Abstract: The resource-based view (RBV) is a predominant approach in strategic management to focus how internal and external resources explain business performance. However, it is criticized
on its practicability in the real business context. Kraaijenbrink et al. (2010) developed suggestions for future theorizing and research. These recommendations are used to develop a conceptual model on resources that are categorized by Teece (1997) in processes, positions and paths in order to find out how this is related to performance and growth.Finally this approach is
tested by a qualitative research on ‘Foodist’. Based on the model, an in-depth interview tried to answer how processes, paths and positions influence the performance and growth in a new
business.
Key words: strategic management, resource-based view (RBV), competitive advantage, processes, positions, paths, performance, growth, food-box
How do processes, paths and
positions influence the
performance and growth in a
new venture?
Master Thesis MSc BA Small Business and
Entrepreneurship Thomas Okos (2692236)
Supervisor: A. J. Groen and Olga Belousova Words:13.232 - 15.08.2015
1
Preface
2
Contents
1. Introduction ... 3
2. Literature Review and Theoretical Framework ... 4
2.1 The Resource-Based View (RBV) ... 4
2.1.1 Development of the Resource-Based View ... 4
2.1.2 Critics on the RBV - Ground for future research ... 6
2.2 Processes, positions, and paths ... 8
2.2.1 Processes ... 8
2.2.2 Positions ... 9
2.2.3 Paths ... 10
2.3 Defining and measuring performance ... 11
2.4 Analyzing and measuring business growth ... 13
3. Research/Conceptual Model ... 16
4. Research Methodology ... 17
4.1 Data Sources ... 18
4.2 Data Analysis ... 18
4.3 Reliability and Validity ... 18
5. Analysis, Results and Discussion ... 19
5.1 Market Conditions ... 19
5.2 Foodist – Executive Summary ... 20
3
1. Introduction
The resource-based view (RBV) has become one of the leading theories in the field of strategic management. Over the last decades, the theory about the resource-based view (RBV) shifted from Porter’s five-forces model focused on environmental conditions (Porter, 1980) to an internal perspective on resources of firm’s that are used to create a competitive advantage (Barney, 1991). However, critique on the RBV emerged calling for more research on resources as a viable theory of competitive advantage (Kraaijenbrink et al., 2010).
Until now, there is a lack of case studies that explain how new ventures achieve and sustain a competitive advantage in practice. Therefore, this is a worthwhile studying, because it starts from the current debate on the critiques on the RBV and tries to improve the current status. The objective of the thesis is to advance the knowledge in this field and contribute to the current debate on RBV. The purpose of this research is to provide a link between the current on the RBV. Therefore, a quantitative in-depth analysis of the performance and growth of a new ventures resulting from its resources, by answering the research question:
How do processes, paths and positions influence the performance and growth in a new venture?
Based on this research question, this paper will accurately define and demarcate relevant resources, use a firm-specific view on the RBV, and finally measure the impact on performance. This approach will be conducted on a case-study on a small business, namely ‘Foodist’, to indicate how resources within Foodist’s processes, positions and paths lead to high performance and rapid growth. In order to do that, an in-depth interview provide clear results on sales and employment. In sum, this paper provides an original analytical approach to the identification of firm-specific resources to achieve a high performance and growth. In answering the research question, the study helps to indicate how the RBV can be used in a more analytical and practical way.
4 research and indicates limitations and implications for future research. Finally, the appendix delivers further information about the construct of the interview.
2. Literature Review and Theoretical Framework
2.1 The Resource-Based View (RBV)2.1.1 Development of the Resource-Based View
In the past, literature highlighted several ways to analyze how firms achieve high performance based on external and internal business conditions. Over the last decades, the resource-based view (RBV) has become one of the most dominant theories in management theorizing by explaining resources and capabilities firms may use to perform successfully. Especially in some industries it is essential to gain a sustainable competitive advantage by the right use of heterogeneous and immobile resources to succeed in the market (Bain, 1956; Kay, 1994; Porter, 1980). Firms need to acquire and control valuable, rare, inimitable, and non-substitutable (VRIN) resources and capabilities, by applying them correctly (Barney, 1991). This approach is shared by many researchers in their analysis of firms’ core competences and capabilities to be successful within their market. In the beginning, research about strategic management was focused on isolating firms’ opportunities and threats, describing environmental conditions (Porter, 1980), or just on the pure description of strengths and weaknesses (Hofer & Schendel, 1978; Penrose, 1958; Stinchcombe, 1965). Later, researchers put forward the theory to internal factors, showing that firms need to use own resources to create a sustained competitive advantage (Barney, 1991). Therefore, the following analysis provides a chronological framework to explain how the RBV developed in the last decades and how it is criticized in recent time. Finally, these findings provide the basis for the analysis of this research.
6 on historical circumstances, or social complexity (Besanko et al., 2010). Yet, the RBV has also been criticized for many weaknesses that are discussed in the next section.
2.1.2 Critics on the RBV - Ground for future research
Over the last 20 years, the RBV has also been subjected to considerable criticism. Kraaijenbrink et al. (2010) summarized, reviewed and assessed the principal critiques of the RBV. They categorized the critiques into eight categories: 1. RBV has no managerial implications; 2. RBV implies infinite regress; 3. RBV’s applicability is too limited; 4. Sustainable competitive advantage (SCA) is not achievable; 5. RBV is not a theory of the firm; 6. VRIN/O is neither necessary nor sufficient for SCA; 7. The value of a resource is too indeterminate to provide for a useful theory; 8. The definition of resource is unworkable. Based on this assessment of critiques related to the RBV, it helps to prepare the ground for future theorizing and research in this field. In fact, Kraaijenbrink et al. (2010) argue that the first five categories do not really threaten the RBV’s status, as long as variables, boundaries, and applicability are specified and applied carefully. However, the later three critiques cannot be easily dismissed and call for further research, because they concern the indeterminate nature of the RBV – resource and value – and the narrow explanation of firms’ SCA that is discussed in the next three paragraphs. In sum, the authors suggest to develop the RBV into a more viable theory of competitive advantage by moving it into a genuinely dynamic framework (Kraaijenbrink et al., 2010). Due to the authors’ criticism, the construct of RBV is rather vague in the importance of human involvement, definition of bundled resources and in assessing and creating value. Therefore, these fundamentals need to be reconsidered. Kraaijenbrink et al. (2010) offer three main suggestions for future theorizing and research to take the discourse of RBV forward:
(1) Demarcating and Defining Resources
7
(2) Toward a Subjective and Firm-Specific Notion of Resource Value
Resources are not simply objective and universal elements that create performance and that just need to be adapted by any business; instead resources arise by the influence of individuals or entrepreneurs that create value by convincing others of the value of their products. Therefore, human imagination needs to be considered in the center of RBV, for instance how value assessment processes are investigated to create and capture value. Further, how humans’ ideas revolutionary the modes of a firms’ value creation. Rather than focusing on the abstract objective value of the resources, theory should focus on actions associated with resources.
