Sustainable Competitive Advantage for Multi-Unit Franchising: From the Taiwanese Franchise Market Perspectives

Abstract

Franchising is a widely adopted business format in both product-based and service-based industries. Particularly, the concept of multi-unit franchising has become increasingly prominent as a favored expansion strategy for both franchisors and franchisees. To sustain a competitive advantage, it is crucial for franchisees to establish a network of local outlets. This study delves into the strategies employed by multi-unit franchisees in the Taiwanese estate agency sector, using the theory of sustainable competitive advantage as a framework. The research design for this study is qualitative, employing in-depth interviews as the primary method of data collection, with grounded theory used for analysis. The findings reveal that ownership patterns play a crucial role in determining sustainable competitive advantage. Furthermore, the existence of both explorative and exploitative capabilities was identified as the foundation for establishing local leadership and ensuring a sustainable advantage. Importantly, sustainable competitive advantage is achieved through the local leader determinant. As a result, four propositions have been developed, which hold essential practical implications for top managers. Especially in the digital era, information asymmetry is diminishing, and cooperation becomes the key to creating synergies.