Entrepreneurial Orientation in Marketing: An empirical study of small businesses in the Swedish fashion industry

Abstract: Entrepreneurial orientation (EO) can be defined as strategic processes encouraging entrepreneurial actions to support businesses in recognizing and exploiting new opportunities. Previous studies have shown that businesses with higher levels of EO, characterized through actions that are innovative, proactive and risk-affine, perform better than the ones that lack such orientation. Therefore, EO is considered to be a crucial aspect when businesses seek to gain a competitive advantage. Little has been investigated by using an approach that combines EO literature with regards to marketing activities, and therefore this study contributes to the research field by applying EO theory in marketing context. The study employs three core elements of EO as a framework to analyze small businesses’ marketing activities and related competitiveness. The study applies a qualitative approach of analysis and conducts semi-structured interviews with four small businesses owners within the Swedish fashion industry to collect data. The three sub-dimensions of EO were found to be highly related to each other, which means that all of them were encouraged with regard to the firm's marketing activities in order to enforce a competitive advantage. The results also show that businesses in the fashion industry mainly concentrate on product and market innovation, whereas administrative innovation was not encouraged in any of the cases. More specifically, introducing new concepts, experimenting with marketing activities, entering new markets, building a relationship to customers, adapting alternative distribution and supply channels were the key activities that increased a competitive advantage. An unexpected outcome was that small businesses in the Swedish fashion industry actually tend to cooperate with their competitors and form strategic alliances in order to benefit from economies of scale, share industry experiences, as well as understand and satisfy latent customer needs, and therefore overcome liability of smallness. This paper also contributes to the research field by advancing EO theory, i.e. incorporating two new strategic actions: building a relationship to customer and full control of the production process, which were not previously discussed in EO literature. Additionally, this study provides the Entrepreneurial oriented marketing model, which contributes not only for small businesses within the fashion industry, but also indulges a better understanding what issues are important when seeking to gain a competitive advantage through the use of entrepreneurial orientation in marketing activities.