(3) The RBV as a Theory of Sustained Competitive Advantage
Nevertheless, it is important to explain how the resources relate to performance. Therefore, future research should take into consideration the context and processes of resource deployment in order to benefit from the resources. Therefore, resources need to be distinguished in its different types to assess their value adequately. Rather than using one single concept of resources, the full context is useful in order to understand the complex value creation of a firm. Due to that, both levels are necessary to understand firm performance, the component-level and the organizational-level resources. To detect how appropriate a business is managing both levels it becomes interesting to probe how new resources are matched and integrated with the resources already in place. Also, the context between the firm and the market relates to that link.
In sum, Kraaijenbrink et al. (2010) offer future directions for research and theorizing in the field of RBV. Basically, they suggest to move the RBV into a more viable theory of competitive advantage that is fully contextualized and managerially relevant. They recommend that the RBV should be transferred into an inherently dynamic and subjectivist framework.
8 paradigm, firm performance was determinate outside the firm in its industrial structure (Kraaijenbrink et al., 2010). In fact, it is important to mention that the RBV model did not replace the IO view; it complemented it (Barney, 2002; Mahoney and Pandian, 1992; Peteraf & Barney, 2003; Amit & Schoemaker, 1993; Priem and Butler, 2001). Therefore, the findings in Kraaijenbrink et al. (2010) should be implemented into a framework to analyze more firm-specific resources. Constitutive to the Teece’s (1997) research on RBV, the next sextion will provide an approach that is linked to the suggestions of Kraaijenbrink et al. (2010).
2.2 Processes, positions, and paths
Based on the fast-growing development and competitive battles in some industries and markets, Teece (1997) argued that the RBV paradigm needs to be expanded to understand how competitive advantage is achieved. This is referred to as ‘dynamic capabilities approach’. The approach is expanded in two ways. First, the term “dynamic” stresses the capacity of a firm to renew its competences in line with changing business environments. Also, the term “capabilities” reflects the role in appropriately adapting, integrating and reconfiguring internal and external organizational skills, resources, and functional competences to react on the changing environment. Teece (1997) argued that the “competitive advantage of businesses lies with its managerial and organizational processes, shaped by its (specific) asset position, and the paths available to it” (p.518). These three elements – processes, positions, and paths – contain firm specific elements helping to elaborate on resources that new businesses possess to achieve a sustainable competitive advantage. However, the term ‘sustainable competitive advantage’ is changed by ‘performance’ to have a more measurable definition (Kraaijenbrink et al., 2010).
2.2.1 Processes
9 First, there is ‘coordination/integration’ of activities inside the firm. Researchers agree that the efficient and effective coordination and integration of activities inside the firm is very important (Aoki, 1990). Likewise, the external coordination is of same importance. Several researchers and analysis through different types of industries prove that entrepreneurs need to coordinate internal and external conditions well and try to achieve efficient routines within firm’s to achieve quality performance (Garvin, 1988; Fujimoto, 1991). These routines relate to the use of information, customer experiences, design choices, or the coordination of suppliers (Garvin, 1994). In sum, a firm’s coordination and integration of internal and external routines may determine variables as costs, time and quality.
Second, ‘learning’ is a process by which experimentation and repetition enable a better and quicker performance of tasks. Further, it enables the identification of new production opportunities (Levitt and March, 1988). A key characteristic of the learning process is the fact that learning involves organizational as well as individual skills. Therefore, it can not only occur individually through imitation, but also collectively by common communication and coordination of procedures. Another characteristic is the development of ‘routines’ within the organization by adding new knowledge or activities gathered in group behavior. This way of inter-organizational learning or collaborations and partnerships can be a vehicle for new organizational learning to improve routines and processes (Mody, 1993).
Third, ‘reconfiguration and transformation’ in processes is needed in rapidly changing environments by reconfiguring firms’ asset structure, and to accomplish the necessary internal and external transformation (Amit and Schoemaker, 1993). Constant monitoring of markets and technologies is required with the willingness to adopt new practices. These changes might be costly; therefore, firms must develop processes to limit the costs for changes. Firms need the ability to evaluate the competition by markets and competitors.
2.2.2 Positions
10 produce and deliver new products and services. Prior activities enable businesses to build such complementarities for firms established activities, while new assets can either destroy or enhance the business success. Third, ‘financial assets’, relate to a firm’s financial position and degree of leverage that may have strategic implications. Liquid conditions have a huge impact on business development, while money raised from external may implicate considerable information to potential investors. Fourth, reputational assets summarize information about a firm and its responses of customers, suppliers, and competitors. It is an intangible asset that enables businesses to gain various goals in the market. The main value is external and summarizes the current value of assets and positions, and its possible behavior in the future. Often, there is an imbalance of inside and outside knowledge. Therefore, businesses need to beware that the external actors respond positively by what they know. Fifth, ‘structural assets’ mean the formal and informal structure of firms and their external links influence the rate and direction of innovation, and how competences and capabilities co-evolve (Argyres, 1995). This relates to the degree of hierarchy and the vertical and horizontal integration of a firm-specific structure. Distinctive governance modes, as “multiproduct, integrated firms”, “high flex firms” or “virtual corporation” support or hinder firms positions. Sixth, ‘institutional assets’, refers to the environmental conditions outside the business and the market. They refer to public policy covering what firms can do in the framework of laws. Therefore, there is a need of different firm specific assets in business activities in other regions or areas with other institutional/policy settings. Seventh, ‘market (structure) assets’ describe that product market position matters, but it is often overplayed as a fundamental position of a firm in its external environment. Part of the problem is related to the definition of the market in which a business competes. Therefore, firms strategy should be rooted in its own competences and capabilities shaped by positions and paths. Eighth, ‘organizational boundaries’ determine the location of firm boundaries and the degree of integration (vertical and horizontal).
2.2.3 Paths
11 past to offer chances in the future. Therefore it does not define choices that are open today, but also the internal possibilities in the future.
(1) ‘Path dependencies’ result from the current position and the paths ahead. The current position is shaped by the path it has traveled, because firm’s previous investments and accepted routines constrain its future behavior (Bercovitz et al., 1996). Therefore, learning is related to previous activities as a process of trial, feedback, and evaluation. However, if too many factors are simultaneously changed, this attenuates the performance of firm’s routines, because business activities cannot be ascertained. In contrast, the importance of path dependencies is preferable where increasing returns to adoption exist. Increasing returns to adaption can result for instance from network externalities (Katz and Shapiro, 1985), complementary assets, supporting infrastructure (Nelson, 1996), and scale economies in production and distribution.
(2) ‘Technological opportunities’ are a concept given forward meaning after the consideration of path dependencies. How far and how fast a business activity can precede lies in activities and opportunities taken in previous paths. The technological opportunities may not be completely exogenous to industry, but are often fed by firm’s own innovative activity. Therefore, the opportunity can be quite firm-specific that other firm’s are not able to detect.
