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The Creation of Competitive Advantage by Producer Service Establishments

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  • David P. Lindahl
  • William B. Beyers

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.

Suggested Citation

  • David P. Lindahl & William B. Beyers, 1999. "The Creation of Competitive Advantage by Producer Service Establishments," Economic Geography, Taylor & Francis Journals, vol. 75(1), pages 1-20, January.
    • Handle: RePEc:taf:recgxx:v:75:y:1999:i:1:p:1-20
    DOI: 10.1111/j.1944-8287.1999.tb00071.x
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    Cited by:

    1. Jaison Abel & Todd Gabe, 2011. "Human Capital and Economic Activity in Urban America," Regional Studies, Taylor & Francis Journals, vol. 45(8), pages 1079-1090.
    2. Krenz, Astrid, 2014. "Agglomeration of knowledge: A regional economic analysis for the German economy," University of Göttingen Working Papers in Economics 206, University of Goettingen, Department of Economics.
    3. Edward J. Malecki, 2001. "Going digital in rural America," Proceedings – Rural and Agricultural Conferences, Federal Reserve Bank of Kansas City, issue Sep, pages 49-68.
    4. Johannes Glückler, 2005. "Making Embeddedness Work: Social Practice Institutions in Foreign Consulting Markets," Environment and Planning A, , vol. 37(10), pages 1727-1750, October.
    5. Peter Wood, 2006. "Urban Development and Knowledge‐Intensive Business Services: Too Many Unanswered Questions?," Growth and Change, Wiley Blackwell, vol. 37(3), pages 335-361, September.

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