Resource advantage theory and fair trade social enterprises created by Bob Doherty.

This paper will investigate the competitive position of both fair trade (FT) social enterprises Divine Chocolate Ltd (Divine) and Cafédirect in their respective UK markets, namely chocolate confectionery and hot beverages. Using K.A. Eisenhardt's approach to building theory from multiple case studies, this four-year study aims to identify the resources that enable FT social enterprises to compete. This research draws on recent developments in competition theory such as resource advantage theory (R-A theory), termed a general theory of competition. The paper will critically analyse if the social and ethical elements of these firm's product offerings really constitute meaningful differentiators (i.e. comparative advantage) as required by R-A theory. S.D. Hunt and C. Derozier argue that R-A theory can ground theories of business and marketing strategy and therefore identifying the competitive resources of FT social enterprises will have important strategic implications. The research findings show that both Divine and Cafédirect have established a mainstream competitive position in specific product segments and distribution channels. The key theoretical contribution validates ‘social resources’ and its three inter-related components: ethical and social commitments; connections with partners; and consistency of behaviour as a resource to extend R-A theory.