In sum, firm-specific competences and capabilities are presented as being located in its organizational processes, firms’ assets in positions and in its evolutionary path. The performance of a firm is determined by these three items and by its ability to reconfigure and transform them. The following section discusses options how to measure performance and what can result from good performance.
2.3 Defining and measuring performance
Generally, there are two different ways to measure performance in new ventures – either objective or subjective (Storey and Greene, 2010). Both approaches deliver useful data to evaluate the performance of new ventures. However, it is important to discuss advantages and disadvantages of both ways and discuss the different measurements in more detail.
12 all size of business is the return of investment (ROI) or return of assets (ROA) (Aragón and Sánchez, 2005). It is the most common profitability ratio that can be determined in multiple ways - most frequently, net profit is divided by total assets. Additionally, also labor productivity is a legitimate way to measure performance adequately. Masurel and Van Montfort (2006) expressed that labor productivity of a firm will increase in the beginning and decrease in the last stage if its existence - by calculating total sales divided by total labor forces. Another measurement is growth that is covered as a variable in the next part of this section, because growth shows the strongest correlation to performance in contrast to other performance dimensions (Santos and Brito, 2012).
However, the pitfalls of objective performance measures are clearly highlighted by several researchers (Walker and Brown, 2004; Masurel and van Montfort, 2006). Research in this field agrees commonly on measurements that cannot be easily measured or compared with each other. First, owner motivation is not taken into consideration. This is a key difference for entrepreneurs who choose a new venture over working in a large business for non-pecuniary incentives as individual fulfillment, independence, and experience (Gray, 2002; Hart and Oulton, 1996). Especially in contrast to large businesses, the smaller the business the more diverse the performance, because of the greater diversity of owner motivation (Storey and Greene, 2010, p.8). Second, there are differences in calculations between business profits and entrepreneurial income. Third, the interpretation of costs is unclear, because small firms might use different systems of depreciation.
Referring to the subjective performance measures multiple ways can be used depending on industrial-, market- or entrepreneurial characteristics. Typical subjective measurements may be self-rated performance compared to competitors (Aragón and Sanchez, 2005) or owner’s individual satisfaction with outcomes in comparison to the effort or motivation of the entrepreneur (Hagen et al., 2012).
However, by expressing all this subjective measurement, there are clear pitfalls in measuring the performance of small businesses subjectively. Most obviously, whatever data is received on subjective measurements, a comparison to other firms may be difficult. Due to that, data may be also difficult to gather, because entrepreneurs may not be willing to share information or over-interpretate the performance. Especially potential biases of respondents have a huge impact on the different results in how successful a new venture operates (Brinckmann et al., 2010).
13 that ROI as performance measure does not yield significant results, but the subjective measure (‘overall performance’) does. However, Hagen et al. (2012) argue to use a combination of subjective and objective measures to gain a complete picture, by evaluating both types to measure performance.
2.4 Analyzing and measuring business growth
Good performance and profitability can lead to business growth, if the entrepreneurial team is willing and able to force growth (Storey and Greene, 2010). It is important for the success of new ventures since some researchers indicate growth “as the very essence of entrepreneurship” (Sexton, 1997, p.97). However, growth can be defined in multiple ways. Therefore, this section on growth is concerned with what is meant by growth and how it can be measured. The section is limited to a business view and does not cover further explanations for economic prosperity from a macro-economic perspective.
Storey and Greene (2010) highlighted eight possibilities to measure business growth, namely sales/revenue, profits, financial ratios, income of entrepreneurs, market share, employment, subjective measures (e.g. owner satisfaction), and multiple measures of growth. In fact, for several advantages and disadvantages exist for each of these measurements to analyze growth. However, reviews of business growth studies concluded that the most commonly used measurements by researchers are sales and then employment (Murphy et al., 1996; Weinzimmer et al., 1998; Wiklund and Shepard, 2005). Both measurements provide an easy access to data and entrepreneurs are also likely to use these numbers to assess performance and growth (Barkham et. al, 1996). In many cases there is often a correlation between sales end employment growth (Storey and Greene, 2010). Yet, they are not interchangeable measures of new ventures growth. Thus, they are related, but still independent constructs that react diversely to multiple different criteria (Chandler et al., 2009). Therefore, these two types of growth measurements need to be discussed a bit more on assets and drawbacks.
Sales
14 measurement of sales is also necessary for other means of growth (e.g. employment). On the contrary, price changes for the product or inflation over time make comparison difficult. Especially, entrepreneurs might withhold data because they believe it is necessary to hold their strategy confidential. Next, there might be biases by entrepreneurs by over-estimating or forgetting real numbers. Moreover, in some businesses it takes years after products might enter the market and sales and profits can be generated, e.g. in biotechnology or medical products. Finally, data on sales are often open to interpretation, because the kind of financial ratio, ROA or equity might vary.
Employment
Employment is also easy to measure, because the data is relatively easy to obtain and also comparable in the short-term and in long-term. It is mostly used by researchers and by policy makers, to indicate success or decline of a venture. It is an important resource indication, because especially new ventures hire more employees as a reaction on increasing duties and it gives an indication of the resources of a firm. In the end, it is less biased and more objective, also because entrepreneurs do not see it as confidential information. On the other hand, business owners often does not see increases in employment as a growth measure or do not strive for that goal (Wiklund, 1998; Robson and Bennett, 2000). Especially, the number of employees cannot cover the total number of human resources that is involved in a process, because a firm may outsource employment (Delmar et al., 2003). In the end, the number of employees may vary widely across industries, because some businesses are more labor intensive than others.
15 Wiklund and Shepard (2003) argue to highlight subjective measures for performance and growth, because these factors highlight the real objectives of entrepreneurs. Nevertheless, subjective intentions of entrepreneurs may also vary from the objective outcomes of a new business (Chandler and Hanks, 1993).
A second difficulty about the measurement of any growth is the criteria how to measure growth. According to Storey and Greene (2010) there are four main ways: First, annualized growth compares data on a year-to-year variation. Second, absolute growth is obtained by measuring actual increase in the number of sales or employees. Third, relative growth measures percentage changes to any time span. Fourth, log transform growth measure, e.g. “transform the data so that it growth is ‘normally’ distributed across the business population” (p.213). Advantages and disadvantages for all four ways can be discussed and due to Storey and Greene (2010) small-sized businesses tend to favor relative measures. However, to prevent different measurements, Almus (2002) argues that it is more appropriate to combine absolute and relative measures to limit the biases by using only one way.
Putting together both criteria, it is an accepted approach in the literature to use sales and employment as measurements and to analyze absolute and relative growth in the same way as several researchers illustrate (Delmar et al., 2003), because the implication is decisive to understand fast growth. Referring to small businesses, the results of the growth measurements indicate if the businesses are fast-growth businesses, called gazelles, or only contributing marginally, named mice (Birch et al., 1995). Overall there is no consistently accepted way of fast growth measuring. Thus, the OECD defined very precise that fast growth businesses are measured by an increase in the number of employees (or turnover) of at least 20% per year. This should be measured over three-years - starting with at least 10 employees at the beginning of the observation period (OECD, 2008, p.18).
