Abstract
Small businesses are globally recognised as vital drivers of economic development, employment creation, and innovation. In South Africa, small and medium enterprises constitute approximately 91% of formal business entities, contribute around 40% to the country’s Gross Domestic Product (GDP), and provide nearly 87% of employment. Despite their significant economic contribution, small businesses face multifaceted challenges, including restricted market access, intense competition from larger corporations, pricing pressures, regulatory constraints, and limited financial resources. While numerous studies have examined competition between large corporations at national and international levels, limited research has explored how small businesses specifically manage competitive pressures within local market contexts. This gap in the literature, combined with the unique socio-economic dynamics of Johannesburg’s diverse communities, necessitates an investigation into the specific mechanisms through which small businesses create and sustain competitive advantages in local markets.
This study explored how small businesses in the local markets of the Johannesburg metropolitan area navigate competition and build sustainable competitive advantages. An interpretivist research paradigm with qualitative methodology was employed, using semi-structured interviews with 15 purposively sampled small business owners across various sectors. Data were analysed using Braun and Clarke’s six-step thematic analysis approach, facilitated by ATLAS.ti software. Six major themes emerged: (1) Market Challenges Faced by Small Businesses in Local Competition; (2) Strategies for Building and Sustaining Competitive Advantage; (3) Competitive Advantage Implementation; (4) Innovation and Differentiation as Competitive Strategy; (5) Customer Relationship Management as Competitive Strategy; and (6) Community Engagement as Strategic Competitive Asset.
The findings reveal that sustainable competitive advantage emerges through integrated strategic approaches rather than isolated capabilities. Pricing challenges emerged as the most significant competitive pressure, yet successful businesses transformed this constraint through value-based pricing models. Customer service excellence and relationship building were identified as the most effective competitive...