Answer to Question #322487 in Management for Solo

Question

What are the sources of competitive advantage of family businesses? What are the unique resources of

Bikanervala as a family business, and how do these translate into a competitive advantage?

Answer 1

Family businesses often rely on the family as a source of capital for funding business activities, which has often been cited as a significant competitive advantage, especially when times are tough and funding is tight. Key employees Key employees (non-family) appreciate and enjoy the unique work environment created by a family in business.

Bikanervala was a fourth-generation Indian family business in the domestic fast-food and packaged-snacks industries. In its 65 years of existence, it had grown from a small outlet selling traditional Indian sweets and snacks to the industry’s second-largest player. This case traces the evolution of Bikanervala’s business model, which uniquely leveraged professional management practices along with strengths rooted in its family values. As the business expanded, Bikanervala faced further pressures to professionalize on several fronts, and the family was forced to consider whether its family-oriented management style could scale up indefinitely or whether family ownership and management had to be diluted to grow the business.

Family loyalty: Family members in business may demonstrate a greater sense of loyalty to each other and to the business. Family members may also tend to be more committed to the success of the business and are more passionate about what the business stands for.

Legacy: Families in business have an opportunity to create a lasting legacy that can provide a sense of accomplishment and pride. Subsequent generations may be strongly motivated to build on the efforts of their forefathers and become stewards of the family business and carry it to new heights in the name of the family.