Passion Driven Companies in a Profit Driven Industry : A qualitative study on how craft entrepreneurs’ motivations affect their perception of competitive strategy

Abstract: The microbrewery industry is the fastest growing industry in Sweden. In seven years, the industry has grown by 832 percent. The dramatic increase of microbreweries has led to a highly competitive business environment for these entrepreneurs. This calls for microbreweries to develop strategies for how to stand out in this increasingly competitive environment, i.e., create competitive advantages. However, previous studies have shown that craft entrepreneurs do not strive to achieve traditional economic objectives as the competitive strategy research field suggest that companies have. Hence, traditional competitive strategies may not be applicable for these entrepreneurs. The purpose of this study was therefore to develop an understanding how motivational factors affect craft entrepreneurs’ competitive strategy. To fulfill the purpose, we conducted a case study on microbrewers within the northern region of Sweden. We used a qualitative research methodology where we conducted semi-structured interviews. Seven microbreweries participated in the study. We found that craft entrepreneurs’ motivations for why they started and maintained their microbreweries were mainly because of their passion and interest for the craft and therefore this was their primary objective. However, they perceived profit as a necessity that would enable them to achieve their primary objective. Therefore, we found that these entrepreneurs have dual objectives. We also found that entrepreneurs’ motivations affected their competitive strategies. These entrepreneur’s dual objectives caused some dilemmas when the two objectives contrasted each other. We saw tendencies that this created tension among these entrepreneurs when they had to balance the two objectives of generating profit and achieving objectives related to their passion and interest for the craft. Further, we found that these tensions caused implications on the entrepreneurs’ perception of competitive strategy.  Their perception of competitive strategy differed from traditional theory in three areas. Firstly, they had a resistance to grow their businesses. Secondly, they had a resistance for product/market development. And lastly, they experienced a low level of ambiguity when competing and cooperating simultaneously. In this study, we have been able to deepen the knowledge of craft entrepreneurs and how their motivations affect their competitive strategy. This is a first step in developing an understanding of how additional objectives to profit can cause implications for competitiveness.