How are the capabilities at the origin of a CA developed through the time in small and medium enterprises?

: h3 - Hambúrguer Gourmet case study

Abstract

How are the capabilities at the origin of a CA developed through the time in SME? The present dissertation configures the path for a prior understanding and subsequent analysis of the RBV theory and particularly concerns itself with DC theory, which are considered the most influencing and quoted strategy theories in the field.Through its VRIO model, the RBV theory ultimately defends an integration of the critical resources (valuable, rare, imperfectly imitable, organization) of the firm to achieve a CA positioning. This perspective has its own limitations, as it essentially focuses on the internal perspective of the firm. On the other hand, the DC theory introduces an external context to the company by highlighting the relevance of the external environment in the development of capabilities. DC can be defined as the firm’s capability to integrate, develop and reconfigure its internal and external competences base according to changes in the environment.Due to these complementarities, practitioners go further to say that DC can be seen as a particular case of the VRIO model, but able to respond and adapt to changes in a dynamic industry. To help answer the research question both theories were conjugated to form the knowledge base for the prosecution of this study.The research problem associated to this project lies in how a SME, operating in a mature industry where the rate of growth has slowed, can develop capabilities that potentially enable a CA positioning in the market. The h3 - Hambúrguer Gourmet was the chosen case study to address the research problem.Along the case discussion the firm’s five critical resources and two capabilities are argued under the VRIO model. In a second section and to understand how the firm’s capabilities were developed through time, an explanatory model adapted by Cardeal (2010) to SME is applied to h3 according to the three different stages the model suggests.After interpreting the findings of the case study, the constant and active role the facilitator agent has during the different stages of the change process in a SME became evident. In these type of firms, the managing partners are usually the responsible part in this process of capabilities development and it became clear, how top manager’s actions and decisions triggered the progress from the beginning towards h3’s premium positioning in the market.The progress starts with the recognition of market and internal opportunities, which will set off the new business model. The top manager’s role is preponderant to delineate the boundaries of the model as well as how everything is going to be played out, by means of their perseverance, adequate functional policies and the way they build loyalty and commitment around their business objectives. Given the findings of this study, one is able to help top managers better orchestrate their ideas to develop new business models and the different ways to efficiently enhance their implementation.

Date of Award	2011
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Nuno Cardeal (Supervisor)