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Both industrial organization theory (IO) and the resource‐based view of the firm (RBV) have advanced our understanding of the antecedents of competitive advantage but few have attempted to verify the outcome variables of competitive advantage and the persistence of such outcome variables. Here by integrating both IO and RBV perspectives in the analysis of competitive advantage at the firm level, our study clarifies a conceptual distinction between two types of competitive advantage − temporary competitive advantage and sustainable competitive advantage − and explores how firms transform temporary competitive advantage into sustainable competitive advantage. Testing of the developed hypotheses, based on a survey of 165 firms from Taiwan's information and communication technology industry, suggests that firms with a stronger market position can only attain a better outcome of temporary competitive advantage whereas firms possessing a superior position in technological resources or capabilities can attain a better outcome of sustainable competitive advantage. More importantly, firms can leverage a temporary competitive advantage as an outcome of market position to improving their technological resource and capability position, which in turn can enhance their sustainable competitive advantage.

Purpose: The paper reports from an exploratory study into how small businesses use Web 2.0 information and communication technologies (ICT) to work collaboratively with other small businesses. The study had two aims: to investigate the benefits available from the use of Web 2.0 in small business collaborations, and to characterize the different types of such online collaborations. Design/methodology/approach: The research uses a qualitative case study methodology based on semi-structured interviews with the owner-managers of twelve UK-based small companies in the business services sector, who are early adopters of Web 2.0 technologies. Findings: Benefits from the use of Web 2.0 are categorised as lifestyle benefits, internal operational efficiency, enhanced capability, external communications and enhanced service offerings. A 2x2 framework is developed to categorise small business collaborations using the dimensions of the basis for inter-organizational collaboration (control vs. cooperation) and the level of Web 2.0 ICT use (simple vs. sophisticated). Research limitations/implications:A small number of firms of similar size, sector and location were studied, which limits generalisability. Nonetheless, the results offer a pointer to the likely future use of Web 2.0 tools by other small businesses. Practical implications:The research provides evidence of the attraction and potential of Web 2.0 for collaborations between small businesses. Originality/value: The paper is one of the first to report on use of Web 2.0 ICT in collaborative working between small businesses. It will be of interest to those seeking a better understanding of the potential of Web 2.0 in the small business community.

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U sing the technology-organization-environment model, this study investigates the adoption and impact of information and communications technology by small and medium-sized enterprises in South Africa.