Toward a New Framework of Competitive Advantage for Small-Scale Regional Enterprises

Toward a New Framework of Competitive Advantage for Small-Scale Regional Enterprises

Associate Professor (Entrepreneurship)
SUGAOI Tatsuhito

Small-scale local businesses in local areas are facing challenges due to population decline and shrinking markets. The nationwide closure rate of such businesses is on the rise, posing a significant issue for the sustainability of regional economies. Traditionally, business owner's leadership and utilization of regional resources have been considered key success factors. However, these factors are often dependent on individuals, easily imitated, and thus have limitations in establishing long-term competitive advantages.

In my research, I analyze small-scale businesses in the Tohoku region and propose new success factors. Specifically, these include: (1) ensuring psychological safety among same-generation and same-gender peers, (2) natural generation of customer referrals through the adjacent placement of non-competing businesses, and (3) optimizing the physical business environment via build-to-suit spatial design. I am exploring how mutual support through these elements can form the foundation for sustainable growth.

Additionally, as an international case study, I study the case from The International School of Asia, Koh Lanta, a school offering education from kindergarten through high school on Koh Lanta Island, Thailand. I lived on the island for two years and contributed hands-on to the business growth of this school. The success factors identified here provide valuable insights for discussing business advantages in local areas and offer suggestions that may benefit small businesses in the local area of Japan.

▲BTS-type facility

▲A school on Koh Lanta, Thailand