Abstract

This study determined external factors of social enterprises that can be applied to achieve a competitive advantage. Literature reviews and a case study through the participant observation method at the Cabbages & Condoms restaurant were used in this study. Twenty representatives from various related and selected social enterprises, including academic and business management persons, were interviewed in-depth. These interviews were also utilized to consider the qualifications of information providers. It clarified that a social enterprise’s competitive advantage differs from that of other businesses, in particular, profits management and social impact business. This study found that the external factors that had an influence for gaining a competitive advantage consisted of the following: (a) social capital, (b) awareness of the importance of consumers, (c) knowledge of local wisdom, (d) social networking, and (e) government support. All of these factors were applied in the following ways: (a) replacing monetary capital with social capital, (b) being aware of the importance of consumers for creating market share, (c) using knowledge of local wisdom to reduce costs, and (d) using social networking to expand marketing channels. This study can be useful in the development of a social enterprise’s competitive advantage and for other sectors to be acknowledged in social enterprises.