Resource Bootstrapping and Bricolage - A Solution to Overcome the Effects of Liability of Smallness in Retail formats - An Analysis

Every business is unique in terms of their potential to acquire, utilize and generate return from the resources available. This is critical for small firms when their resources become limited and inadequate. Though small and big firms coexist in the market, they vary in the rate at which the resources are transformed to measurable outputs. They respond to the same economic parameter in different ways. The profitability of a retail firm depends on two factors – Daily sale and trade profit. Two types of attributes of retail formats – establishment attributes (age, size and location of the shop) and strategic attributes (source of funds, capital structure, rented or own, credit sale, door delivery and tax commitment) are considered to compare the profitability of shops. The analysis shows that resource bootstrapping helps the firms to enhance their profitability.