Differentiation for competitive advantage in a small family business

Abstract

Purpose

The purpose of this paper is to report how a small, family‐owned children's play centre can achieve competitive advantage by developing a differentiated service. The aim is to show how this differentiation strategy is operationalized in a small family business using safety critical and work critical regulatory practices, and to examine their impact on operations and customers.

Design/methodology/approach

A case study approach was taken, collecting data through observation over a 24‐month period from design, through construction, to the first 18 months of operations. A survey of customers was undertaken after the centre had been open for 12 months.

Findings

From startup in 2005, the centre has attracted between 1,500 and 2,000 children per week. It charges premium admission prices (twice those of competitors) and also charges for accompanying adults. Customers travel up to 20 miles to the centre, extremely high customer satisfaction levels are achieved, over 99 per cent of customers would recommend the centre to others and repeat visits are the norm.

Research limitations/implications

The research covers a single case and therefore is only generalisable back to theory rather than to the population of free‐standing children's soft play area businesses.

Practical implications

When organizations within a particular industry sector operate within the confines of that industry's legal requirements, it is the voluntary practices that are likely to lead to differentiation of the service.

Originality/value

The paper provides a detailed case study on how a small family business achieves competitive advantage by utilising safety critical and work critical practices to strategically differentiate its service offering.

Citation

Douglas, A., Douglas, J. and Davies, J. (2010), "Differentiation for competitive advantage in a small family business", Journal of Small Business and Enterprise Development, Vol. 17 No. 3, pp. 371-386. https://doi.org/10.1108/14626001011068680