Robert Pfeffer Location and Strategy – Analyzing the Effect of the Local Environment on a Portfolio of Strategy-Performance-Relationships of Bavarian Key-Tech SMEs

About this book

„Economic activity is distributed unequally across space [...]“ (Ketels, 2013). This insight is not new. It dates back at least to the nineteenth century, when Alfred Marshalls Principles of Economics (1890) offered a first-of-its-kind analysis of the agglomeration of people and economic activity in geographic space.

Paradoxically, the agglomeration of people and economic activity has continued to be one of the most important phenomena throughout the twentieth century – a century in that the processes of globalization and digitalization had been strongly expected to dissolve away agglomerations of firms and population.

Rather than being dissolved away as socially and economically relevant spatial objects, geographic hot spots are a striking feature of the contemporary spatial structure of national and regional economies.

And recent data published by the United Nations predicts the trend of agglomeration to continue throughout the twenty-first century (United Nations, 2014). The number of geographic hot spots counting more than one million inhabitants is continuously rising. Within the next ten years it has been predicted that there will be more than 600 agglomerations worldwide counting at least one million inhabitants. Together these geographic hot spots will accommodate about 2.1 billion people in 735 million households generating 60% of the worldwide GDP.

The author rigorously describes and defines the concepts of geographic hot spots and blind spots and reviews the strategic management literature on the implications of agglomeration on firm performance and firm strategy.

He elaborates the research model and deduces the hypotheses on spatial heterogeneity, performance homogeneity, and strategic heterogeneity. With regard to the latter, four individual contingency models are formulated (one for each strategic posture under investigation) and subsequent hypotheses deducted. Chapter four represents a combination of research methodology and empirical analysis. The chapter is composed of three main paragraphs: data collection, data processing, and data analysis. Each paragraph starts out by briefly introducing the analytical procedures applied and ends by presenting the outcomes and results of the empirical analyses conducted.

The author discusses the major findings of the quantitative analyses, taking into account the major findings of the t-tests for the difference of means for independent samples as well as the results of the moderated regression analyses. The final Chapter summarizes and concludes the study. In addition, it points out the implications and limitations of the present empirical study, provides suggestions for further research and ends with a concluding remark.