16 Parker et al., 2010). Fourth, younger and smaller businesses grow faster than older and larger businesses (Dunne and Hughes, 1994; Almus, 2000; Lotti et al., 2003).
Referring the discussion about growth back to the resource-based view (RBV), this approach offers reasons why some businesses grow faster than others. It was argued that growth arises if businesses use its resources and capabilities in a unique and hard to imitate way. Reflecting the resource-based view on growth, a discussion on several advantages and disadvantages is useful to discuss if this approach is really a to explain business growth. On the one hand, as elaborated earlier in this literature review, the RBV has a greater focus on internal resources of firms, rather than on external conditions (Rumelt, 1991; Barney 1991). Therefore, firm’s own business strategy is more important than their external environment, because a business is a bundle of resources with firm specific resources that are heterogeneous, immobile, and path dependent. This stresses that growth is not an automatic and constant process, but rather an the outcome of a successful use of one’s own capabilities. Further, firms with unique resources are likely to be more successful than other firms and growth variance relates to VRIN attributes of resources, while other firms cannot use similar resources successfully. Additionally, the RBV identifies the importance of non-tangible resources (e.g. business strategy or capacity) firms’ might use better and can growth if they manage to use this in a more appropriate way. Finally, the RBV explains how businesses learn and explain the different processes, paths and positions that lead to growth. On the other hand, the RBV seems to be more applicable to large business strategic management practices than small entrepreneurial businesses (Storey and Green, 2010, p.240). Additionally, the RBV seems not applicable in practice, because the question arises how researchers are able to indicate success factors while competitors are not able to do it. Moreover, it is unclear if tangible or intangible assets are more important for growth following the RBV. Finally, there is also a problem with the tautological problem, e.g. a learning business is successful because it is learning (Storey and Green, 2010, p.240).
3. Research/Conceptual Model
17 identifies in a systematical way the conditions that are necessary for a new venture to perform succeed in the market.
Chart 1 – Conceptual Model
The variables presented in the conceptual model highlight certain elements that were discussed in the previous section. Processes, positions and paths were used by Teece (1997) to illustrate three categories of resources that lead to a sustainable competitive advantage. However, due to the critique on RBV, e.g. by Kraaijenbrink et al. (2010), the RBV should move to a more firm-specific approach. Therefore the independent variables ‘processes, positions and paths’ were related to performance and growth arriving from firm-specific resources. The variables were discussed in detail in the literature review. The conceptual model detect what kind of resources are particular important for the performance of a firm by using the data provided by an entrepreneur describing the firm-specific resources. Finally, the interview guide (appendix) was developed around this conceptual model and previous definitions of the variables.
4. Research Methodology
18
4.1 Data Sources
In order to answer the research question, qualitative data is used in form of an extensive interview with a new venture in the food-box market in Germany. The questions of the interview guide were formulated in line with the interview guidelines by Emans (2004). The questions can be found in the appendix and were formulated according to the findings within the literature. Therefore, questions were organized parallel to the conceptual model. Finally, the questions were translated to German, the native language of the interviewee, to make sure that the quality of the answers is on a high level. Two interviews were conducted by telephone calls, one in May 2014 and one in August 2015. Further information about recent changes or the latest data on the performance were delivered online.
4.2 Data Analysis
Initially, a literature review was conducted to gain an accurate understanding of firm-specific recourses. The variables used in the conceptual model identify conditions that lead to a higher performance in new ventures. The questions during the interview were based on the variables based on the findings in the current literature. The results of the interview were compared with the current research level to analyze similarities and differences among theory and practice. Finally, the paper analyzed how the theory was applicable in the practical case and in how far these findings are relevant for generalization in the fields of entrepreneurship.
4.3 Reliability and Validity
19 since 2013. All questions were asked in a formal and neutral way to not bias the interviewee in any way. Additionally, products and services were tested previously and anonymously to get a first impression of the business and to acquire a first insight into quality of the product and its processes. This research does not provide empirical results to test the conceptual model, but it compares the existing literature with the practical experience in a new venture. Further reliability is given by official information shared to investors in three crowdfunding rounds. Foodist is obliged to release and provide real numbers to its investors. Differently to other small businesses that are less willing to provide information, Foodist offers a seldom valid insight into the relation of resources to the performance. However further interviews with employees, suppliers, consumers, and buyers are advisable to prove the answers. Additionally, it would be helpful to spend a few weeks in each of these firms to analyze the daily strategic organization in more depth.
5. Analysis, Results and Discussion
This section presets the collected data from the interviews, documents and observations in line with the conceptual model in order to answer the research question:
How do processes, paths and positions influence the performance and growth in a new venture?
Due to the fact that this research is based on quantitative data, findings are presented in line to previous research. Throughout the analysis, certain elements of data are documented through tables and graphs to illustrate differences and developments of a firm in a more readable way. Before, starting with the analysis structured parallel to the theoretical framework, a short description of the industry is given to provide background knowledge about external condition and to introduce into the market.
20 Germany is known for its competitive market in the food segments. Further, many new start-ups emerged in the urbanized cities of Germany gaining increasing profits in this industry. In recent time, also food boxes are an emergent market in the German food market (McKinsey&Company, 2014). Several start-ups emerged in the last few years competing with different strategies in the food-box market. These new ventures use, for instance, crowdfunding campaigns or venture capital to succeed in the market. However, also some firms, e.g. ‘FoodieSquare’ went bankrupt with its ‘Tasty Box’ three years after it was founded in 2011. Although, the firm gained 500,000€ venture capital in the previous two years, it failed caused by a drawback of an investor (Skrabania, 2014). Therefore, it is interesting to analyze how resources are used by Foodist to succeed in the market.
5.2 Foodist – Executive Summary
Every month, Foodist delivers food-boxes with a selection of 6 to 8 exclusive gourmet products from different small European manufacturers. The business was founded in 2012 and Foodist is already the German market leader in the market of food box subscriptions with over 14,000 subscribers in total. The products are
21 5.3.1 Processes
Processes are highlighted in the framework as one of three areas of a firm that explain resources, linked to ‘coordination and integration’, ‘learning’ and ‘reconfiguration and transformation’ within the managerial and organizational process and routines. Each of these three elements is analyzed separately in the case of Foodist:
Coordination/Integration
Foodist flagship and starting business product is the food box with six to eight products delivered monthly to its customers. The processes by distributing the boxes are coordinated very efficiently and have several advantages for firm’s routines. Subscribers receive a food box with new delicacies the 15th of each month, while consumers can cancel the subscription two weeks before. Therefore, Foodist acts flexibly related to the demand of the product, because it knows how many products are needed from the supplier, without any oversupply. The products are delivered just-in-time; therefore Foodist has the money from the customer before they need to pay the products to the supplier. This is an example for the efficient and effective coordination of activities inside and outside the firm (Aoki, 1990), because the processes are optimized for suppliers, customers and for the business itself. Furthermore, conditions with the supplier are individually negotiated with each supplier. The manufacturers offer a discount very often to use the advertising impact of Foodist, while the profit margin is constantly between 30-50%. The capacity to increase is fulfilled and preparations for expansion are already available, for instance, the logistic process is resilient for 60.000 supplies. In sum, the subscription model is predictable and process oriented which allows a constant strategy for the next box.
