The Changing Structure of Retail Industry: Case Studies on Competitive Advantage of Small Companies in Croatia


Objective: There are two key trends in retail industry since 1990s till nowadays: rapid internationalization and intensive retail concentration. In such a dynamic environment, small companies are striving to preserve their markets and to maintain their business activity. The objectives of the paper are twofold: (1) to explain trends of retail internationalization and concentration and (2) to highlight the possibilities for improving the competitive ability of small retailers.

Research, Design & Methods: The paper is based on analysis of secondary data available in research papers, studies and official statistics. Firstly, the consequences of retail internationalization and concentration are described. Then, the literature on competitive advantage creation is systemized. In addition, the case study method is used to illustrate successful strategies of competitive advantage creation.

Findings: In a changed retail market, small retailers seek the way to improve their competitiveness. As suitable competitiveness strategies, authors describe: (1) retail alliances and (2) differentiation by assortment.

Implications & Recommendations: The key trends and their impact on small companies in retail industry are scrutinized. Recommendations to small retailers how to adjust to new market conditions, together with some practical examples, are given.

Contribution & Value Added:
The paper gives an insight into dynamics of changes in retail structure. Retail alliances and differentiation by assortment are described as two key streams of competitiveness improvement suitable for small retailers.



retail industry; retail; trends; retail internationalization; retail concentration; market structure; competitiveness; small retailers

Alexander, N. (1996). International Retail Expansion within the EU and NAFTA. European Business Review, 95(3), 23-35.

Allen, R.S., & Helms, M.M. (2006). Linking strategic practices and organizational performance to Porter's generic strategies. Business Process Management Journal, 12(4), 433-454.

Barney, J.B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.

Barney, J.B. (2001). Resource-based theories of competitive advantage: A ten-year retrospective on the resource-base view. Journal of Management, 27(6), 643-650.

Coates, T.T., & McDermott M.C. (2002). An exploratory analysis of new competencies: a resource based view perspective. Journal of Operation Management, 20(5), 435-450.

Dawson, J. (2001). Strategy and Opportunism in European Retail Internationalization. British Jour-nal of Management, (12), 253-266.

Dawson, J. (2006). Retail Trends in Europe. In M. Kraft & M.K. Mantrala (Eds.), Retailing in the 21st Century (pp. 41-58). Berlin: Springer.

Dawson, J., & Mukoyama, M. (2006). The increase of international activity by retailers. In J. Dawson, R. Larke & M. Mukoyama (Eds.), Strategic issues in International Retailing

(pp. 1-30). Abingdon: Routledge.

European Commission (2014). The Economic impact of modern retail on choice and innovation in the EU food sector. Retrieved on December 8, 2015 from

Gilbert, D. (2003). Retail Marketing Management. Glasgow: Pearson Education Limited.

Habbershon, T.G., & Williams, M.L. (1999). A Resource-Based Framework for Assessing the Strategic Advantages of Family Firms. Family Business Review, 12(1), 1-25.

Hamel, G., & Prahalad, C.K. (1994). Competing for the future: breakthrough strategies for seizing control of your industry and creating markets for tomorrow. Boston, MA: Harvard Business School Press.

Ibrahim, A.B. (2015). Strategy Types and Small Firms' Performance An Empirical Investigation. Journal of Small Business Strategy, 4(1), 13-22.

Ibrahim, A.B., & Goodwin, J.R. (1986). Perceived causes of success in small business. American Journal of Small Business, 11(2), 41-50.

Kamasak, R. (2013). Resource-Based View (RBV) in all its aspects. Why some firms outperform others?. Germany: Scholar's Press.

Kent, T., & Omar, O. (2003). Retailing. New York: Palgrave Macmillan.

Knego, N., & Knežević, B. (2011). The Position of Small Retailers in Croatia on the Verge of Entering the European Union. In Proceedings of 8th International Conference “Economic Integration, Competition and Cooperation”, 6-9 April, Opatija, University of Rijeka – Faculty of Economics. Retrieved on December 8, 2015 from

Knežević, B, & Szarucki, M. (2013). Internationalization of Retail in Poland and Croatia. In S. Renko & B. Knežević (Eds.), Challenges for the Trade of Central and Southeast Europe (pp. 1-18). Bingley, UK: Emerald Publishing.

Knežević, B.,& Delic, M., & Knego, N. (2014). The Retail Internationalization in Visegrad Countries and Croatia. In K. Wach & B. Knežević (Eds.), International Business from the Central European Perspective (pp. 113-128). Zagreb: University of Zagreb.

Knežević, B., Knego, N., & Delić, M. (2014). The Retail Concentration and Changes of the Grocery Retail Structure. InterEULawEast, 1(2), 37-51.

Knežević, B., Renko, S., & Knego, N. (2011). Changes in Retail industry in EU. Business, Manage-ment and Education, 9(1), 34-49.

Kotler, P. (1997). Marketing Management: Analysis, Planning, Implementation, and Control. Eng-lewood Cliffs, NJ: Prentice Hall.

Lazauskas, J., Bureika, G., Valiūnas, V., Pečeliūnas, R., Matijošius, J., & Nagurnas, S. (2012). The research on competitiveness of road transport enterprises: Lithuanian case. Transport and Telecommunication, 13(2), 138-147.

Li, S., Ragu-Nathan, B., Ragu-Nathan, T.S., & Rao, S. (2006). The impact of supply chain manage-ment practices on competitive advantage and organizational performance. Omega, 34(2), 107-124.

Liebmann, H-P., & Zentes, J. (2001). Handelsmanagement. München: Verlag Franz Vahlen.

