Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • October 2006
  • Article
  • Management Science

Location Choices across the Value Chain: How Activity and Capability Influence Collocation

By: Juan Alcacer
  • Format:Print
  • | Pages:15
ShareBar

Abstract

There has been a recent revival of interest in the geographic component of firm strategy. Recent research suggests that two opposing forces—competition costs and agglomeration benefits—determine whether firms collocate in a given geographic market. Unexplored is (1) whether these forces have different impacts on R&D, production, and sales subsidiaries, leading to diverse collocation levels, and (2) how firm capabilities impact collocation by increasing or decreasing competition costs and agglomeration benefits. I explore these questions using the worldwide location decisions of firms in the cellular handset industry. I find that production and sales subsidiaries are more geographically dispersed, and R&D subsidiaries are more concentrated, than a random distribution would predict. When distinguishing firms by their capabilities, I find that more-capable firms collocate less than less-capable firms, regardless of the activity performed.

Keywords

Business Strategy; Competitive Strategy; Sales; Research and Development; Cost Accounting; Cost Management; Markets; Production; Organizational Change and Adaptation; Distribution; Cost vs Benefits; SWOT Analysis; Telecommunications Industry

Citation

Alcacer, Juan. "Location Choices across the Value Chain: How Activity and Capability Influence Collocation." Management Science 52, no. 10 (October 2006): 1457–1471.
  • Find it at Harvard

About The Author

Juan Alcacer

Strategy
→More Publications

More from the Author

    • December 2022
    • Faculty Research

    Iberdrola: Leading the Energy Revolution

    By: Juan Alcácer and Emer Moloney
    • December 2022 (Revised January 2023)
    • Faculty Research

    Circles.Life at a Crossroads of Growth

    By: Juan Alcacer and Adina Wong
    • November 2022
    • Faculty Research

    Introduction to the RC Strategy Course 2023

    By: Juan Alcacer
More from the Author
  • Iberdrola: Leading the Energy Revolution By: Juan Alcácer and Emer Moloney
  • Circles.Life at a Crossroads of Growth By: Juan Alcacer and Adina Wong
  • Introduction to the RC Strategy Course 2023 By: Juan Alcacer
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College