Learning
Foodist provides examples for individual and for organizational learning. In general, each employee is responsible for a specific task, e.g. marketing, accounting, therefore processes are optimized within in terms of better and quicker performance (Levitt and March, 1988). Moreover, they use different forms to discuss the processes regularly in different group combinations to use individual know-how to improve routines and processes (Mody, 1993).
22 Referring to the unique selling proposition and competition, Foodist wants to retain its competitive position in long-term and therefore it needs to constantly improve products and processes. As the first nationwide provider of gourmet subscription boxes in Germany, they had first-mover advantage. Based on this experience with their original food-box, Foodist created another box, named ‘Foodist Healthy Box’, and transforms it processes to further segments. Foodist indicated the healthy/athletic target group as a growing market and used their previous knowledge to create a second box starting in July 2015. However, in order to achieve most efficient use of the office and the warehouse capacities, this box is shipped on the first day of each month instead of the 15th. Processes are basically transformed; just the targeting is different to catch new customers as indicated in the comparison of both boxes in Table 1. The new target group is younger, more urbanized and more attached to lifestyle products on a healthy level.
Variable Classic Food Box Healthy Box
Price € 24 € 26,90
Number of quality products
6 - 8 6 - 8
Shipping 15th every month 1st every month
Subscription monthly monthly
Gender buying boxes 56% female – 44% male 64% female – 36% male
Target group (age) 30 – 50 years 20 – 35 years
Educational attainment High educational attainment Medium to high educational attainment
Living area Rural or urban location Urban location
Starting period 2012 July 2015
Table 1 – Comparison: Food Box and Healthy Box
In sum, the processes highlight the backbone of Foodist. Foodist started with the single concept of food-boxes, but within three years they expanded their distribution to three constitutive channels which is presented in Chart 2. Foodist profits from the three channels that are related to their good use of resources within their processes.
23 about the taste and preferences of its consumers. Thereby, Foodist can negotiate with the suppliers to continue the selling their products in the Foodist delicacy online shop. This targets costumers that wanted to reorder individual products again. Customers can create their individualized boxes or simply reorder certain products. Each month, € 20,000 individual products are reordered from the online store.
Nevertheless, out of the information gathered from the 2,000 feedbacks and the sales figures online they created another distribution channel. The third pillar that was started on a trial basis in 2014 by selling the most demanded products in retail stores in Germany. These products come into the market, if the evaluation of consumer responses on the basis of the feedback was successful and if the amount of sales in the online-shop provides promising returns for retail stores as well. Foodist managed over 100 acquisitions of supermarkets within the last nine months. The best products from the boxes are selected to sell in supermarkets, shops, hotels, and restaurants. Averagely, retailers order goods worth €300-400 per branch. Until now, 50 products are placed through this channel. Foodist holds a strong position, because they secure exclusive rights to the distribution of all products in Germany. In May, they delivered 14,000 products to more than 100 different stores.
Chart 2: Development of three constitutive distribution channels
Especially, this third pillar to sell products in ‘retail stores’ is developed out of the previous processes by selling the products in food-boxes and online. The retail sale is a new target in the strategy of Foodist and shows increasing performance by the growth of net sales in retail stores (Chart 3) and the total number of delivered stores in the 2nd quarter of 2015 (Chart 5).
24 Chart 3: Net sales in retail stores Chart 4: Number of stores
5.3.2 Positions
Foodist position is related to manufactures in Europe that offer high-quality products but lack in capabilities to expand to new markets. Often suppliers do not have the resources or know-how to enter markets outside their business area. Therefore, their brands are not well known for customers in other business areas. To close that gap, Foodist put information inside the foot-box about special characteristics of the groceries and provides background stories about the manufacturers. Further, Foodist uses its online blog to visualize the characters behind the manufacturers in interviews explaining their products.
Foodist position is strongly related to specific assets that are combined together. Teece (1997) identified eight classes to illustrate the assets, which are used in the following to show why competitors cannot copy Foodist position and why its suppliers are willing to cooperate:
(1) Technological assets
Referring to the technological assets of Foodist, there are not many possibilities to protect their intellectual property or know-how, because of their business philosophy to share information. However, Foodist profits from the feedback and get constantly information about products that competitors do not have.
(2) Complementary assets
Mar Apr May Dec (plan) net sales € 9.000 € 17.00 € 30.00 € 60.00 € 0 € 10.000 € 20.000 € 30.000 € 40.000 € 50.000 € 60.000 € 70.000
Net sales in retail stores
March April Mai stores 38 78 135 0 20 40 60 80 100 120 140 160
25 Foodist uses a variety of products, e.g. spices, oils, etc., often handmade by the small manufacturers. Undoubtedly, there is the risk that one of the 6-8 products delivered to the subscribers could not fit with the personal taste. Thus, they have no effective mechanisms to select the products by an extensive research, but they do it in a subjective way within the firm. Every employee can taste potential products. If the taste is ‘confirmed’ by the majority of the employees, Foodist will check the feasibility of the manufacturer to deliver the acquired number of products. Therefore, new assets cannot destroy the business success (Teece, 1997). Another problem is the dependency on suppliers if they can deliver the products in time. Surprisingly there was never lateness until now. If that would happen in future, they are still flexible, because they promise a flexible amount of products to the customers.
(3) Financial assets
The main financial asset is provided through crowdfunding campaigns on ‘companisto.de’. These rounds provide enough financial liquidity to strengthen its position in the market. Consequently, rapid growth emerged after the three crowdfunding rounds. Table 2 provides information how rapidly the valuation of Foodist increased and how crowdfunding improved the financial situation.
Round 1 May 2013 Round 2 March 2014 Round 3 April 2015 Valuation of Foodist 1,100,000 € 2,000,000 € 5,500,000 € Participation Rate
for each € 5 invested
0.0003922 0.0002 % 0.0000769 %
Invested in total 175,000 € 295,200 € 1,000,000 €
Number of Investors 564 874 966
Table 2 – Overview of the crowdfunding rounds
Foodist launched further equity crowdfunding campaigns because they identified opportunities for further growth and had a vision to strengthen the future of Foodist. Thus, they know the disadvantages of these mass investment campaigns and the obligation to share sensitive information. However, they see the opportunity in the interaction with people believing in the firm by having constant interaction with potential customers.
