Abstract
Smaller less “glamorous” firms are more prevalent in the US economy than high‐technology companies. These small firms are known for their inability to erect barriers to imitation, making the development of competitive advantage difficult. In our paper, we study the relationship between firm resources and firm strategies. Based on the contention that the quality of a firm’s strategy cannot be judged independently of the firm resources on which it is based, we examine the relationship between firm resources and strategies in a cross‐section of over 250 small firms. Our findings indicate that small less glamorous firms should follow strategies that bring them closer to their customers, rather than innovation strategies that may be more appropriate for their high‐technology counterparts.