Lockett, A., Thompson, S., & Morgenstern, U. (2009). The development of the resource-based view of the firm: A critical appraisal. International Journal of Management Reviews, 11(1), 9-28.

Miles, R.E., Snow, C.C., Meyer, A.D., & Coleman, H.J. (1978). Organizational strategy, structure, and process. Academy of Management Review, 3(3), 546-562.

Murray, A.I. (1988). A contingency view of Porter's "generic strategies". The Academy of Management Review, 13(3), 390-400.

Pan, F., & Nagi, R. (2009). Robust supply chain design under uncertain demand in agile manufacturing. Computers & operations research, 37(4), 668-683.

Porter, M.E. (1985). Competitive Advantage. New York: Free Press.

Porter, M.E. (2008). Konkurentska prednost, Postizanje i održavanja vrhuskog poslovanja. Zagreb: Masmedia Zagreb: Masmedia. Poslovna Hrvatska (2015). Annual financial statements of the selected companies for 2014. Retrieved on December 22, 2015 from

Rexhepi, P., & Stringa, O. (2010). How Multinational Companies (MNCs) Implement Cost Strategies at airline and Retail Supermarket Industry in Albania. Retrieved on 29 January 2016 from

Rugman, A.M., & Verbeke, A. (1988). Does competitive strategy work for small business? Journal of Small Business & Entrepreneurship, 5(3), 45-50.

Simonson, I. (1999). The effect of product assortment on buyer preferences. Journal of Retailing, 75(3), 347-370.

Soy, S. (1997). The case study as a research method. Retrieved on May 12, 2016 from

Stassen, R.E., Mittelstaedt, J.D., & Mittelstaedt, R.A. (1999). Assortment overlap: its effect on shopping patterns in a retail market when the distributions of prices and goods are known. Journal of Retailing, 75(3), 371-386.

Stoner, C.R. (1987). Distinctive competence and competitive advantage. Journal of Small Business Management, 25(2), 33.

Tietz, B. (1993). Der Handelsbetrieb. Grundlagen der Unternehmenspolitik. Munchen: Verlag Franz Vahlen.

Tipurić,, D. (1999). Konkurentska sposobnost poduzeća. Zagreb: Sinergija nakladništv d.o.o.

Tordjman, A. (1995). European Retailing: convergences, differences and perspectives. In P.J. McGoldrick & G. Davies (Eds.), International Retailing (pp. 17-42). London: Pitman Publishing.

Vordoljak Raguž, I., Jelenc, L., & Podrug, N. (2013).

Izvori konkurentske prednosti u XXI. stoljeću. Dubrovnik: Sveučilište u Dubrovniku.

Wach, K. (2014a). International Strategies of Businesses: Some Evidence from Internationalised Polish Firms (Chapter 3). In A.S. Gubik & K. Wach (Eds.), International Entrepreneurship and Corporate Growth in Visegrad Countries (pp. 101-124). Miskolc: University of Miskolc.

Wach, K. (2014b). The Theoretical Modelling of the Firm-Level International Competitiveness in Business Studies (Chapter 5) In D. Kiendl-Wendner & K. Wach (Eds.), International Competi-tiveness in Visegrad Countries: Macro and Micro Perspectives (pp. 41-56). Graz: Fachhochschule Joanneum.

Wortmann, M. (2003). Strukturwandel und Globalisierung des deutschen Einzelhandel. WZB Discussion Paper. Berlin: WZB – Wissenschaftszentrum Berlin für Sozialforschung.

Wright, P. (1987). A refinement of Porter's strategies. Strategic Management Journal, 8(1), 93-101.

Yin, R.K. (2013). Case study research: Design and methods. London: Sage Publications.

Knežević, B., Naletina, D., & Damić, M. (2016). The Changing Structure of Retail Industry: Case Studies on Competitive Advantage of Small Companies in Croatia. Entrepreneurial Business and Economics Review, 4(4), 171-187.

Blaženka Knežević
University of Zagreb, Faculty of Economics and Business, Department of Trade - Zagreb  Croatia
Izv. prof. dr. sc. Blaženka Knežević is the Associate Professor at The Department of Trade (Faculty of Economics and Business, University of Zagreb, Croatia). She holds a Ph.D. in Business Administration. She did her PhD dissertation on Importance of knowledge in value creation in trade and a Master degree on electronic office procedures in retail companies. She teaches several graduate and post-graduate courses: Retail information systems; Economics of electronic commerce; Trade and trade policy; Procurement management; Supplier Relationship Management and Business Excellence. She is a researcher on several scientific research projects funded by Ministry of Science of Croatia and a team member of several professional research projects. She is a member of the editorial board of the Business Excellence Journal. She is author and editor of several scientific books. She has published numerous papers at conference proceedings, books and academic journals.
Dora Naletina 
University of Zagreb, Faculty of Economics and Business, Department of Trade - Zagreb  Croatia

PhD in Economics and Business by the Faculty of Economics and Business, University of Zagreb (Croatia)

Mate Damić 
University of Zagreb, Faculty of Economics and Business, Department of Trade - Zagreb  Croatia

Master in Finance (University of Zagreb, Faculty of Economics and Business, Zagreb, Croatia); PhD student in Economics and Business (University of Zagreb, Faculty of Economics and Business Administration, Zagreb, Croatia) 

CitedBy Crossref

CitedBy Scopus

Authors who publish with this journal agree to the following terms:

  1. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a CC BY-ND licence that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
  2. Authors are asked to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.

 Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access). We advise to use any of the following reserach society portals: