Interfirm Rivalry between Small Hardware Stores and “Big Box” Retailers: Market Commonality and Product Mix Similarity as Antecedents to Competitive Response

Authors

  • Reginald A. Litz,

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    • Reginald A. Litz is a professor in the Department of Business Administration at the Asper School of Business, University of Manitoba.
  • Jeffrey M. Pollack

    Corresponding author
    • Address correspondence to: Jeffrey M. Pollack, Department of Management, Robins School of Business, University of Richmond, Richmond, VA 23173. E-mail: jpollack@richmond.edu.

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    • Jeffrey M. Pollack is an assistant professor in the Department of Management, Robins School of Business, University of Richmond.

  • Authors are listed in alphabetical order as both contributed equally.
  • The authors gratefully acknowledge the funding provided by the North American Retail Hardware Association for this research project. Reginald A. Litz gratefully acknowledges the support received for this research from the Stu Clark Fellowship Program in Entrepreneurship at the Asper School of Business (Winnipeg, Canada), and the Toft Visiting Professorship of Family Business at the Center for Family Enterprise and Ownership in Jönköping International Business School (Jönköping, Sweden).

Abstract

We examined market commonality and product mix similarity as predictors of competitive response by small retail hardware stores to their nearest “Big Box” competitor. Data from 314 small retail hardware stores revealed a consistent relationship between greater market commonality and small firm responsiveness. However, no consistent relationship was observed between resource similarity and responsiveness. Tests for interactions between these two predictors were inconsistent—two (of five) specific product categories (i.e., hardware and tools, seasonal goods) were significant but in divergent patterns. We discuss what these findings suggest concerning the competitive interaction between small retailers and their Big Box rivals.

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