Small Firms’ Tactics in a Mature Industry

Mature industries are characterised by static or declining sales, low average margins and intense competition between firms for market share. This paper develops a typology of strategic options for small firms in the furniture industry and examines the extent to which firms are adopting simple or complex strategies. Empirical analysis is based on data from 39 firms with between 10 and 100 employees in the Irish furniture industry. Three main results emerge from the analysis. First, there is some support for the suggestion that firms in mature industries such as furniture tend to adopt simple business development strategies. Second, in terms of strategy success, we find no evidence that simple strategies unambiguously out-perform more complex approaches. Instead, the success of either a simple or complex business strategy is directly related to the strength of firms’ resource base. Finally, marked differences were found in firms' ability or willingness to re-engineer their strategies in the light of their experience.