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Entrepreneurial Intention vs. Reality: A Study in German Wholesale

Authors:
  • Ferdinand-Steinbeis-Institut
  • Ferdinand-Steinbeis-Institut
  • Ferdinand-Steinbeis-Institut
  • Ferdinand Steinbeis Institut

Abstract

As a part of the German Mittelstand and one essential link in the supply chain of many national and international industries German, wholesale plays an important role in the German economy with a total revenue of 1,300 bn. € in the pre-COVID-19 year of 2019 (Statistisches Bundesamt 2022). Traditionally, a wholesaler purchases and resells products in large numbers in a B2B context (Ausschuss für Definitionen 2006). Entrepreneurial activities – the identification and exploitation of business opportunities by individuals and organizations (Schumpeter 1939) – in wholesale focus on adapting to changes in the supply situation or complementing the products via services. However, recent crises (COVID-19, and the war in the Ukraine) as well as market developments driven by digital technologies to the disadvantages of wholesaler, for example new B2B competition via platforms like Amazon or direct sales by original equipment manufacturers (Gassmann and Sutter 2019) will have consequences in the entrepreneurial intentions and actions of wholesale companies. In 2018 and 2019 we conducted a series of interviews with wholesalers from different economic sectors (Weber et al. 2019). These interviews were the core of a study focusing the business capabilities and value creation in networks. The 13 interviewees were all members of a wholesale association in south-western Germany. Due to the General Data Protection Regulations (GDPR) by the European Union, the interviewees were selected by the association under several conditions provided by the study management for a high variance of wholesaling companies (for example, number of employees, annually revenue and economic sector). The interviews were partly structured with a partly standardized guideline. In the interviews the interviewees were confronted by a statement of a painter quoted from an interview of a newspaper’s online edition. The painter was quoted that his business will change and, analogously, the wholesale business will also change. This quote by a wholesale customer enabled the opportunity for an affective answer on the entrepreneurial intentions of the interviewed wholesale CEOs and board members. The aim of the hermeneutical analysis of the interviews was to identify different transformation directions of wholesalers. In the process of forming the transformation directions, it became clear that they can be structured on the basis of the dimensions market and cooperation.
Entrepreneurial Intention vs. Reality: A Study in German Wholesale
Alexander Neffa*; Patrick Webera; Daniel Werthb; Tanja Würthnerb
aFerdinand Steinbeis Institute, Stuttgart, Germany
bFerdinand Steinbeis Institute, Heilbronn, Germany
*alexander.neff@ferdinand-steinbeis-institut.de
Keywords: Entrepreneurship, Wholesale, Small and Medium Enterprises (SME), Business Transformation,
Value Adding Networks
Abstract: As a part of the German Mittelstand and one essential link in the supply chain of many national
and international industries German, wholesale plays an important role in the German economy with a total
revenue of 1,300 bn. € in the pre-COVID-19 year of 2019 (Statistisches Bundesamt 2022). Traditionally, a
wholesaler purchases and resells products in large numbers in a B2B context (Ausschuss für Definitionen
2006).
Entrepreneurial activities the identification and exploitation of business opportunities by individuals and
organizations (Schumpeter 1939) in wholesale focus on adapting to changes in the supply situation or
complementing the products via services. However, recent crises (COVID-19, and the war in the Ukraine)
as well as market developments driven by digital technologies to the disadvantages of wholesaler, for
example new B2B competition via platforms like Amazon or direct sales by original equipment
manufacturers (Gassmann and Sutter 2019) will have consequences in the entrepreneurial intentions and
actions of wholesale companies.
In 2018 and 2019 we conducted a series of interviews with wholesalers from different economic sectors
(Weber et al. 2019). These interviews were the core of a study focusing the business capabilities and value
creation in networks. The 13 interviewees were all members of a wholesale association in south-western
Germany. Due to the General Data Protection Regulations (GDPR) by the European Union, the interviewees
were selected by the association under several conditions provided by the study management for a high
variance of wholesaling companies (for example, number of employees, annually revenue and economic
sector). The interviews were partly structured with a partly standardized guideline. In the interviews the
