Does Size Matter? An Empirical Investigation into the Competitive Strategies of the Small Firm

This paper examines whether different strategies are associated with different sized firms in a focal industry dominated by small family-owned businesses. In an effort to shed light on how strategic choice is determined, a well-defined and geographically concentrated industry, i.e., the Northern California wine industry, is selected to minimize environmental noise. Factor analysis is applied to fourteen strategic elements to extract a parsimonious set of five primary competitive strategies: new product/market development, consolidation, niche focus, proprietary processes, and flexibility. The factors, new product/market development and consolidation as well as the control variable, age, are found to be significantly associated with firm size.