Skip to main content
SpringerLink
Log in

Retail capability systems

  • Theory/Conceptual
  • Published:
AMS Review Aims and scope Submit manuscript

Abstract

Drawing on the retail literature, archival records, and managerial interviews, we identify twelve capabilities associated with retail success. These capabilities are hierarchically grouped as foundational or supportive. Foundational capabilities are the basis upon which retail advantages are built, while supportive capabilities principally enhance the value of foundational capabilities. Drawing on systems theory, the loosely coupled systems perspective, and the Resource Based View, we propose that unique combinations of a foundational capability and an interdependent subset of supportive capabilities form four capability systems: brand management, merchandising, service, and market information management. The capability systems are socially complex and causally ambiguous making imitation by rivals particularly difficult. A retailer’s strategy determines the emphasis and focus placed on each of the four capability systems. We use the Miles and Snow (1978) strategy typology and the strategic fit literature to develop propositions linking our four capability systems to Defender, Analyzer, and Prospector strategies. We further propose that maintaining status-quo investments in all capabilities is necessary to achieve competitive parity. Ultimately, our capability systems perspective adds to the retail literature by enhancing our understanding of firm heterogeneity and performance.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

Notes

  1. Detailed interview protocols are available from the first author.

References

  • Aaker, D. A. (1992). The value of brand equity. Journal of Business Strategy, 13(4), 27–32.

  • Aaker, D. A. (1996). Measuring brand equity across products and markets. California Management Review, 38(3), 102–120.

  • Achabal, D. D., McIntyre, S. H., Smith, S. A., & Kalyanam, K. K. (2000). A decision support system for vendor managed inventory. Journal of Retailing, 76(4), 430–454.

    Article  Google Scholar 

  • Agarwal, R., & Helfat, C. E. (2009). Strategic renewal of organizations. Organization Science, 20(2), 281–293.

    Article  Google Scholar 

  • Ailawadi, K. L., & Keller, K. L. (2004). Understanding retail branding: conceptual insights and research priorities. Journal of Retailing, 80(4), 331–342.

    Article  Google Scholar 

  • Albert, D., Kreutzer, M., & C. Lechner (2014). Resolving the paradox of interdependency and strategic renewal in activity systems. Academy of Management Review, 40(2), 1–25.

  • Arnold, S., Oum, T. H., & Tigert, D. J. (1983). Determinant attributes in retail patronage: seasonal, temporal, regional, and international comparisons. Journal of Marketing Research, 20(2), 977–1009.

    Article  Google Scholar 

  • Baker, J., Levy, M., & Grewal, D. (1992). An experimental approach to making retail store environmental decisions. Journal of Retailing, 68(4), 445–460.

    Google Scholar 

  • Barney, J. (1991). Firm supportive capabilities and sustained competitive advantage. Journal of Management, 17(1), 99–120.

    Article  Google Scholar 

  • Barney, J., Ketchen, D., & Wright, M. (2011). The future of resource-based theory: revitalization or decline? Journal of Management, 37(5), 1299–1315.

    Article  Google Scholar 

  • Basker, E. (2007). The causes and consequences of Wal-Mart’s growth. Journal of Economic Perspectives, 21(3), 177–198.

    Article  Google Scholar 

  • Bharadwaj, A. S., Bharadwaj, S. G., & Konsynski, B. R. (1999). Information technology effects on firm performance as measured by Tobin’s q. Management Science, 45(7), 1008–1024.

    Article  Google Scholar 

  • Bienstock, C. C., Mentzer, J. T., & Bird, M. M. (1997). Measuring physical distribution service quality. Journal of Academy of Marketing Science, 25(1), 31–44.

    Article  Google Scholar 

  • Blade, R., & Parkin, M. (2004). Foundations of economics (2nd ed.). Boston: Pearson Education, Incorporated.

    Google Scholar 

  • Bolton, R. A. (1998). A dynamic model of the duration of the customer’s relationship with a continuous service provider: the role of satisfaction. Marketing Science, 17(1), 45–65.

