DETERMINANTS OF FOOD SMEs COMPETITIVE ADVANTAGE : HOW RESOURCES, STRATEGIES AND PERFORMANCE ARE RELATED? An application in Italy

Given the situation of the economic scenario characterised by globalisation and a consequent increase of competition, in the food sector firms are pushed to find the most successful strategy in order to survive among competitors, and beside large firms who want to play a leadership role, try to carve out a peculiar and differentiated position in the market. In order to set up a successful strategy it is useful to understand the potential sources of competitive advantage (Azevedo and Ferreira, 2007; Teece et al., 1997). The theoretical model of Resource-based View is inserted in this framework because it examines the strict connection among internal resources and performance of the firm, outlining how the resources can be a source of competitive advantage (Barney, 1991; Wilkens et al., 2004; Teece et al., 1997; Wernerfelt, 1984). Since each firm could exploit different kind of resources and capabilities organised into different strategies, the heterogeneity among firms results to be the focus of the analysis. Moreover, even if the economic literature on strategic management models is rich of contributes about this field of research, the empirical applications are still limited and rare, especially in the food sector. For these reason, this theoretical approach has been utilised to evaluate food firms performance in relation with the resources owned and the strategies carried out by the firms. As in the European and Italian food sector there is a high incidence of small and medium enterprises (SMEs), which must face up the growth of the competition through the exploitation of peculiar resources and capabilities and the choice of appropriate strategies, the analysis has been addressed to this category of firms. The objective of this work is twofold: on one side, we want to evaluate the relationship between resources of the food SMEs and the strategic choices of the firms themselves. In this way it is possible to identify which are the crucial resources playing a leading role in the entrepreneurial choices. On the other side, we want to assess the effect of these strategic choices on the performance realised by the food SMEs, basing on the fact that the strategies act as mediator between resources and performance. This two objectives will be assessed in the food SMEs located in Lombardy by applying the Structural Equation Model (SEM). In the analysis, six category of resources and capabilities have been selected: innovation, marketing, network, human resources, knowledge, and region specificity. The last one at the end has not been considered as only few firms in the ample produce PDO-PGI. Basing on these resources and capabilities, three strategic conducts have been identified: innovation conduct, product positioning conduct, and relationships’ development conduct. The main finding of this study is that, when evaluating the performance of a firm, it is not enough to look only at the strategies applied, but the internal resources have also to be considered. Indeed, in our study, we found that strategic conducts based on innovation, product positioning, and relationships development have effect on the performance, but only if peculiar resources and capacities are considered integral part of them. And this is important especially for SMEs which are often characterised by idiosyncratic resources to be exploited for reaching competitive advantage. Moreover, it is confirmed that it is really important to meet consumers’ needs, through continuous delivery of products shaped on their exigencies; for this reason the development of new products and the investment in R&D result to be fruitful, also when linked to the product positioning activities, which allow the firm to carry out the marketing mix and chose the most appropriate consumer target in respect with the resources of the firm. The development of relationships along the supply chain is also revealed extremely important, as they allow to improve the level of quality of the products through continuous contacts with suppliers, to have information about the desires of the consumers through relations with clients and retailers, and to guarantee them about the safety and the quality level of the products. Therefore, in the present economic scenario, characterised by increasing competition and market internationalisation, food SMEs could concentrate their attention on developing strategies which derive from specific resources and capabilities.