Doing Social good on a sustainable basis: Competitive advantage of social businesses

Abstract

The paper is aimed at investigating the capabilities of social entrepreneurship (SE) firms and how they achieve competitive advantage while engaging in social value creation. We employ a business model perspective to understand the (self-) sustaining mechanism for social good. We carry out an in-depth investigation of three social entrepreneurship (SE) ventures. We analyze the history of these ventures to determine how they achieved competitive advantage. The cases are analysed based on the internal development in the context of environmental support. We find that SE ventures, like all other organizations, achieve competitive advantage based on available resources such as reputation and network of the founder, managerial experience and other corporate resources within the firm. We also find that the competitive advantage often comes from innovate usage – a practice that is reinforced by the support from institutional environment. Based on our analysis, we conclude that distinct capabilities of social businesses help them achieve competitive advantage, and that policy makers should institutionally support these ventures. Our application of a business model perspective in social entrepreneurship is unique, and advances the understanding of social businesses from a strategic management perspective.