    Article  Google Scholar 

  • Bosman, R. (2006). The new supply chain challenge: risk management in a global economy. FM Global, 4(6), 1–10.

    Google Scholar 

  • Capron, L., & Hulland, J. (1999). Redeployment of brands, sales forces, and general marketing management expertise following horizontal acquisitions: a supportive capability-based view. Journal of Marketing, 63(2), 41–54.

    Article  Google Scholar 

  • Council of Logistics Management (1986). What is it all About? Oak Brook, IL.

  • Day, G. (1994). The capabilities of market-driven organizations. Journal of Marketing, 58(4), 37–52.

    Article  Google Scholar 

  • DeSarbo, W. S., Di Benedetto, A. C., Song, M., & Sinah, I. (2005). Revisiting the miles and snow strategic framework: uncovering interrelationships between strategic types, capabilities, environmental uncertainty, and firm performance. Strategic Management Journal, 26(1), 47–74.

    Article  Google Scholar 

  • DeSarbo, W. S., Di Benedetto, A. C., Jedidi, K., & Song, M. (2006). A constrained latent structure multivariate regression methodology for empirically deriving strategic types. Management Science, 52(6), 909–924.

    Article  Google Scholar 

  • Dierickx, I., & Cool, K. (1989). Asset stock accumulation and sustainability of competitive advantage. Management Science, 35(12), 1504–1513.

    Article  Google Scholar 

  • Drazin, R., & Van de Ven, A. (1985). Alternative forms of fit in contingency theory. Administrative Science Quarterly, 12(1), 514–539.

    Article  Google Scholar 

  • Dubin, R. (1976). Theory building in applied areas. In M. Dunnette (Ed.), Handbook of industrial and organizational psychology. Chicago: Rand-McNally.

    Google Scholar 

  • Dutta, S., Narasimhan, O., & Rajiv, S. (1999). Success in high-technology markets: is marketing capability critical? Marketing Science, 18(4), 547–568.

    Article  Google Scholar 

  • Eisenberg, T., Sundgren, S., & Wells, M. T. (1998). Larger board size and decreasing firm value in small firms. Journal of Financial Economics, 48(1), 35–54.

    Article  Google Scholar 

  • Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: what are they. Strategic Management Journal, 21(1), 1105–1121.

    Article  Google Scholar 

  • Ellis, B., & Calantone, R. (2011). Understanding competitive advantage through a strategic retail typology. Journal of Applied Business Research, 10(2), 23–32.

    Google Scholar 

  • Fiss, P. C. (2007). A self-theoretic approach to organizational configurations. Academy of Management Review, 32(4), 1180–1198.

    Article  Google Scholar 

  • Fornell, C., Johnson, M. D., Anderson, E. W., Cha, J., & Bryant, B. E. (1996). The American customer satisfaction index: nature, purpose, and findings. The Journal of Marketing, 60(October), 7–18.

    Article  Google Scholar 

  • Frigo, M. L. (2002). Strategic capabilities of return driven strategy. Strategic Finance, 83(12), 6–9.

    Google Scholar 

  • Garrett, D. E. (1987). The effectiveness of marketing policy boycotts: environmental opposition to marketing. The Journal of Marketing, 51(2), 46–57.

    Article  Google Scholar 

  • Grant, R. M. (1991). The supportive capability-based theory of competitive advantage: implications for strategy formulation. California Management Review, 33(1), 114–135.

    Article  Google Scholar 

  • Grewal, R., & Slotegraaf, R. J. (2007). Embeddedness of organizational capabilities. Decision Sciences, 38(3), 451–488.

    Article  Google Scholar 

  • Grewal, D., Baker, J., Levy, M., & Voss, G. B. (2003). The effects of wait expectations and store atmosphere evaluations on patronage intentions in service-intensive retail stores. Journal of Retailing, 79(4), 259–268.

