Logistics Clusters - How Regional Value Chains Speed Up Global Supply Chains

Elbert, R.; Schönberger, R.

doi:10.1007/978-1-84882-748-6_19

Cited by 5 publications

(2 citation statements)

References 16 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Several important issues have been investigated in this domain, such as cooperation in the supply chain (Schmitz 1999, Deng et al 2016, Akçay and Tan 2008, cost advantages of supply clusters (Wu et al 2006), pricing and quantity policies in coalitions (Granot and Yin 2008, Nagarajan and Sosić 2009, Yin 2010, Huang et al 2015, and policy instruments to promote socially preferred choices (An et al 2015, Bagwell 2008. Logistics clusters are "geographically concentrated sets of logistics-related business activities" (Sheffi 2012); these clusters play a very important role in enhancing international trades (Amonkar 2016), gaining competitive advantages in industry (Sheffi 2010), speeding up global supply chains (Elbert and Schönberger 2009), and planning strategic economics development (Lee and Yang 2003). Retail clusters are different from supply clusters and logistics clusters.…”

Section: Literature Reviewmentioning

confidence: 99%

Retail Clusters in Developing Economies

Zhao

Lim

Guo

et al. 2019

M&SOM

View full text Add to dashboard Cite

We develop a game-theoretic model to explore why retail clusters are so popular in developing economies and when governments should facilitate the formation of retail clusters to improve social welfare. First, we find two determinants of retailer clusters: valuation-cost ratio (consumers' maximum valuation over retailers' production cost) and retailer density (the number of retailers over unit transportation cost). These two determinants indicate retailers' profit potential and competition intensity, respectively. Second, the equilibrium cluster size increases in the valuation-cost ratio. This finding explains the phenomenon that clusters are usually larger in developing economies (where numerous retailers sell unrecognized brands with low profit potential) than in developed economies. Third, when the retailer density of a product market exceeds a certain threshold, the market coverages of clusters overlap with each other (i.e., the overlapping case). Furthermore, when compared to the non-overlapping case, the equilibrium cluster size in the overlapping case is larger for low-profit-potential products but smaller for high-profit-potential products. Together, valuationcost ratio and retailer density define four types of clusters: overlapping massive clusters, non-overlapping large clusters, non-overlapping small clusters, and overlapping mini clusters. Finally, the socially optimal cluster size is larger than the equilibrium cluster size, and the gap between these two cluster sizes decreases in the valuation-cost ratio.

show abstract