chapter  7
16 Pages

Financial considerations of competitive advantage

This chapter takes a close look at the degree to which the SBE achieves competitive advantage by addressing its financial considerations, thereby adding another useful dimension to business strategy. The SBEs under examination are typically in their infancy (i.e. the early stage of development) and groping around in an unfamiliar and complex business environment to establish themselves in fragmented markets. Thus the attaining of immediate competitive advantage (in the sense of above-average industry performance) may be regarded as optimistic, if not downright unrealistic. More pragmatic, especially for the nascent SBE, is the setting of an initial objective of sheer survival, to be followed in due course, by a consideration of the means for achieving competitive advantage. Therefore, as our analysis emphasizes, it is useful to do more than simply to show how changes in the SBE’s assets, sales, employees, for example, reflect competitive advantage. The previous two chapters have looked into niche invasion, channel access, innovation, and so on. One should also be considering the financial stresses, and subsequent adjustments, that must be withstood in the early days of the SBE’s existence before prospects of competitive advantage are quite in sight.