    Article  Google Scholar 

  • Grewal, D., Baker, J., Levy, M., & Kumar, V. (2009). Customer experience management in retailing: an organizing framework. Journal of Retailing, 85(1), 1–14.

    Article  Google Scholar 

  • Gupta, S., Lehmann, D. R., & Stuart, J. A. (2004). Valuing customers. Journal of Marketing Research, 41(1), 7–18.

    Article  Google Scholar 

  • Hambrick, D. C. (2003). On the staying power of defenders, analyzers, and prospectors. Academy of Management, 17(4), 115–118.

    Google Scholar 

  • Hannan, M. T., & Freeman, J. (1984). Structural inertia and organizational change. American Sociological Review, 49(2), 149–164.

    Article  Google Scholar 

  • Helfat, C., Finkelstein, S., Mitchell, W., Peteraf, M., Singh, H., Teece, D., & Winter, S. (2007). Dynamic capabilities: understanding strategic change in organizations. Blackwell: Wiley.

    Google Scholar 

  • Homburg, C., Hoyer, W. D., & Fassnacht, M. (2002). Service orientation of a retailer’s business strategy: dimensions, antecedents and performance outcomes. Journal of Marketing, 66(4), 86–101.

    Article  Google Scholar 

  • Hulland, J., Wade, M. R., & Antia, K. D. (2007). The impact of capabilities and prior investments on online channel commitment and performance. Journal of Management Information Systems, 23(4), 109–142.

    Article  Google Scholar 

  • Jain, A. K., & Mahajan, V. (1979). Evaluating the competitive environment in retailing using multiplicative competitive interactive models. Research in Marketing, 2, 217–235.

    Google Scholar 

  • Jaworski, B. J., & Kohli, A. K. (1993). Market orientation: antecedents and consequences. The Journal of Marketing, 57(3), 53–70.

    Article  Google Scholar 

  • Jia, P. (2006). Entry and competition in the retail and service industries. Ann Arbor: ProQuest Information and Learning Company.

    Google Scholar 

  • Katz, D., & Kahn, R. L. (1966). The social pyschology of organizations. New York: Wiley.

  • Kast, F. E., & Rosenzweig, J. E. (1972). General systems theory: applications for organization and management. Academy of Management Journal, 15(4), 447–465.

    Article  Google Scholar 

  • Ketchen, D. J., Jr., Thomas, J. B., & Snow, C. C. (1993). Organizational performance and configurations: a comparison of theoretical approaches. Academy of Management Journal, 36(6), 1278–1313.

    Article  Google Scholar 

  • Kohli, A., & Jaworski, B. (1990). Market orientation: the construct, research propositions, and managerial implications. Journal of Marketing, 54(2), 1–18.

    Article  Google Scholar 

  • Kohli, A., & Jaworski, B. (1993). Market orientation antecedents and consequences. Journal of Marketing, 57(3), 53–70.

    Article  Google Scholar 

  • Krasnikov, A., & Jayachandran, S. (2008). The relative impact of marketing, research-and-development, and operations capabilities on firm performance. Journal of Marketing, 72(4), 1–11.

    Article  Google Scholar 

  • Laroche, M., Yang, Z., McDougall, G., & Bergeron, J. (2005). Internet versus bricks-and-mortar retailers: an investigation into intangibility and its consequences. Journal of Retailing, 81(4), 251–267.

    Article  Google Scholar 

  • Lee, H. L. (2004). The triple-a supply chain. Harvard Business Review, 82(10), 1–12.

  • Levinthal, D., & March, J. G. (1993). The myopia of learning. Strategic Management Journal Special Issue: Organizations, Decision Making, and Strategy, 14(S2), 95–112.

    Article  Google Scholar 

  • Macy’s, Inc. (2004). Annual report. San Francisco: Macy’s, Inc.

    Google Scholar 

  • Magnuson, E. (1985). The issue has caught fire: demands for divestment grow to thwart apartheid. June 3, 1985: Time Magazine, 25.

