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Competitive advantage of independent small businesses in Soweto


JA Badenhorst-Weiss
JO Cilliers

Abstract

Small businesses in Soweto face increasing competition from large retail chains located in shopping malls. In order to survive and grow, small business owners need to identify and focus on the competitive advantage they have over competing businesses. The aim of this article is to explore the various sources of a competitive advantage, focusing specifi cally on differentiation and a unique value package as a market strategy to ensure competitiveness and sustainability for formal independent small businesses in Soweto. In this study, it was found that sustainable businesses (older small businesses with a growing income tendency) tend to perform a competitor analysis regularly. It was further determined that sustainable businesses regard price, shopping hours, personal attention and close relationships as important differentiating elements. They also include product quality, best brands and variety as important elements of their value package. It was found that sustainable small businesses use the elements of their value packages better than stagnating or shrinking businesses. The conclusion can be reached that sustainable formal independent small businesses stay competitive by differentiating themselves on the elements of the unique value package they offer to customers.

Key words: competitive advantage, competitive strategies, differentiation, wholesalers, retailers, small business, Soweto, sustainability, product value, formal small business


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eISSN: 1998-8125
print ISSN: 1561-896X