How May Small Family Businesses Compete Through Tacit Knowledge?

Despite the reported decline of small retail businesses in Western Europe, these businesses still seem to compete and thrive in many urban areas. We explore this puzzle by assessing the closeness of perceptions between managers and customers of two small family-owned and managed businesses ("FBs") and two larger non-FBs in Sardinia, Italy. Located in the literature on customer relations management ("CRM"), the study extends CRM studies to small High Street FBs by explaining how these businesses have continued to compete and thrive by leveraging their well-developed tacit knowledge of a small number of repeat customers. Our findings have scholarly and managerial implications in the way that both FBs and non-FBs may gain and keep customers by anticipating and not merely responding to their requirements