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Location strategies of multiunit service businesses: spatial differentiation and agglomeration among hamburger restaurants in Paris, 1984–2004

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  • Sébastien Liarte
  • Bernard Forgues

Abstract

In this article, we study how multiunit service businesses locate their units, choosing between two opposite spatial strategies. Whereas, locating one’s units close to competitors’ brings positive agglomeration externalities, locating one’s units far away from others’ allows local monopolies through spatial differentiation. We examine location strategies of the two biggest hamburger restaurant chains—namely McDonald’s and Quick—in Paris between 1984 and 2004. Results show that competitive standings impact locational strategy choices. The market leader favors spatial differentiation, thus preempting premium locations. Conversely, the challenger favors locations close to the leader, thus aiming at agglomeration externalities. Copyright Springer-Verlag 2008

Suggested Citation

  • Sébastien Liarte & Bernard Forgues, 2008. "Location strategies of multiunit service businesses: spatial differentiation and agglomeration among hamburger restaurants in Paris, 1984–2004," Service Business, Springer;Pan-Pacific Business Association, vol. 2(3), pages 233-248, September.
    • Handle: RePEc:spr:svcbiz:v:2:y:2008:i:3:p:233-248
    DOI: 10.1007/s11628-008-0038-2
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