An investigation of resources and competencies in rural retailers Bachelor thesis, 2FE10E 15 credits, spring 2013 Group 1 2013-05-22 Tutor: Michaela Sandell Examiner: Setayesh Sattari Henric Gustavsson [email protected] Sofia Kokacka [email protected] Sophia Lavasani [email protected] Abstract The last decades has demonstrated a decline in rural trade and an extensive closure of rural stores. As rural stores not only provide rural inhabitants with important service functions and groceries but also constitutes as the basis for a vivid countryside, it is of importance to preserve and develop these. According to the resource based view, the deployment of internal resources and capabilities can lead to competitive advantage and therefore it is of interest to investigate the resources and competencies possessed by rural retailers. Hence, the purpose of the report: From a resource based view, investigate internal resources and competencies for rural retailers, with focus on marketing and entrepreneurship. Based on a review of existing literature, a conceptual model was conducted for this study. The conceptual model suggests that Marketing in SMEs, Services in SMEs, Human- and social capital in SMEs as well as Corporate entrepreneurship in SMEs are all influential for how rural retailers utilise their resources and competencies. For this thesis a multiple-case study was carried out in form of semi-structured interviews with four rural retailers located in the county of Kronoberg. The findings of this research reveal that marketing techniques combined with entrepreneurial thinking had a greater effect on diffusion, than when marketing techniques were practised in isolation. Moreover, services in relation to social capital were also enhanced when combined, rather than standing alone. For instance, services with social functions received greater response among customers in rural communities. Furthermore, relationship built through commitment, trust and reciprocity may lead to in-shopping behaviour among customers. Thus, the concepts of Services in SMEs and Human-and social capital in SMEs appeared to have the greatest influence on the resources and competencies leading to uniqueness and improved customer relationships. Finally, social capital can also be seen as a key resource in corporate entrepreneurship. Corporate entrepreneurship driven by visionary leaders who communicate their visions to their employees appeared to develop more plans for the future. Key words: resources, competencies, corporate entrepreneurship in SMEs, marketing in SMEs, services in SMEs, human capital in SMEs, social capital in SMEs. 1 Table of Content 1. Introduction ............................................................................................................................................ 5-10 1.1 Background .................................................................................................................................................. 5 1.2 A national matter - a regional concern ......................................................................................................... 6 1.2.1 Regional status of Kronobergs län ............................................................................................................ 7 1.3 Problem discussion ....................................................................................................................................... 7 1.4 Delimitations ................................................................................................................................................ 8 1.5 Outline of thesis ............................................................................................................................................ 9 2. Literature review .................................................................................................................................. 10-23 2.1 Resource-based view .................................................................................................................................. 10 2.2 SMEs and micro-firms in rural communities ............................................................................................. 11 2.2.1 Marketing techniques in SMEs ............................................................................................................... 13 2.2.2 Services in SMEs ..................................................................................................................................... 15 2.2.3 Human- and social capital in SMEs ........................................................................................................ 16 2.3 Corporate entrepreneurship in SMEs ......................................................................................................... 19 2.3.1 Success factors in corporate entrepreneurship ........................................................................................ 20 3. Proposed Conceptual model and research questions ........................................................................ 23-25 3.1 Proposed Conceptual model ....................................................................................................................... 23 3.2 Research Questions .................................................................................................................................... 24 4. Methodology ......................................................................................................................................... 25-43 4.1 Research approach ...................................................................................................................................... 25 4.1.1 Inductive vs. Deductive Research ........................................................................................................... 25 4.1.2 Quantitative vs. Qualitative research ....................................................................................................... 25 4.2 Research Design ......................................................................................................................................... 26 4.3 Data Sources ............................................................................................................................................... 27 4.4 Research Strategy ....................................................................................................................................... 27 4.5 Data collection method ............................................................................................................................... 29 4.6 Data collection instrument .......................................................................................................................... 30 4.6.1 Operationalization and measurement of variables................................................................................... 30 4.6.2 Interview guide/schedule ......................................................................................................................... 34 4.6.3 Pretesting ................................................................................................................................................. 36 4.7 Sampling ..................................................................................................................................................... 37 4.7.1 Sampling selection .................................................................................................................................. 38 4.8 Data analysis method .................................................................................................................................. 39 2 4.9 Quality Criteria ........................................................................................................................................... 40 4.9.1 Content validity ....................................................................................................................................... 41 4.9.2 Construct validity .................................................................................................................................... 41 4.9.3 External Validity ..................................................................................................................................... 41 4.9.4 Reliability ................................................................................................................................................ 42 5. Empirical investigation ........................................................................................................................ 43-71 5.1 Case one - Matöppet in Agunnaryd ............................................................................................................ 43 5.1.1 Introduction ............................................................................................................................................. 43 5.1.2 Marketing ................................................................................................................................................ 44 5.1.3 Services ................................................................................................................................................... 45 5.1.4 Human- and social capital ....................................................................................................................... 46 5.1.5 Corporate