The purpose of this paper is to shift the idea of competitive strategy from the for-profit to the non-profit context and to explain how social enterprises (SEs) get advantages over competitors within and outside the social sector.
Based upon a sample of 63 SEs located in Greece, the exploratory research employs factor analysis to answer which strategic options they have to compete. Subsequent analysis of variance and correlation analysis were performed to answer if competitive strategic options relate to impact SEs generate.
The empirical findings identify and empirically validate a variety of strategic options based on four pure (low cost, low cost sustainability, low cost focus and differentiation focus) and one hybrid (efficient differentiation) types of competitive advantage. Additional evidence shows that hybrid compared to pure strategic options link more influentially to impact in terms of positive environmental, social and economic contributions.
Apart from providing some explanations of how mission-driven businesses compete, it helps widening the debate of pure vs hybrid strategies beyond the commercial sector. Contrary to what the authors already know, the evidence presented here shows that strategic purity and hybridization co-exist in the social sector.
This is the first study with empirical evidence on competitive strategies from businesses in the third sector emphasizing how SEs ensure competitive advantage along with impact potential. Consequently, the authors respond to recent calls for more survey-based, quantitative evidence in the social entrepreneurship field.
