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Modelling inter-firm competitive rivalry in a port logistics cluster: a case study of Melbourne, Australia

Modelling inter-firm competitive rivalry in a port logistics cluster: a case study of Melbourne,... The paper models the effect of spatial clustering on various dimensions of inter-firm competitive rivalry among port logistics firms using Porter's five forces model.Design/methodology/approachA survey-based quantitative approach is adopted to collect data from logistics firms, which are directly or indirectly dependent on the Port of Melbourne in Australia. A structural equation modelling (SEM) technique is used to examine the theorised relationships between various dimensions of inter-firm competitive rivalry and the tendency of spatial clustering of logistics firms in the vicinity of Port of Melbourne.FindingsThe results indicate that the inter-firm competitive rivalry increases significantly when logistics firms are spatially clustered. This effect is further augmented when they cluster around the port. Co-location of firms near the port tends to increase “bargaining power of buyers”, whilst indirectly affecting “competitive rivalry” via “threats of substitutes”. This indicates that co-location enhances the bargaining power of buyers through the greater availability of substitute services that in turn promotes competitive rivalry among firms. However, co-location has an insignificant effect on “barriers to entry” and “bargaining power of suppliers”. Low entry barrier thus favours high competitive rivalry among firms. Hence, this paper validates the Porter's cluster and five forces models that confirm the positive effect of port logistics clusters (PLCs) on bargaining power of buyers and indirect effect on competitive rivalry partially mediated through threats of substitutes.Practical implicationsThis study provides empirically grounded evidence for firms to evaluate co-location decision choices and help buyers and sellers to devise business strategies to enhance inter-firm competitive rivalry and bargaining power.Originality/valueThis is the first systematic attempt to empirically validate Porter's five forces model in the context of PLC. Furthermore, the conceptualisation of PLC concept both as spatial and functional constructs (i.e. dependency on port) is novel. This study thus has broadened the meaning of cluster from a geographic entity to a more useful functional construct to reflect inter-firm dependencies. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The International Journal of Logistics Management Emerald Publishing

Modelling inter-firm competitive rivalry in a port logistics cluster: a case study of Melbourne, Australia

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References (52)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0957-4093
DOI
10.1108/ijlm-01-2021-0053
Publisher site
See Article on Publisher Site

Abstract

The paper models the effect of spatial clustering on various dimensions of inter-firm competitive rivalry among port logistics firms using Porter's five forces model.Design/methodology/approachA survey-based quantitative approach is adopted to collect data from logistics firms, which are directly or indirectly dependent on the Port of Melbourne in Australia. A structural equation modelling (SEM) technique is used to examine the theorised relationships between various dimensions of inter-firm competitive rivalry and the tendency of spatial clustering of logistics firms in the vicinity of Port of Melbourne.FindingsThe results indicate that the inter-firm competitive rivalry increases significantly when logistics firms are spatially clustered. This effect is further augmented when they cluster around the port. Co-location of firms near the port tends to increase “bargaining power of buyers”, whilst indirectly affecting “competitive rivalry” via “threats of substitutes”. This indicates that co-location enhances the bargaining power of buyers through the greater availability of substitute services that in turn promotes competitive rivalry among firms. However, co-location has an insignificant effect on “barriers to entry” and “bargaining power of suppliers”. Low entry barrier thus favours high competitive rivalry among firms. Hence, this paper validates the Porter's cluster and five forces models that confirm the positive effect of port logistics clusters (PLCs) on bargaining power of buyers and indirect effect on competitive rivalry partially mediated through threats of substitutes.Practical implicationsThis study provides empirically grounded evidence for firms to evaluate co-location decision choices and help buyers and sellers to devise business strategies to enhance inter-firm competitive rivalry and bargaining power.Originality/valueThis is the first systematic attempt to empirically validate Porter's five forces model in the context of PLC. Furthermore, the conceptualisation of PLC concept both as spatial and functional constructs (i.e. dependency on port) is novel. This study thus has broadened the meaning of cluster from a geographic entity to a more useful functional construct to reflect inter-firm dependencies.

Journal

The International Journal of Logistics ManagementEmerald Publishing

Published: Apr 19, 2022

Keywords: Logistics cluster; Competition; Agglomeration; Inter-firm network; Port centric logistics

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