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

Sébastien Liarte and Bernard Forgues ()
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Sébastien Liarte: IAE - Institut d'Administration des Entreprises - Toulouse
Bernard Forgues: IAE Lille - IAE Lille University School of Management - Lille - Université de Lille

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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.

Date: 2008-09-01
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Published in Service Business, 2008, 2 (3), pp.233-248. ⟨10.1007/s11628-008-0038-2⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02312506

DOI: 10.1007/s11628-008-0038-2

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