Researches regarding the development of strategic advantages in the retail industry have revealed significant information about the successful strategies used by the various retailers. The results of a survey conducted by Baron et al, (2001) across the UK provided insight on how the majority the companies operating in the food, grocery based retail sector have achieved competitive advantage through the use of a convenience format.
The survey provided that “the provision of a ‘social shopping experience’ emerged as a key competitive advantage that could be developed. Improving vertical and horizontal trading alliances, and the wider use of information technology, provided other options.” (Baron et al, 2001) Another research conducted by Dirk Morschett, Bernhard Swoboda and Hanna Schramm-Klein developed a framework that provided strategies for being competitive in the industry of food retail. The research provided that “three basic types of competitive advantage seem to prevail in food retailing: (1) price, (2) quality (with a comprehensive set of quality-orientated instruments, including customer service), (3) convenience” (Morschett et al, 2006). Furthermore strategic advantage can also by retailers by adopting the franchise format of operations. “A study of franchise life cycle within the fast food industry reveals that the contractual agreement is a major source of competitive advantage. It is further revealed that franchisee motivation is a major source of competitive advantage during every stage of the life cycle.” (Lillis et al, 1976) Other competitive advantages that can be achieved using a similar format of operations pertain to risk sharing, market penetration and the competitive advantage of entry capital.