  • McDaniel, S. W., & Kolari, J. W. (1987). Marketing strategy implications of the Miles and Snow strategic typology. Journal of Marketing, 51(4), 19–30.

    Article  Google Scholar 

  • Meadows, D., & Wright, D. (Eds.). (2008). Thinking in systems: a primer. Vermont: Chelsea Green Publishing.

    Google Scholar 

  • Meyer, A. D., Tsui, A., & Hinings, C. R. (1993). Configurational approaches to organizational analysis. Academy of Management Journal, 36(6), 1175–1195.

    Article  Google Scholar 

  • Miles, R. E., & Snow, C. C. (1978). Organizational strategy, structure, and process. New York: McGraw-Hill.

    Google Scholar 

  • Miles, R. E., Snow, C. C., Meyer, A. D., & Coleman, H. J., Jr. (1978). Organizational strategy, structure, and process. Academy of Management, 3(3), 546–562.

    Google Scholar 

  • Moore, M. (2005). Towards a confirmatory model of retail strategy types: an empirical test of miles and snow. Journal of Business Research, 58(5), 696–704.

    Article  Google Scholar 

  • Moorman, C., & Slotegraaf, R. J. (1999). The contingency value of complementary capabilities in product development. Journal of Marketing Research, 36(2), 239–257.

    Article  Google Scholar 

  • Morgan, N. A., Vorhies, D. W., & Mason, C. H. (2009). Market orientation, marketing capabilities, and firm performance. Strategic Management Journal, 30(8), 909–920.

    Article  Google Scholar 

  • Myers, M. B., Daugherty, P. J., & Autry, C. W. (2000). The effectiveness of automatic inventory replenishment in supply chain operations: antecedents and outcomes. Journal of Retailing, 76(4), 455–481.

    Article  Google Scholar 

  • Nordstrom, I. (2011). Annual report. Seattle: Nordstrom, Inc.

    Google Scholar 

  • Ofori-Dankwa, J., & Julian, S. D. (2001). Complexifying organizational theory: illustrations using time research. Academy of Management Review, 26(3), 415–430.

    Google Scholar 

  • Olson, E. M., Slater, S. F., & Hult, G. T. M. (2005). The performance implications of fit among business strategy, marketing organization structure, and strategic behavior. Journal of Marketing, 69(3), 49–65.

    Article  Google Scholar 

  • Orlikowski, W. J. & Gash, D. C. (1991). Changing frames: understanding technological change in organizations. Center for Information Systems Research, Sloan School of Management, Massachusetts Institute of Technology. http://dspace.mit.edu/bitstream/id/2001/SWP-3368-25121345/

  • Orton, J. D., & Weick, K. E. (1990). Loosely coupled systems: a reconceptualization. Academy of Management Review, 15(2), 203–223.

    Google Scholar 

  • Palmer, M. (2005). Crossing threshold periods in the retail life cycle: insights from Walmart international. European Management Journal, 23(6), 717–729.

    Article  Google Scholar 

  • Pan, Y., & Zinkhan, G. M. (2006). Determinants of retail patronage: a meta-analytical perspective. Journal of Retailing, 82(3), 229–243.

    Article  Google Scholar 

  • Parasuraman, A. (1997). Reflections on gaining competitive advantage through customer value. Journal of the Academy of Marketing Science, 25(2), 154–161.

    Article  Google Scholar 

  • Pearce, M. R. (1989). Retailers: how to be different from your competitors. Business Quarterly, 54(2), 28–33.

    Google Scholar 

  • Porter, M. E. (1996). What is strategy. Harvard Business Review, November–December, 61–78.

  • Powell, T. C. (2003). Varieties of competitive parity. Strategic Management Journal, 24(1), 61–97.

    Article  Google Scholar 

  • Raff, D. M. G. (2000). Superstores and the evolution of firm capabilities in American bookselling. Strategic Management Journal, 2, 1043–1059.