26 Foodist profits from its first-mover advantage. This reputation is a strong resource to provide a strong position in the market and strong business relations to its customers, suppliers, and competitors. Customers benefit from the selection of tasty and quality products – the subscribers are averagely bounded for more than 11 food boxes. Suppliers know the strong position of Foodist and try to convince them with their products, because suppliers want to use the high reputational standard of Foodist to benefit from the position, too. Competitors, as Hellofresh, an online-food delivery service, are cooperating with Foodist – both offer vouchers for their products in the box of the other, because the target group correspondent with each other. This highlights the argumentation, for instance by Brandenburger and Nalebuff (1996), that even interaction among rivalries can enhance profits by promotion.
(5) Structural assets
The structure of the firm is very informal. Thus, each employee is responsible for a certain business field, e.g. marketing or accounting, however important activities are discussed through all ‘departments’.
(6) Institutional assets
Currently, institutional assets are less important for Foodist, because Foodist use only suppliers in the European market. The laws of the European Union try to harmonize the European market; therefore less activity is needed to strive for negotiations about business barriers. At the same time, Foodist used this harmonized market conditions to bring products from the whole European market together to form their gourmet boxes and selling them online or in retail stores.
(7) Market (structure) assets
Products in the Foodist Box are not yet easily available in Germany, so they are exclusively available for Foodist customers. Further, Foodist, plan to focus on new business segments for which new capital is needed. Especially, the new third pillar of selling Foodist products in retail shopes needs to be expanded. Also, the first pillar, the food boxes expanded already, after they launched on 1 June 2015 a new subscription box, the Foodist Healthy Box.
27 Foodist boundaries are well defined. As already described previously, the distribute products from manufacturers across Europe. The contract with Foodist forbids the suppliers to sell their products for 6-12 months to other firms competing in the same markets.
5.3.3 Paths
Path dependencies
The idea of Foodist is assembled by the previous experiences, know-how and interests of the three founders who are also interest in delicious cooking and businesses. Ole and Alexander where fellow students during their dual study program in Business Administration. Parallel, while Ole received some experiences about e-commerce, Alexander had his first job experiences in the food trade industry. Andreas worked with many manufacturers in the past and realized that the internet was used very rarely as a distribution channel. The team benefit from the complementary composition. Ole and Alexander combined university knowledge with fresh ideas from industries where they worked parallel, while Andreas was already successful with previous start-ups he just sold and was ready for a new venture. He is also responsible for the product selection, because he has the longest experience in the executive position of firms and he has a compact network to multiple manufacturers due to his 30-years work experience in the food industry. They wonder why median food was commercialized by good advertising, whereas high-quality products are just lack in good marketing and chances to get tested by a higher amount of customers. Therefore, Foodist realized to offer new distribution channels for manufacturers and higher chances for customers to experience different high-quality food products. The strategic concept was inspired by ‘Glossybox’, where customers get monthly a box with beauty articles. Still, until now, as it was from the beginning, the human resource strategy on Foodist is based on complementary experiences, differences in the age structure and a clear distinction of competences. In sum, the path dependency was strongly related to the experiences of the founders.
Technological opportunities
28 processes in the areas of purchasing, warehouse, sales and accounting. The new logistic process on 2000m² is able to ship up to 50,000 boxes per month. In sum, they shaped the path for furture grow.
To sum, Foodist provide strong resources in their processes, positions and paths. The unique selling position at the product level is determined by the exclusiveness of the products. While competitors use industrial products by known brands as Lindt chocolate for their boxes, Foodist uses its own resources to scout products from different exclusive suppliers around Europe. Every year 2,500 products are tested on a subjective level, and finally 80 products make it to the boxes. Until now, approximately 300 producers have become Foodist partners; this number is still growing monthly. Therefore, no products from the same manufacturer are delivered in two consecutive boxes. In the case of international products, Foodist is often the first German company that order’s their products. Therefore, Foodist expects a maximum of exclusiveness and independence in terms of pricing and further partnerships. The manufacturers can distribute in a new market and gain a very attractive margin in the long-term, if the product gets delivered in the online-shop as well. Finally, all these resources provide a unique position in the market that can be determined by its performance in the next section.
5.4 Performance
29 Chart 5: Profitability per subscriber
Additionally, Table 3 indicates the yearly development in profitability from 2014 to 2016 (planned) based on the ROA. The marginal return is increasing by 4% annually. This performance is achieved due to an increasing number of customers and a better position to negotiate with the supplier and the delivery services. As indicated in the table, Foodist can increase its profitability by decreasing expenditures in terms of production costs, packaging and handling and shipping costs.
2014 2015 2016 (planned)
in € in % in € in % in € in %
Price per box 24.00 100 24.00 100 24.90 100
- Production costs 10.40 43 9.85 41 9.40 38
- Packaging 1.75 7 1.50 6 1.35 5
- Shipping 3.14 13 2.98 12 2.89 12
- Tax 1.57 7 1.57 7 1.74 7
= Marginal Return 7.14 30 8.10 34 9.52 38
Table 3 – Increase in Profitability – Marginal Return
The subjective impression about performance highlighted during the interview is in line with the objective measurements. In line with the literature (Aragon and Sánchez, 2005) Alexander expressed a positive image of the ‘overall performance’. However, to gain a complete picture
Marke ting costs 1 2 3 4 5 6 7 8 9 10 11 12 2014 -12 -5,5 1 7,5 14 25,5 27 33,5 40 46,5 53 2015 -11,19 4,4 3,09 5,01 13,11 21,21 29,31 37,41 45,51 53,61 61,71 69,81 78,64 -20 -10 0 10 20 30 40 50 60 70 80 90 €
30 on performance (Hagen et al., 2012); also the objective measurements highlighted above are positively. Finally, subjective and objective measurements on performance indicate the right use of resources in terms of processes, positions and paths.
5.5 Growth
As mentioned in the literature, business growth are mostly measured in terms of sales/revenues and employment. Both highlight the rapid growth of Foodist resulting from the right use of resources and the following high performance. One of the most influential resources leading to rapid growth is the financial investment by crowdfunding activities. To indicate the growth Foodist indicate a fourfold increase of subscriptions and revenues by using total numbers and the increase in percent compared to the previous month before the equity-based crowdfunding. This numbers are presented in the following two tables to illustrate growth of the first two financing rounds.
Subscriptions (per month) Revenue (per month) Before crowdfunding in total € 350 € 9,600
After crowdfunding in total € 1,600 € 45,000 Increase in total + 1,250 + € 35,400
Increase in percent + 357% + 369%
Table 4 – Growth after the first equity-based crowdfunding on Companisto – April/May 2013
Subscriptions (per month) Revenue (per month) Before crowdfunding in total € 1,600 € 45,000
After crowdfunding in total € 14,000 € 450,000 Increase in total + 12,600 + € 405,000
Increase in percent + 775% + 900%
Table 5 – Growth after the second round since the first equity-based crowdfunding
31 More important for the internal use to analyze the financial development about recent changes are objective numbers in terms of revenues, costs of goods sold (COGS), gross profit and finally the EBIT of activities quarterly. Foodist needs these objective numbers to measure the target numbers in contrast to the actual development. The numbers are used to indicate for themselves their real economic position by analyzing factors that might determine the outcome of Foodist. The numbers presented in Table 6 indicate that growth apart from the crowdfunding rounds is less rapid.
