eCommerce and the competitiveness of small enterprises: A study of the restaurant industry

eCommerce can provide competitive advantage both by enhancing efficiency and helping an enterprise differentiate itself in the market. These forms of advantage apply differently according to industry sector and the size of the enterprise. This paper reports a study of one such industry sector, that of small, owner-operated restaurants within the larger hospitality industry. Drawing on two theoretical approaches to business competition and trends in consumer behaviour, we present a framework for understanding the advantages eCommerce offers to small restaurants and the broader implications of applying technology to businesses that are often still run on traditional lines. Theories of competitive advantage and consumption trends suggest that the primary potential of eCommerce for these restaurants is as a support for distinctiveness and differentiation rather than efficiency gains. However, the study found that while the small restaurant owners tended to identify potential efficiency gains from eCommerce, they relied on traditional business practices to differentiate themselves in the market. These considerations are relevant for the future development of eCommerce applications and systems designed for small businesses supplying services.