    Article  Google Scholar 

  • Rousseau, D. M., & Wade-Benzoni, K. A. (1994). Linking strategy and human resource practices, how employee and customer contracts are created. Human Resource Management, 33(3), 463–489.

    Article  Google Scholar 

  • Schulz, D. P. (2013). Top 100 retailers, stores. Washington: The National Retail Federation.

    Google Scholar 

  • Shoprite. (2012). Shoprite integrated report. Keasby: Shoprite.

    Google Scholar 

  • Siggelkow, N. (2002). Evolution toward fit. Administrative Science Quarterly, 47(1), 125–159.

    Article  Google Scholar 

  • Simon, H. A. (1962). The architecture of complexity. Proceedings of the American Philosophical Association, 106(6), 467–482.

    Google Scholar 

  • Simon, D., Hitt, M., Ireland, R. D., & Gilbert, B. A. (2011). Resource orchestration to create competitive advantage: breadth, depth and life cycle effects. Journal of Management, 37(5), 1390–1412.

    Article  Google Scholar 

  • Slater, S. F., & Narver, J. C. (1990). Market orientation, customer value, and superior performance. Business Horizons, 37(2), 22–28.

    Article  Google Scholar 

  • Slater, S. F., & Narver, J. C. (1999). Market-oriented is more than being customer-led. Strategic Management Journal, 20(12), 1165–1168.

    Article  Google Scholar 

  • Snow, C. C., & Ketchen, D. J., Jr. (2014). Typology-driven theorizing: a response to Delbridge and Fiss. Academy of Management Review, 39(2), 231–233.

    Article  Google Scholar 

  • Srivastava, R. K., Shervani, T. A., & Fahey, L. (1998). Market-based assets and shareholder value: a framework for analysis. Journal of Marketing, 62(1), 2–18.

    Article  Google Scholar 

  • Sweeney, J. C., & Soutarb, G. N. (2001). Consumer perceived value: the development of a multiple item scale. Journal of Retailing, 77(2), 203–220.

    Article  Google Scholar 

  • Teece, D., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533.

    Article  Google Scholar 

  • Thompson, J. D. (1967). Organizations in action. McGraw-Hill: New York.

  • Tiwana, A., & Keil, M. (2007). Does peripheral knowledge complement control? An empirical test in technology outsourcing alliances. Strategic Management Journal, 28(6), 623–634.

    Article  Google Scholar 

  • Tiwana, A., & Keil, M. (2008). Research notes and commentaries does interfirm modularity complement ignorance? A field study of software outsourcing alliances. Strategic Management Journal, 29(11), 1241–1252.

    Article  Google Scholar 

  • Tracey, M., & Tan, C. L. (2001). Empirical analysis of supplier selection and involvement, customer satisfaction, and firm performance. Supply Chain Management: An International Journal, 6(4), 174–188.

    Article  Google Scholar 

  • Turley, L. W., & Milliman, R. E. (2000). Atmospheric effects on shopping behavior: a review of the experimental evidence. Journal of Business Research, 49(2), 193–211.

    Article  Google Scholar 

  • Vorhies, D. W., & Morgan, N. A. (2005). Benchmarking marketing capabilities for sustainable competitive advantage. Journal of Marketing, 69(January), 80–94.

    Article  Google Scholar 

  • Wade, M., & Hulland, J. (2004). Review: the supportive capability-based view and information systems research: review, extension, and suggestions for future research. MIS Quarterly, 28(1), 107–142.

    Google Scholar 

  • Wallace, D. W., Giese, J., & Johnson, J. L. (2004). Customer retailer loyalty in the context of multiple channel strategies. Journal of Retailing, 80(4), 249–263.

    Article  Google Scholar 

  • Weick, K. E. (1976). Educational organizations as loosely coupled systems. Administrative Science Quarterly, 21(1), 1–19.

    Article  Google Scholar 

  • Woodruff, R. B. (1997). Customer value: the next source for competitive advantage. Journal of Academy of Marketing Science, 25(2), 139–153.

    Article  Google Scholar 

  • Wright, P., & Ferris, S. P. (1997). Research notes and communications agency conflict and corporate strategy: the effect of divestment on corporate value. Strategic Management Journal, 18, 77–83.

    Article  Google Scholar 

  • Wright, P. M., Dunford, B. B., & Snell, S. A. (2001). Human resources and the resource based view of the firm. Journal of Management, 27, 701–721.

    Article  Google Scholar 

  • Zajac, E. J., Kraatz, M. S., & Bresser, R. K. F. (2000). Modeling the dynamics of strategic fit: a normative approach to strategic change. Strategic Management Journal, 21(4), 429–453.

    Article  Google Scholar 

  • Zeithaml, V. A. (1988). Consumer perceptions of price, quality, and value: a means-end model and synthesis of evidence. Journal of Marketing, 52(3), 2–22.

    Article  Google Scholar 

  • Zhu, K. (2004). The complementarity of information technology infrastructure and e-commerce capability: a supportive capability-based assessment of their business value. Journal of Management Information Systems, 21(1), 167–202.

    Google Scholar 

Download references

Acknowledgments

The authors gratefully acknowledge the financial support of the Howard School of Business, Katz Graduate School of Business, the Terry College of Business, and the McIntire School of Commerce. We would like to thank Wayne DeSarbo for his helpful comments on an earlier version of this paper, and the editor and reviewers for their insightful comments.

Author information

Authors and Affiliations

  1. Howard School of Business, Howard University, 2600 Sixth Street, Northwest, Washington, DC, 20059, USA

    Efua Obeng

  2. Katz Graduate School of Business, University of Pittsburgh, Pittsburgh, PA, USA

    John E. Prescott & Robert Gilbert

  3. Terry College of Business, University of Georgia, Athens, GA, USA

    John Hulland

  4. McIntire School of Commerce, University of Virginia, Charlottesville, VA, USA

    James Maxham III

Authors
  1. Efua Obeng
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. John E. Prescott
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. John Hulland
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Robert Gilbert
    View author publications

    You can also search for this author in PubMed Google Scholar

  5. James Maxham III
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Efua Obeng.

Appendix

Appendix

We performed a comprehensive review of extant literature and archival records, and conducted managerial interviews. We began by reviewing pertinent literature to identify key retail capabilities and understand how they are currently conceptualized. We then interviewed retail managers and reviewed archival records (e.g., company annual reports, quarterly earnings reports) to gain additional insights. This approach allowed us to triangulate our findings, draw robust insights, and ultimately develop seven propositions that link key capabilities to superior retail performance.

Literature review

There is a growing body of research that explores the importance of resources and capabilities to firm performance and competitive advantage (e.g., Barney 1991; Capron and Hulland 1999; Day 1994; Dutta et al. 1999; Hulland et al. 2007; Krasnikov and Jayachandran 2008; Morgan et al. 2009; Teece et al. 1997), and identifies contingencies that impact a supportive capability’s value and its ability to enhance firm performance. For example, “…the value of capabilities is contingent on their effective deployment or use (Moorman and Slotegraaf 1999, p.52).”

To complement this literature, we sought to identify the resources and capabilities underlying retail success, and more importantly, to understand their interdependencies and how they complement one another (through systems) to affect long term competitive advantage. We identified relevant articles by conducting issue-by-issue text searches of academic journals, reputable business magazines, and academic books in the international business, marketing, management, information systems, and finance disciplines published since 1984. We searched for the keyword “retail” plus the words “supportive capability,” “asset,” or “capability.” This search produced thirty-one empirical and qualitative academic articles, two articles from reputable business magazines, and two academic books. The articles were drawn from the following sources: Academy of Management Review, Business Quarterly, California Management Review, Harvard Business Review, European Management Journal, Human Supportive capability Management, Information Systems Research, Journal of Consumer Marketing, Journal of Management Information Systems, Journal of Marketing, Journal of International Marketing, Journal of Management, Journal of Retailing, Management Science, Marketing Science, MIS Quarterly, Sloan Management Review, Strategic Finance, and Strategic Management Journal. This small number of published works supports our assertion that only limited research has examined the determinants of retail success.

Through our review, we were able to identify and define ten supportive and foundational capabilities postulated to be vital to retail success. Because much of this literature is descriptive and does not explicate how retail systems are built to produce competitive advantage, it mainly served to ground our system approach and identified areas requiring further clarification.

Field interviews

We interviewed fourteen senior retail managers to augment the information collected through our literature review. The interviews were held with retail managers and executives with at least regional-level managerial experience, including Executive Vice Presidents, Chief Executive Officers (CEOs), and regional managers. Four of the interviewees currently serve or served in the past on top management teams. The interviewees worked in seven companies in various functions; four held marketing positions, while the remaining ten held positions in strategic management, financial planning, and new product development. Care was taken to include personnel who worked at organizations of various sizes. Our sample also included sole proprietors and managers from both multinational and regional chains. In two cases, interviews were conducted with multiple employees from the same company. The interviews lasted about an hour and follow-up emails were sent to the interviewees when clarifications were needed. Because our sample “…reflects a diverse set of organizations, departments, and positions… [It] is well suited for obtaining a rich set of ideas and insights” (Kohli and Jaworski 1990, p. 2).

We began the interviews by introducing our research project and then administered interview protocols based on the interviewee’s sector of expertise.Footnote 1 The protocols provided guidelines but permitted deviations when necessary. For example, deviations were needed to explain concepts, expound on questions, provide examples, and generally provide more complete insights. Questions in the protocols were broken into three groups. The first sought to develop comprehensive definitions of existing supportive capabilities as well identify critical retailing supportive capabilities not previously discussed in the literature. The second set was designed to understand how supportive capabilities enable foundational ones to promote durable advantages. From these questions we gained a better understanding of the four retail capability systems, the supportive capabilities underlying each, and how each can be leveraged to achieve competitive success. These last set of questions focused in the processes to optimize retail capability systems.

Archival records

We used archival records — annual reports and quarterly earnings conference calls— to confirm and augment the findings from the interviews. We focused on bricks and mortar retailers with the highest sales in America as identified by The National Retail Federation’s 2012 Top 100 Retailers. Our sample includes publicly-traded apparel and home improvement retailers, as well as retailers in the automotive, grocery, sporting, mass discount, and shoe sectors. We view retailers on this list as industry leaders and the standard against which other retailers compare themselves. Thus, their decisions are an appropriate proxy for best practices in the retail industry. These decisions were identified by searching combinations of the following key words and their derivatives: “competitive advantage,” “competitive lift,” “core,” “decide,” “deploy,” “DNA,” “emphasize,” “employ,” “exploit,” “fundamental,” “strong,” and “value.”

We did not consider the decisions of electronic retailers (e-tailers) on the aforementioned list. Although many e-tailers are growing at extremely high rates (i.e., Amazon) and represent an important part of the retail landscape, we think that e-tailers and bricks and mortar retailers are largely driven by different supportive capabilities. This is not to say that there are no commonalities between these industries, but that fundamental differences exist between these purchasing media and these differences impact how competitive advantage is constructed in each industry (e.g., Laroche et al. 2005).

Finally, we focused on firms’ decisions between 2000 and 2013 because this period was marked by varied macroeconomic conditions (i.e., periods of growth and downturn) and extensive technological growth.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Obeng, E., Prescott, J.E., Hulland, J. et al. Retail capability systems. AMS Rev 5, 103–122 (2015). https://doi.org/10.1007/s13162-015-0067-7

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s13162-015-0067-7

Keywords

Search

Navigation