Actual Q1/2015 Target Q2/2015 Actual Q2/2015 Target/Actual Q2 Revenues € 1,438,157 € 1,151,105 € 1,220,295 + 6%
COGS - € 847,550 € 1,220,295 + 9.1%
Gross Profit - € 303,555 € 295,641 - 2.6%
EBIT - € -136,945 € -126,809 - 7.4% Table 6 – Revenues, COGS, Gross Profit, EBIT
In other words, Table 6 provides clear numbers about the quarterly development of Foodist. Conspicuously there is a decrease of quarterly revenues in 2015 from Q1 to Q2. Foodist explains this decrease by extensive revenues by many TV appearances and the Christmas sales period the month before. However, the revenues in Q2 exceed the target by 6% which indicate the unexpected success to increase the revenue even in summer. Another issue indicating a negative target/actual balance in Q2 is the gross profit, which is defended by unexpected costs of producing the Foodist Box. This costs increase, because the pound-euro exchange rates remained unexpectedly strong while Foodist purchased two alcoholic beverages for the box in max. Consequently, the production price for the box was linked to German VAT rate of 19%, instead of 7%, and Foodist had to charge the composite rate. Moreover, in 2015, Foodist planned to generate slight profits for the first time. Thus, the investments at the beginning of the year are calculated to make a loss of €- 135,945 in Q2, however they reduced the estimated loss by 7.4 %. This indicates a better performance, than planned, although losses were calculated. The liquidity is ensured by the third crowdfunding campaign.
32 Chart 5 – Employee Development 2012 - 2015
Putting together both measurement to indicate fast growth (Delmar et al., 2003), Foodist can be indicated as a fast growing business, or in other words as a ‘gazelle’ (Birch et al, 1995). Foodist fulfills the criteria of the OECD (2008), by having an increase in the number of employees of at least 20% per year measured over three years.
6. Conclusion
This paper dealt with the research question, how processes, paths and positions influence the performance and growth of a new venture. Based on further investigations on the current research on the resource-based view (RBV), certain suggestions for future theorizing and research were used to develop a conceptual model. As a contribution on Kraaijenbrink et al. (2010) assessment on the critique on the RBV, this analysis provided a case study to apply the suggestions by Kraaijenbrink et al. (2010) on Teece’s (1997) categorization of resources. Indeed, more process-based research is needed within the RBV to probe how resources and performance are related to each other. Especially, demarcating and defining resources (Kraaijenbrink et al., 2010) provides a profound way to analyze resources in the context to processes, positions and paths. Furthermore, rather than on objective and abstract value of
2012 (Dec.) 2013 (Dec.) 2014 (Dec.) 2015 (Aug.)
33 resources, it is important to indicate the resources more firm-specific. Finally, the Foodist case offered an explanation how the RBV can be used as an explanation for firms how to be sustainable by further development of firm-specific resources.
To answer the research question, a case study on Foodist was used to analyze how important resources are for the overall performance of a new venture. The qualitative data expressed that especially processes are a highly important source for the value of Foodist. By constantly developing the integration, learning and transformation of resources, Foodist creates resources that other firms cannot imitate. They are less focused on external conditions (Porter, 1980) and try to be focused on firm-specific strengths. Building upon the advantages resulting from their first-mover advantage, they are able to strengthen the assets in their positions. Based on their strong development of firm-specific resources, they can use their resources for further development and rapid growth. The research on Foodist helped to improve the understanding how certain resources contribute differently to performance.
In sum, this research offers a way to use the RBV more pragmatic with clear indicators that lead to performance, but there is still more research needed of RBV in the light of firm-specific analysis and the effects of resources on performance. One the one hand, research could continue by measuring how processes, positions and paths relates to each other and how In fact, this research paper has its limitations. Obviously, the generalization of the results is limited, because the study is only linked to one specific context. Foodist is a firm that is acting in a young industry, the way to distribute food products is rather young and it is geographically scoped to Germany. Further limitation is based on the collection of data. The interview was held with only one out of three founders who provided answers. This may led to incomplete insights, because the other founders or further employees have other insights. Furthermore, the interview and the provided statistics and data is used as the main source, therefore especially data from the interview will provide subjectivity that cannot be avoided. Thus, an interview with an employee expressed correlations. However, multiple perspectives are lacking. All these limitations can steer future research.
34
7. References
Almus, M. (2000). Testing “Gibrat’s Law“ for Young Businesses: Empirical Results for West Germany, Small Business Economics, 15(1), 1-12.
Almus, M. (2002). What Characterizes a Fast-growing Firm? Applied Economics, 34(12), 1497-508.
Amit, R. and P. Schoemaker (1993). 'Strategic assets and organizational rent', Strategic
Management Journal 14(1), pp. 33-46.
Andrews, K. (1987). The Concept of Corporate Strategy (3rd ed.). Dow Jones-Irwin, Homewood, IL.
Aoki, M. (1990). 'The participatory generation of information rents and the theory of the firm'. In M.Aoki, B. Gustafsson and 0. E. Williamson (eds.),The Firm as a Nexus of Treaties. Sage, London,pp. 2652.Barkham, R., Gudgin, G., Hart, M. and Hanvey, E. (1996). The
determinants of Small Firm Growth. Gateshead: Athenaeum.
Aragón-Sánchez, A. and Sánchez-Marín, G. (2005).Strategic Orientation, Management Characteristics, and Performance: A Study of Spanish SMEs. Journal of Small Business
Management. Volume 43, Issue 3, pages 287–308-
Argyres, N. (1995). Technology strategy, governance structure and interdivisional coordination. Journal of Economic Behaviour and Organization, 28, pp. 337-358. Bain, J.S. (1956). Barriers to New Competition: Their Character and Consequences in Manufacturing Industries, Harvard University Press, Cambridge, MA.
Bain, J.S. (1968). Industrial organization. New York: John Wiley.
Barney, J. (1991). Firm Resources and Sustained Competitive Advantage, Journal of
Management, 17, 1991, pp. 99-120.
Barney, J. (2001). Is the Resource-Based “View” a Useful Perspective for Strategic Management Research? Yes, Academy of Management Review, Vol. 26, No1., pp.41-56. Barney, J. B. (2002). Gaining and sustaining competitive advantage. Upper Saddle River, NJ: Prentice Hall.
Bercovitz, J. E.L., de Figueiredo, J.M., and Teexe, D.J. (1996). Firm capabilities and managerial decision-making: A theory of innovation biases.
Birch, D.L., Haggerty, A. And Parsons, W. (1995). Who’s Creating Jobs? Boston: Cognetics Inc.
35 Birley, S., Muzyka, D., Dove, C. And Russel, G. (1995). Finding the High-flying
Entrepreneurs: A Cautionary Tale. Entrepreneurship: Theory and Practice, 19(4), 105-12. Brandenburger, A.M. & Nalebuff, B.J. (1996). Co-opetition -A Revolution Mindset That Combines Competition and Cooperation. Curreny/Doubleday.
Brinckmann, J., Grichnik, D., and D. Kapsa (2010). Should Entrepreneurs Plan or Just Storm the Castle? A Meta-Analysis on Contextual Factors Impacting the Business Planning
Performance Relationship in Small Firms, Journal of Business Venturing, 25, p. 24-40. Chandler, G.N. and Hanks, S.H. (1993). Measuring the Performance of Emerging Businesses: a Validation Study. Journal of Business Venturing, 8(5), 391-408.
Chandler, G.N., McKelvie, A. and Davidsson, P. (2009). Asset specificity and behavioral uncertainty as moderators of the sales growth — Employment growth relationship in emerging ventures. Journal of Business Venturing. Volume 24, Issue 4, July 2009, Pages 373–387.
Delmar, F., Davidsson, P. And Gartner, W.B. (2003). Arriving at the High-growth Firm.
Journal of Business Venturing, 18, 89-216.
Dunne, P. And Hughes, A. (1994). Age, Growth and Survival: UK Companies in the 1980s’, Journal of Industrial Economics, 42(2), 115-40.
Emans, B.J.M. (2004).Interviewing,theory, techniques and training. Groningen: Stenfert Kroese.
Fujimoto, T. ( 1994). 'Reinterpreting the resource-capability view of the firm: A case of the development-production systems of the Japanese automakers',draft working paper, Faculty of Economics, University of Tokyo.
Garvin, D. (1988). Managing Quality. Free Press, New York.
Garvin, D. (1994). 'The processes of organization and management', Harvard Business School working paper #94-084.
Gray, C. (2002). Entrepreneurship, Resistance to Change and Growth in Small Firms. Journal
of Small Business and Enterprise Development, 9(1), 61-72.
Hagen, B., Zuchella, A., Cerchiello, P., and N. De Giovanni (2012). International Strategy and Performance – Clustering Strategic Types of SMEs. International Business Review, 21, 369-382.
Hart, P.E. and Oulton, N. (1996). Growth and Size of Firms. Economic Journal, 106(438), 1242-52.
36 Hull, L. and Arnold, R. (2008). New Zealand Firm Growth as Change in Turnover.
Wellington: Ministry of Economic Development.
Katz, M. and Shapiro, C. (1985). Network externalities, competition and compatibility. American Economic Revie, 75, pp. 424-440.
Kay, J. (1994). Foundations of Corporate Success, Oxford University Press, Oxford. Kraaijenbrink, J., Spender, J.C., Groen, A.J. (2010). The Resource-Based View: A Review and Assessment of Its Critiques. Journal of Management 2010, 36, 239. DOI:
10.1177/0149206309350775.
Levitt, B. and J. March (1988). 'Organizational learning', Annual Review of Sociology, 14, pp. 319-340.
Lotti, F., Santarelli, E. and Vivarelli, M. (2003). Does Gibrat’s Law Hold among Young, Small Businesses? Journal of Evolutionary Economics, 13(3), 213-35.
Mahoney, J.T. and Pandian, J.R. (1992). The resource-based view within the conversation of strategic management. Strategic Management Journal, 13: 363-380.
Masurel, E. and van Kees, M. (2006). Life Cycle Characteristics of Small Professional Service Firms. Journal of Small Business Management 2006 44(3), pp. 461–473. McKinsey&Company (2014). Warenzustellung am selben Tag vor dem Durchbruch. Retrieved from: http://www.mckinsey.de/warenzustellung-am-selben-tag-vor-dem-durchbruch; accessed May 15th, 2015.
Miller, D. (2003). An asymmetry-based view of advantage: Towards an attainable sustainability. Strategic Management Journal, 24: 961-976.
Mody, A. (1993). 'Learning through alliances', Journalof Economic Behavior and
Organization, 20(2), pp. 151-170.
Murphy, G.B., Trailer, J.W., J.W. and Hill, R.C. (1996). Measuring Performance in Entrepreneurship. Journal of Business Research, 36, 15-23.
Nelson, R. (1996). The evolution of competitive or comparative advantage: A preliminary report on a strudy, WP-96-21, International Institute for Applied Systems Analysis, Laxemberg, Austria.
Nicholls-Nixon, C.L. (2005). Rapid Growth and High Performance: The Entrepreneur’s “Impossible Dream”? Academy of Management Executive, 19(1), 77-89.
OECD (2008). Measuring Entrepreneurship: A Digest of Indicators. Paris: OECD.
37 Penrose, E. (1958). The theory of the growth of the firm. Wiley, New York.
Peteraf, M. A. and Barney, J. B. (2003), Unraveling the resource-based tangle. Manage. Decis. Econ., 24: 309–323.
Phillips, B.D. and Kirchhoff, B.A. (1989). Formation, Growth, and Survival: Small Firm Dynamics in the US Economy. Small Business Economics, 1(1), 65-74.
Porter, M.E., (1980). Competitive strategy. Techniques for analyzing industries and competitors. New York: Free Press.
Priem, R. L. and Butler J. E. (2001) Is the Resource-Based “View” a Useful Perspective for Strategic Management Research?, Academy of Management Review, Vol. 26, No1., pp.22-40. Robson, P.J.A. and Bennett, R.J. (2000). SME growth: The Relationship with Business Advice and External Collaboratio. Small Business Economics, 15(3), 193-208.
Rouse, M. J. and Daellenbach, U. S., (1999). Rethinking research methods for the resource based perspective: isolating sources of sustainable competitive advantage, Strategic
Management Journal, 20(5), 487-494.
Rumelt, R. P. (1991 ). ‘How much does industry matter?’, Strategic Management Journal,12(3 ), pp. 167–185.
Santos, J.B. and Brito, L.A.L. (2012). Toward a Subjective Measurement Model for Firm Performance. Brazilian Administration Review. Rio de Janeiro, v. 9, special issue, art. 6, pp. 95-117.
Sexton, D.K. (1997). Entrepreneurship Research Needs and Issues’, in Sexton, D.L. and Smilor, R.W. (eds), Entrepreneurship 2000. Chicago, IL: Upstart Publishing, 401-8.
Skrabania, L. (2014). Tasty-Box Anbieter meldet Insolvenz an. Gründerszene. 20. März 2014. Retrieved on 21st April 2015 on: http://www.gruenderszene.de/allgemein/foodiesquare-insolvenz.
Stinchcombe, A. L. (1965). Social Structure and Organizations. In March, J. G. Handbook of Organizations 7. Chicago: Rand McNally & Co. pp. 142–193.
Storey, D.J. and Greene, F.J. (2010). Small Business and Entrepreneurship. Pearson Education.
Teece, D. J., Pisano, G. and Shuen, A., (1997). Dynamic Capabilities and Strategic Management, Strategic Management Journal, Vol 18:7, pp 509-533.
Walker, E. and Brown, A. (2004). What Success Factors are Important to Small Business Owners? International Small Business Journal. 2004, 22: 577. DOI:
