain economic value as:
- The economic value created by an enterprise in the course of providing a good or service is the difference between the perceived benefits gained by the purchasers of the good and the economic costs to the enterprise (Peteraf and Barney, 2003: 314)
26 So what does a competitive advantage stand for? Peteraf and Barney (2003) direct it toward value creation. This perspective highlights the process in which the firm creates value by using its advantages. The appropriation of this created value depends on more factors outside of the RBV (Peteraf and Barney, 2003). This makes operationalizing very difficult, as for example firm performance, empirically fairly easy to test, does not necessarily show the full effect of the value created by a competitive advantage. This is because firm performance only reflects the final appropriation of value for owners/shareholders and other exogenous effects can influence the performance of a firm as well (Makadok, 2001; Newbert, 2007). For larger firms value appropriation will be more difficult to identify then in SME’s, where its stakeholder relations and their bargaining power are less complex. The initial competitive advantage (Barney, 1991) is further developed by Peteraf and Barney (2003) to the benefit (for customers) increasing and cost decreasing effect of a firm’s resources, this relative to its (marginal) competitors. However, Peteraf and Barney (2003) give no method to make the comparison with competitors. So how do we define the competitive advantage? When looking at existing literature, different definitions of the concept have been numerous over the years (see table 1). After reviewing most main RBV articles and including related research fields (e.g. Besanko et al., 2012) this paper will define the concept as follows, combining the different authors and keeping the critiques of Priem and Butler (2001a) in mind.
Competitive advantage:
When the firm earns a higher rate of economic profit than the average rate of economic profit of firms within the same market
27 influences. Within the same market (Besanko et al., 2012: 295) therefore stands for firms which are subject to the same KSF and are influenced by similar stakeholders.
Table 1. Various definitions of competitive advantage Competitive advantage
Barney (1991) A firm implementing a value creating strategy not simultaneously being implemented by any current or potential competitors
Amit and Schoemaker (1993)
Rents due to firms resources and capabilities (strategic assets) Peteraf (1993) Four conditions.
1 – superior resources, 2- ex post limits to competition, 3 – imperfect resource mobility, 4 – ex ante limits to competition
Coff (1999) A firm may have an advantage over competitors even if rent does not accrue to investors- rent may be distributed anywhere in the nexus (firm)
Rouse and Daellenbach (1999)
Not defined Rangone (1999) Not defined Bowman and Ambrosini
(2000)
Super normal profits
Makadok (2001) Not defined (Economic rents was used as factor) Miller (2003) Not defined
Peteraf and Barney (2003)
Create more economic value than the marginal competitor in its product market
Ainuddin et al. (2007) Not defined (Firm performances was used as unit of analysis)
Newbert (2007) The implementation of a strategy not currently being implemented by other firms that facilitates the reduction of costs, the exploitation of market opportunities, and/or the neutralization of competitive threats (Barney, 1991)
Sirmon et al. (2007) When the firm produces greater utility for customers than competitors do, it enjoys a competitive advantage. Because of high environmental uncertainty and varying degrees of environmental munificence, sustaining a competitive advantage over time is unlikely, with the result that a firm instead will seek to develop a series of temporary competitive advantages. (p. 273-274)
Sirmon et al. (2008) Comparative resource advantage:
A comparative advantage in any unique industry-specific skill set embedded in an organization’s human capital can contribute to the positive outcome of
competitive engagements.
Besanko et al. (2012) When a firms earns a higher rate of economic profit than the average rate of economic profit of other firms competing within the same market (p. 295)
28 As mentioned, when a firm reaches a competitive advantage it is (more) successful in the market where it operates. So what is success for a firm and why is the firm successful in that particular market? First of all, this depends on the perspective. When you take the employees for example, most will be content when they get their respective earned pieces of the created value. When the shareholders or owners are taken as perspective they will be content when the created value is reflected in the firm’s performance and thus they appropriate the created value. In smaller firm’s these perspectives might be intertwined as the owner might be one of its few employees or even its only one. In larger firms there will always be a tension between different stakeholders and their power to capture value, as is discussed by Coff (1999). For SME owners success is a complex concept, it relies on many personal and difficult to define factors (Walker and Brown, 2004). However, most firms are established to create value for the owner, so the value represented in firm performance will be the perspective when looking at success of a firm.
29 easily measured, e.g. financial performance. As discussed earlier a firm’s influencing market forces are present to all the competitors. How firms perform and the effect of the firm’s possible competitive advantage can therefore be deduced from a firm’s (financial) performance, considering all competitors receive the same influences from the market. Performance is therefore the main element in the definition of economic profit.
Economic profit:
The performance of a firm, expressed in profit, turnover, and sales
Obviously most firms have very different goals and reasons for why they exist. Especially for smaller firms different goals, often very personal, will lead to their definition of being successful. For example Walker and Brown (2004) discuss several personal success factors for SME owners. So why is this element not present in the current definition of performance? First of all, identifying non-financial and especially personal factors for smaller firms is difficult, as these factors are often unclear (even for the owners themselves) and require a thorough investigation before a firm success can be confidently labeled. Second, most of these personal factors are bound to the owner or small group of owners. This will mean these factors for success will change over time. The ‘mood’ of an owner therefore will influence a firm’s goals and directions. As Walker and Brown (2004) point out personal success factors are important for SME’s. The aim of this research is to make a comparison between similar competitors, thus requiring data which can be compared. Therefore, the emphasis will be on measureable (more financial) elements of the firm performance. However, as the firms need to be similar, their culture and the personal goals and objectives of the owners also need to be analyzed and considered. In chapter 2.4.2 the issue with non-financial and personal success factors is continued.
30 Whether or not resource inimitability and nonsubstitutability actually are antecedents of the sustainability of a competitive advantage is not the aim of this research. The focus is the mentioned first step of the RBV. Authors have questioned the sustainability of a competitive advantage and rather see it as a series of temporary competitive advantages (Sirmon et al., 2007). Therefore the concept will be defined as follows.
Sustainable competitive advantage:
When a firm can maintain a competitive advantage for a certain time period, which is conventional for the particular market and advantage
As discussed by Sirmon et al. (2007), because of high environmental uncertainty and varying degrees of environmental munificence (the scarcity or abundance of critical resources needed by firms operating within an environment), sustaining a competitive advantage over time is unlikely. This argument is represented in the part: when a firm can maintain a competitive advantage for a certain time period of the definition. Conventional for the particular market and advantage highlights the argument that competitive advantages have limited tenability, depending on what kind of advantage and what particular market. As mentioned the focus of this paper lies with the problems with the RBV’s
competitive advantage. So, issues with sustainability will be left for further research.
2.4.2 The Firm, Resources and capabilities
31 property within firms. In larger firms this will be more complex in comparison to SMEs. However, the appropriation of value by employees possessing critical knowledge based assets can be controlled by a firm. Using a resource based perspective the argument can be made that some firms are better at controlling and managing their employees and thus their knowledge. This means they are able to increase their advantages and/or lower this disadvantage resulting in a possible competitive advantage. Of course this is a simplification of reality and is argued by Coff (1999), yet it is serves for this research. So how is the firm defined?
The firm:
A business organization consisting of resources and capabilities that are combined and used for value creating strategies and are aimed at economic profit
As pointed out in the section 2.4.1, some business owners don’t see value creation as solely financial gain. They have personal, non-financial, success factors which they incorporate in their firms. As Walker and Brown (2004) point out these personal success factors do play an important role in SME’s. It is therefore important to consider the impact of these factors on their business strategies, as strategy is the basis for the firm’s operations and structure and thus ownership and control of its resources and capabilities. Therefore, the concept of strategic intent is included in the suggested framework. Hamel and Pralahad (1990: 64-65) see a firm’s strategic intent as the ‘essence of winning’, not simply unfettered ambition to set goals but also the ‘obsession’ to achieve them. In this framework, strategic intent is interpreted differently, as Pralahad and Hamel (1990) focus on major internationally operating firms and their CEO’s, our focus is the SME and its owner. Ambition has a different meaning at the level of a small business owner, personal factors play a much bigger role (Walker and Brown, 2004). Although Rangone (1999: 237-238) introduces the concept of strategic intent in his model, it lacks a clear definition. Therefore, the concept is defined aimed at the SME and small business owner and the influence of personal and non-financial success factors on its strategy.
32 The intent of a firm, which is often influenced by the owner’s personal goals, to follow a strategy which is aimed at specific customer demands and/or revolves around certain strong attributes within the firm
Following the definition of the firm, a next question arises. What are resources and capabilities exactly? As mentioned before there has been a lot of criticism on the all-inclusive resource as used by Barney (1991). Kraaijenbrink et al. (2011) elaborate on these critiques in their article. Although this criticism is important, it is an entirely separately issue beside the tautology of the RBV. However, the definition of the resource will have its influences on this paper’s topic. Since Wernerfelt (1984) the resource has developed thoroughly in RBV research. An important development was the introduction of a distinction between resources and capabilities within a firm. Many authors have adopted this (Amit and Schoemaker, 1993; Rangone, 1999; Newbert, 2007; Sirmon et al., 2007; Sirmon et al., 2008 and many more). All these authors make it clear this distinction is necessary. So what is this distinction between a resource and a capability? Following Amit and Schoemaker (1993) and Sirmon et al. (2008) the definitions are given.
Resources:
Stocks of available factors that are owned or controlled by the firm (Amit and Schoemaker, 1993: 35)
“Resources are converted into final products or services by using a wide range of other firm assets and bonding mechanisms such as technology, management information systems, incentive systems, trust between management and labor, and more. These resources consist, inter alia, of knowhow that can be traded (e.g., patents and licenses), financial or physical assets (e.g., property, plant and equipment), human capital, etc.” (Amit and Schoemaker, 1993: 35) The emphasis is in this definition on the ownership of resources, this is the main difference with capabilities. Where resources can be bought and traded, capabilities cannot, they are developed and are therefore firm specific.
Capabilities:
33 Sirmon et al. (2007) introduce the concept of resource management, which is further developed in Sirmon et al. (2008). The definition for the capability is lent from this perspective. “Resource management is the comprehensive process of structuring a firm’s resource portfolio, bundling the resources to build capabilities, and leveraging those capabilities to realize a competitive advantage.” (Sirmon et al., 2008: 922) Because resource management is a complex process, often path depended, ambiguous and depended on many specific factors, the integrated and bundled resources become firm-specific (Amit and Schoemaker, 1993).
Strategic capabilities:
Capabilities which meet the conditions of value and rareness
This definition follows Barney’s (1991) assumptions about a firm’s resources and competitive advantage. Because the resource and capability are distinguished the assumptions are redefined for the concept capability. When the two conditions of value and rareness are met a capability is of strategic importance and can lead to a competitive advantage for the firm.
2.4.3 The independent variables: Value and Rareness
When looking at the independent variables, these are for Barney’s (1991) RBV: value, rareness, inimitability, and non-substitutability. These resource attributes are necessary to achieve a (sustainable) competitive advantage (Barney, 1991). The framework can be seen in two stages. First, value and rareness lead to a competitive advantage. Second, inimitability and nonsubstitutability lead to a sustainable competitive advantage. When assessing the main RBV literature there are several concepts on the independent variable side which need further discussing. First, the definitions of the independent variables as found in Barney’s work are given and discussed.
Valuable resources:
34 - Exploit opportunities and neutralize threats in a firm’s environment. (Barney, 1991: 106)
As can be seen here Barney defined value in twofold. However, his second statement involving opportunities and threats is not sufficient to be effectively operationalized. There is need for some sort external method or tool to determine value (Priem and Butler, 2001a).
Rare resources:
- The availability of a firm’s resource among competing and potentially competing firms. (Barney, 1991: 106-107)
As mentioned by Priem and Butler (2001a), rarity is not specifically defined but is used in its general sense in Barney’s (1991) article. So which resources have the potential to contribute to a competitive advantage? Barney (1991) uses resource attributes (VRIN) to answer this question. However, his framework is flawed. To solve the tautology, it asks for the redefinition of either or one of the terms causing it (value and competitive advantage). The term competitive advantage has already been discussed, so that leaves the attribute value. Several authors of main RBV literature suggest that value needs to be externally determined (Amit and Schoemaker, 1993; Barney, 2001; Priem and Butler 2001a, 2001b). So how can this be done? According to Porter (1980) every firm within a certain industry or market is subject of different external forces and its success depends on many of those influences. These influences change over time, creating new opportunities and threats for firms. Firms that adjust best to these opportunities and threats become successful. Vasconcellos and Hambrick (1989) discuss in their article the different success factors that can exist in a market or industry. The most important ones are considered the KSF. When the firm’s distinctive competences and strengths match the KSF this leads to success (Vasconcellos and Hambrick, 1989: 367). This relevant relation between the firm and its environment calls for the introduction of the KSF.
Key success factor:
35 In this definition capabilities refer to the firm’s distinctive combinations of resources that form its strength to compete. As mentioned, the requirements differ per market/industry and within these change over time, therefore they need to fit to that market at that time (Vasconcellos and Hambrik, 1989). But what does required stand for in this context? Every market will require certain attributes and capabilities a firm must possess before it can compete for clients. These are known as order qualifying (Kaplinsky and Morris, 2001), firms need to appropriate these as a minimum to compete in a market. When attributes and capabilities are order winning (Kaplinsky and Morris, 2001) a firm can use these capabilities to become successful in its market. Order winning is determined by the scarcity of a particular attribute, when it is scarce a firm can use it to differentiate and become superior to competition. Returning to the KSF, Vasconcellos and Hambrik (1989) identify the KSF in their article for a sample industry. This method of identification will be discussed in the methodology section. So how do the KSF relate to a firm’s resources? In short, the resources that contribute to the competences and strengths (capabilities) that match the KSF are valuable. Some resource might be already valuable on their own, for example the location of a shop, and others might be in combination. In the end, the combination of resources, capabilities, will determine the match a firm will have with the KSF of a particular market. The match of these capabilities with the market’s KSF will determine their value.
Value:
The match of a firm’s capabilities with the demands of the market
Returning to order qualifying and winning attributes, we will assume that for a firm to become truly successful it will need to possess one or more order winning attributes. As mentioned, the difference between order winning and order qualifying KSF lies in the rarity of these attributes. Every firm in a market will possesses some basic set of capabilities to participate, however only the ones that are rare and distinctive will decide if the firm can create a competitive advantage and become successful. Linking this back to Barney (1991) and the definition of strategic capabilities the combination of value and rareness thus will determine a competitive advantage. Value is already defined so that leaves the concept of rareness in that theoretical context, so what is rareness?
36 The availability of a capability among a firm’s competitors
In this definition availability means the abundance or scarcity of a certain capability among firms. If a capability is possessed by many competing firms, and thus abundant, it is order qualifying at best. When a capability is rare or even unique it is order winning and can lead to a competitive advantage.
2.4.4 The suggested framework
All the considered important factors are now discussed and their (re)definitions are given. They are put together and their assumed relations are given in the suggested framework (see figure 6). The framework meets the two requirements mentioned at the beginning of this section. First, value of resources is defined in other terms than the definition of the competitive advantage. Second, value of resources is determined exogenously. This is done by incorporating the KSF for the determination of value and performance as an indicator for competitive advantage.
Figure 6. Framework
37 Factors or KSF. When a firm has capabilities which match the KSF they are valuable. Every firm in a market will have a basic set of (common) capabilities that match the KSF, these are considered order qualifying. When matching capabilities are rare or even unique they are order winning and can be used to outperform competition. However when the capabilities are copied and become available to competitors again they will return to be order qualifying. Therefore capabilities need to consist of attributes both valuable and rare, than the firm can achieve and maintain a competitive advantage. Following Sirmon et al. (2007) there is no ultimate sustainable competitive advantage only a series of temporary competitive advantages. When a firm achieves a competitive advantage this leads to an above-average performance and the firm is thus successful in its market.
3. Methodology
To answer the research question a new framework is proposed. The framework is based on the theoretical assumptions of the earlier discussed RBV literature. Data will need to be collected to see if the framework is a viable adjustment to the RBV. This chapter will provide an explanation for the methodological choices made to do this.
3.1 Data collection
38 3.2 Research design
The case studies consist of carefully selected similar firms within the same market. Three cases are used for the data collection. The different case firms are analyzed for their specific resources, capabilities and performance. These are identified in semi-structured interviews with a manager/owner of the selected firms and using available firm documentation. After the identification, the firm’s specific capabilities will be matched with the KSF. Before the semi-structured interviews with the firms, the KSF are separately identified using a field expert for the particular market. Finally, all three case studies will be compared for their differences and similarities. An overview, giving the steps taken in the research process, is given in the next table (see table 2).
Table 2. Research design
1 Research framework (explorative) Literature reviews
2 Research Sample Selection case firms
3 Testing framework Operationalizing framework variables
4 Identification of the KSF Questionnaire KSF with field expert 5 Identification of firm strategic intent, resources
and capabilities
Semi-structured interview of owner/manager
6 Match firm capabilities with KSF (value) Comparison firm data with KSF 7 Comparison different cases (rareness and
performance)
Analysis of different case results 8 Discussion
3.3 Research sample
39 After analysis of available candidates it was decided to use the firm Houtwerk as a starting point. Houtwerk is situated in Hattem in the Netherlands and operates in the furniture- and interior making industry. Firms in this industry produce anything related to the interior, ranging from kitchens to custom designed furniture. Houtwerk is member of centrale bond van meubelfabrikanten (CBM), this is an organization for firms in the furniture- and interior making industry which safeguards their interests. CBM has 550 members, ranging from interior makers, furniture producers, producers of coffins to many more diverse product areas. This membership gives a good basis for finding similar case firms. Additionally, production and manufacturing firms are suited for this kind of research, as most of their important capabilities assumingly rely on more tangible production processes and resources. Using a list of firms supplied by CBM, multiple similar firms are approached. The supplied list contains firms which operate in the furniture- and interior making industry and serve the private market. Two firms from this list agreed to cooperate with the research, namely; TecMon interieur situated in Werkendam and OpMaat situated in Groningen. Finally, after contacting CBM, Bob Commandeur, the person responsible for market analysis and reporting within the organization, agreed to cooperate and identify the KSF for the particular market.
3.4 Interviews
40 decisions of the firm. The main goal of these interviews is to get to a list of capabilities per firm which can be compared with the (expert) KSF and the other firms. The process of identifying these capabilities is based on Rangone’s (1999) method for SME’s. First, the strategic intent of the firm is discussed; this includes (if available) mission statement, goals, image etc. Second, the important resources and capabilities within the firm are discussed. Third, the final possible strategic capabilities are listed. Fourth, if available the business plan and/or annual report are used to complement the collected data in the interviews. Finally, data is collected to determine the financial performance of the different cases.
3.5 Framework variables
The proposed framework consists of several variables that need to be operationalized; strategic intent, resources, capabilities, strategic capabilities (value/rareness) and competitive advantage (see framework, figure 6; CH 2.4.4).
Strategic intent
41 performance due to this aspect can be detected. The statements are found in the questionnaire used for the firm owners (appendix 7.4).
Table 3. Respondents attitudes towards their business Statement items
1. I feel I am running a successful business
2. Personal satisfaction is more important than making lots of money 3. Having pride in the job is more important than making lots of money 4. I am as ambitious now as when I first started the business
5. Having a flexible lifestyle is more important than making lots of money 6. Giving people a job gives me great personal satisfaction
7. Being my own boss is more important than making lots of money
8. I would like to spend more time with my family but I often have to put the business first 9. As a small business I have a responsibility to the wider community
10. Importance of financial success diminished as the business has become established 11. When I first started the business I was more money orientated than I am now 12. Making money is the most important aspect of owning my own business 13. Financial measures are the only way to measure the success of a business
14. I think of my own business as something that my children can become involved in
*statements are measured using a 5 point Likert scale. Source: Walker and Brown, 2004; 584
Resources
42 Table 4. Categories resources
1 Financial resources Capital, cash, equity, retained earnings
2 Physical assets Physical technology, plant and equipment, geographic location, raw materials 3 Human Resources Employee training, employee experience and skills, employee judgment
(independence in processes) and intelligence (acquaintance and fit with processes), relationships of individual employees
Source: Rangone, 1999; Newbert, 2007: 766
Capabilities
Following Newbert (2007), capabilities are the intangible processes with which the firm exploits resources. This resource management (Sirmon et al., 2007; 2008) will result in certain capabilities that fit the demands of the market. As mentioned before, the distinction between a resources and capabilities is based on firm-specificity (Amit and Schoemaker, 1993). Following Rangone (1999: 236) capabilities are set in three different categories, namely; (1) innovation and development capability: a firm’s ability to develop new products and processes, and achieve superior technological and/or management performance. (2) Production capability: the ability to produce and deliver products to customers, while ensuring competitive priorities, such as quality, flexibility, lead time, cost, dependability, etc. (3) market management capability: a firm’s ability to market and sell its products effectively and efficiently. Using different articles some ‘general’ capabilities are given per category to be used in the interviews (see table 5).
Table 5. Categories capabilities
1 Innovation and development capability
Organizational learning (product, process, management and technology), design, competence in materials
2 Production capability
Organizational culture, quality, flexibility, lead time, cost, dependability, product range, conformity to specifications, know-how (employees, process)
3 Market management capability
Service support, customer loyalty, customer relationship network, brand and brand reputation, customer financing, Relationships with other firms (such as partners, suppliers, buyers, creditors), channels of distribution, market knowledge
43 Strategic capabilities
As seen in the framework strategic capabilities are the capabilities that are the basis for a competitive advantage. The potential of these capabilities to do this is set in their value and rareness. For each case a set of strategic capabilities is identified. To do this the two concepts value en rareness need to be operationalized.
Value
Value is determined by the match of a firm’s capabilities with the demands of the market. As explained in the theoretical section, represent the KSF the demands and requirements of a particular market or industry. So, how will the KSF be identified? Kaplinsky and Morris (2001) discuss that a number of pilot interviews is needed for mapping the demands for a particular market. This is because every market is different and so are the KSF, there is no ‘standard’ set of attributes which form a particular market’s KSF. Exploratory research, often using field experts, is needed to accurately form the list of KSF. After a preliminary analysis of the furniture- and interior making industry, it became clear the production process is the basis for firms to compete. Therefore, Vasconcellos and Hambrick’s (1989: 371) inventory of important attributes in a mature industrial-product sector can be used as a basis for the furniture- and interior making industry. However, in the furniture- and interior making industry most of the products made are custom orders, so market management, like costumer relations and service etc. plays an additional important role. The different categories found in Vasconcellos and Hambrick (1989:371) are used (see table 6). These categories are the basis for the questionnaire send to the field expert. Additional insight by the expert and cases will be all included in the final list of KSF for analysis.
Table 6. Categories for KSF 1. Information and
communication
Image
Technical knowledge of the sales force Marketing knowledge of the sales force Transparency firm
Advertising and promotion Awareness brand/firm name Involvement customer in process
2. Product Product research and development
Service
44
3 Product cost Process research
Firm size
Customer financing 4. Product delivery Distribution
Location of manufacturing facilities Location of sales
5. Production Technical skills of manufacturing workforce Work relations and employee satisfaction Quality control
Technical sophistication of the equipment Production management
Production time Purchasing Outsourcing
Source: Vasconcellos and Hambrick, 1989; 371
When a firm possesses capabilities that can match the KSF they are considered valuable, these are the strategic capabilities. All firms will be able to match the total list of KSF to some degree. This match will be measured per KSF, a KSF can be not identified as key for a case and thus there is no match, a KSF can be a focus and thus matched, or a KSF can be a main focus of a firm. This last option represents the situation where a firm has a clear strategy for their (strategic) capabilities and the KSF are/is aimed to differentiate from competitors. The root for the three levels of the match, the underlying capability or capabilities, will also be identified and linked to the match. Returning to order qualifying and order winning. When there is a match with the KSF value is ensured, however, when all firms have the same match there is no competitive advantage (order qualifying). When the capabilities are also rare (order winning) they lead to a competitive advantage. So how is rareness operationalized?
Rareness
45 Competitive advantage
In this study competitive advantages are indicated by the above average economic profit of firms. Economic profit is defined as: The performance of a firm, expressed in profit, turnover, and sales. The financial indicators in the definition are used to label the firms in three categories; low performer, average performer, and high performer The parameters for the categories will be set based on the report; Rabobank cijfers and trends, meubelindustrie (2012). This report gives an analysis of the furniture- and interior making industry general financial performances of firms based on their size. Having less than ten employees is considered small sized, between ten and hundred employees is considered middle sized and more than hundred employees is considered big (Rabobank cijfers and trends, meubelindustrie, 2012). The general indicators for firm results in the report set the average performer category, when the result of a case firm is considerable lower it is a low performer, when it is higher it is a high performer. The calculations for the categories can be found in appendix 7.3. Firms with a higher performance are assumed to have a certain competitive advantage, where low performers have not.
4. Results
In this section the last steps in the research design, the data collected and different analyses are discussed. First, there is an overview of the furniture- and interior making industry and it’s KSF. Second, the firm related concepts are given in an overview per case. Third, the results of the match with the KSF per firm are listed (value). After that an overview of the availability of the strategic capabilities for the market is given (rareness). Finally the performances are given and compared for the identification of possible competitive advantages.