interviewees were confronted by a statement of a painter quoted from an interview of a newspaper’s online
edition. The painter was quoted that his business will change and, analogously, the wholesale business will
also change. This quote by a wholesale customer enabled the opportunity for an affective answer on the
entrepreneurial intentions of the interviewed wholesale CEOs and board members.
The aim of the hermeneutical analysis of the interviews was to identify different transformation directions of
wholesalers. In the process of forming the transformation directions, it became clear that they can be
structured on the basis of the dimensions market and cooperation.
The categorized results are shown in Figure 1. This figure illustrates that the intentions are divided in four
different directions: (1) no to low collaboration in the familiar market, (2) high collaboration in the familiar
markets, (3) no to low collaboration in unfamiliar markets, (4) high collaboration in unfamiliar markets.
Eight interviewees show entrepreneurial intentions in familiar markets (1+2). While four of them only see
small adjustments for their entrepreneurial future (1), the other four have the intention to advance their
collaborations with old and new partners in value adding networks (2). The collaboration of partners enables
companies to create new business models through the interaction of their capabilities (Moore 1993). Two of
the latter even intent to collaborate with competitors. The other five of the interviewees intent to take
entrepreneurial action in unfamiliar markets (3+4). Two wholesalers see the advantages of digital
entrepreneurship (Kraus et al. 2018) by using modern technologies to create services for new costumers and
even private consumer (3). The last group intent to use partners and digital technologies in elaborated
networks to develop new business models (Mazhelis et al. 2012) (4). The assignment of the interviewees
entrepreneurial intentions is illustrated in the following figure. Their precise position within the direction
transformation fields are alphabetical arranged with no further assumption.
Figure 1: Transformation directions of wholesale company
The four transformation directions show that the interviewed wholesale companies have widely differing
positions in terms of entrepreneurship. The majority of the wholesale companies in fields 2, 3 and 4 show
that they have concrete approaches to designing new business models. The design of value-added networks
(2+4) is especially relevant in this context of developing new business models. The evaluation showed that
the majority of interviewed wholesalers already have a concrete roadmap for how the transformation should
be designed in their company.
During the summer of 2022 a second series of interviews will be conducted with the wholesalers who already
participated in the study of 2018/19. This series has two goals: the interviewees will be confronted with their
entrepreneurial intentions of 2018/19 on how they translated them into reality (1). The second goal will
provide insights on their entrepreneurial intentions for the upcoming years (2). We expect responses to (1)
will provide us further insights about the different or equal challenges and learnings towards the four different
directions of entrepreneurial intentions and the translation into reality. Since entrepreneurial actions always
carry a risk, we will review with the interviews if they are willing to take these risks again. Regarding (2) our
efforts are to start a longitudinal study in accompanying the wholesalers in their entrepreneurial journey. The
present results of the first data collection already shows a wide range of entrepreneurial intentions in German
wholesale. The second interview series will show if and how deep the gap between intention and reality is
especially during a period of two crises.
References
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Kraus, S., Palmer, C., Kailer, N., Kallinger, F. L., Spitzer, J. (2018). Digital entrepreneurship: A
research agenda on new business models for the twenty-first century. International Journal of
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Mazhelis, O.; Luoma, E.; Warma, H. (2012): Defining an internet-of-things ecosystem. In: Internet of Things,
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Moore, J. F. (1993): Predators and prey: a new ecology of competition. Harvard business review 71.3,
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ResearchGate has not been able to resolve any citations for this publication.
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Defining an internet-of-things ecosystem
  • O Mazhelis
  • E Luoma
  • H Warma
Mazhelis, O.; Luoma, E.; Warma, H. (2012): Defining an internet-of-things ecosystem. In: Internet of Things, Smart Spaces, and Next Generation Networking: Springer, S. 1-14.