Competitive Strategy in a Context of Low Financial Resources

Abstract

Traditionally, competitive advantage has been based upon large-scale production and accumulation of large quantities of physical and financial assets. Large financially capable firms, particularly Multi-national Corporations (MNCs) and large construction firms create competitive advantages and sustain them through the use of such defence mechanisms as entry barriers and other competition-impeding features of industry structure. Small firms in developing countries, especially in Africa can hardly mobilize financial resources to match the MNCs and the large construction firms, nor can they employ similar defence mechanisms due to their lack of global reach.Using the construction industry in Botswana, the paper reports on a pilot study that investigated the factors that are crucial to creating constantly changing competitive advantage in the context of low financial resources. It concludes by emphasizing that firms operating in low financial contexts should create dynamic competitive advantages instead of imitating the strategies used by large financially capable firms.