Research On Sustainable Growth Of Retail Enterprises Based On Resource-based Theory

With the deepening of economic reform and upgraded circulation system,coupled with increased consumer spending and structured change on consumerconsumption pattern, China’s retail industry has evolved into a brand new phasecharacterized by significant scale with new structure, business models andcompetitive landscape. Distinguished by the way retail is conducted, China’s currentretail can be divided into nine categories (business model): department stores,supermarkets, convenience stores, specialty stores, specialty stores, shopping centers,large-scale comprehensive supermarkets, warehouse stores and online retail (e-commerce), among which specialty stores, large-scale comprehensive supermarketsand warehouse stores have been developing rapidly in recent years. Online retail (e-commerce) is relatively new to the market and has been in the spotlight, for which ithas brought new thoughts and idea to the retail industry and is overtaking traditionalretail as the mainstream in the consumer place. Nowadays, China’s retail industry isexperiencing several transformations, from the traditional to the modern departmentstore merchandise, from department store to themed retail, from standalone operationto franchise and chain operation, from offline sales to online purchase, which hasresulted a new industry phenomenon of multiple retail concepts interacting andcoexistence and rapid development of brand new business models.Wernerfelt’s work in1984marked the birth of enterprise resource-based theory.Subsequently Barney (1991) further developed the resource-based theory byproviding a solid foundation. Since then the enterprise resource-based theory has beenwidely researched in academia and applied in corporate strategic managementdiscipline, which has a profound implication in researching other related areas.Chian’s reform has given birth to Chinese modern retail enterprises. Those retailenterprises have benefited from its flexibility, market knowledge&insights, greateradaptability, and are able to grow in the increasingly competitive marketplace.However on the other hand, there are a number of retail enterprises, which have losttheir momentum in the competition with slowed growth or even contraction andfailures. The different fates of those retail businesses have prompted the question aswhy certain retail business could thrive and others would demise at the backdrop ofsame market conditions? What kinds of factors have contributed to the success ofthose enterprises? What kinds of factors have caused the failures? Business growth theory, in particular sustainable growth theory has profoundimplications for both academia and industry. Both domestic and foreign scholars havestudies the business growth theory from multiple perspectives, among which internalfactor growth theory suggests business internal factors are key determining factors forthe overall business success. Internal resources and competences are regarded as thekey enabling factors determining the business overall success. The ability of businessprocuring and possessing key resources and operational excellence are the two corecompetences of a business, which to certain extent defines the competitive advantageof a business. In another words, the sustainable growth of business is determined bybusiness’ competitive advantages, which are derived from its core competences. Theformation of core competences depends on if the business has the ability to optimizeinternal and external resources, the deployment and strategic alignment of thoseresources. This paper is designed to study the impact of resource-based theory onretail enterprises’ sustainable growth with an aim of identifying key success factor ofthose retail businesses with sustainable growth, therefore offering key insights andadvises on retail business’ sustainable growth.