4.1 The furniture- and interior making industry and its KSF
46 Since 2011 the Dutch economy is officially in recession (CBS economische groei; 2012), this trend has been felt in most parts of the economy, including the furniture- and interior making industry where an average decline in turnover has been reported since 2008 (CBM Markt, 2012; Rabobank cijfers & trends, meubelindustrie, 2013). Interior builders produce goods situated in the premium category, this is because most orders are entirely customized, from design to installment. Premium products are known to be extra susceptible to economic downfall. However, the results per sub segment within the industry are mixed. There is a clear distinction in demand fluctuation between the private and business segment. Where reduced demands were felt by interior builders serving businesses (e.g. shops and offices) in 2008, 2009 and 2010, demand is again growing (CBM Markt Interieurbouw; 2011). Firms serving private customers had a decline in demand in 2011 and 2012 (CBM Markt; 2012). Different parties involved in the research suggest, however, contradictory to negative estimations (CBS overage industrie: meubelindustrie, 2013; Rabobank cijfers & trends, meubelindustrie, 2013), that the first quarter of 2013 shows an increased demand again. Summarizing, the last three years were challenging for most interior builders. Reduced demands and fluctuations in the different market segments resulted in increased uncertainty and most firms are mainly trying to maintain their position and survive the current difficult economic situation.
47 Table 7. KSF furniture- and interior making industry
Private segment Business segment
Information and communication (A) Sales personnel;
1. Personal and attentive approach to customers
2A. Technical expertise (matching personal design demands with practicability)
(B) Transparency (to customer); 1. Explicable cost calculation (C) Sales channel;
1A. Showroom and show models (clean and smooth space) related fairs and shows
(A) Sales personnel;
2B. Technical expertise (fitting architect/designer demands with practicability)
(C) Sales channel; 1B. Established network
Product (D) Customer satisfaction;
1. Final product delivered according to predetermined agreement (price, design and quality)
Production (E) Production time;
1. According to predetermined agreement
(F) Quality control;
1. Materials used are according to predetermined customer demands
Delivery (G) Location;
1. Regional
48 architects/designers wishes can be realized, sometimes they stroke with practical realization and adjustments are required. The ability to do this and still satisfy the customer while tweaking and improving their design ideas is considered important. (B1) Most product costs are based on materials and labor. Therefore clear explanations for these elements are required in the final order invoice. (C1A/C1B) The main difference in the sales channels between the private segment and the business segment is in the ‘shop’ location and/or showroom for the private customers. Customers require examples and personal treatment on location, while serving business clients requires good relations with architects/designers so they get work through that connection. (D1) Customers are satisfied if the predetermined agreements are met, because every product is custom and unique these differ per order. (E1) Production needs to be on schedule according to the agreements made because interior building is often part of a larger project (building of a house/office), deviation from the schedule is considered very bad and harms reputation. (F1) Materials need to be as what was agreed upon, if quality fails to be of standard this can seriously harm the firm’s reputation. (G1) Interior builders mainly play a role in regional projects and markets.
The same list from Vasconcellos and Hambrick (1989:371) is discussed and checked with the interviewees from the different cases, if additional KSF are deemed necessary these will be added after the cases are discussed.
4.2 Cases
In this section the three different cases are discussed. It starts with the firm background followed by an overview of the gathered data. The firms are all active in the furniture- and interior making industry, as discussed before they therefore are assumed to have a lot of common aspects. However, there are always players which are better than others. The interviews are designed to find out where and how firms might differ. The data gathered is collected and represented using the factors in the framework as a basis (see figure 6, Chapter 2.4.4).
4.2.1 Case one: TecMon interieur BV
49 Koopmans started TecMon BV, the name stands for technical montage. Principals made metal/aluminum products (mainly for ships) but relied on other firms to do the installation of them on site. TecMon started with taking on solely this part of the production process. After a while however, clients requested that TecMon would make these products entirely itself. Leo Koopman then started with taking on the ‘whole’ order and started producing custom interior metal/wood work, still mainly for ships. The firm grew from there on to 6/7 people working in its hangar and producing its own custom metal/aluminum products. At the time additional woodwork was done by third parties. In 2007 Leo Koopman asked Benny Vogel, who was working at a woodworking firm to join TecMon. TecMon interieur for woodwork was created, both the metal- and woodwork division work in the same hangar now. What started with 90 percent metal and 10 percent wood orders (mainly for ships), now is around 50/50, so both ‘divisions’ have an equal share. Benny and Leo are now both business partners. Both have a background in work related to shipbuilding. Although TecMon BV is important for the existence of the woodwork division TecMon interieur is the primary aim of the research, if overlap between the parts proves important it will be mentioned. The interviewee representing TecMon interieur is Benny Vogel. At this moment TecMon is considered a small sized firm as it has less than ten employees. Strategic intent
