The support of the National Science Foundation through grant number SES9224515 is gratefully acknowledged. The authors also wish to thank the reviewers of this paper for their helpful comments.
The Creation of Competitive Advantage by Producer Service Establishments†
Article first published online: 31 DEC 2008
© 1999 Clark University
Volume 75, Issue 1, pages 1–20, January 1999
How to Cite
Lindahl, D. P. and Beyers, W. B. (1999), The Creation of Competitive Advantage by Producer Service Establishments. Economic Geography, 75: 1–20. doi: 10.1111/j.1944-8287.1999.tb00071.x
- Issue published online: 31 DEC 2008
- Article first published online: 31 DEC 2008
- competitive advantage;
- producer services;
- business strategies
Abstract: In this paper we focus on how competitive advantage is constructed by producer service businesses, how it varies among establishments with different characteristics, and how it affects establishment performance. Sources of competitive advantage stem from characteristics such as quality, price, creativity and innovation, flexibility, timeliness of delivery, and scope of services offered. We present a detailed evaluation of the competitive advantage model developed by Porter (1990) and review applications of this model to the producer services. We find this model to be partially successful in distinguishing between superior and inferior performance by producer service businesses, with important differences observed across age, organizational type, and size of business. We develop an expanded model of factors related to competitive advantage and performance, which includes not only factors contained in the Porter model, but dimensions particular to the information-oriented producer services, such as creativity, geographic proximity, R&D capabilities, and adaptability to client needs.