Competitors' Cluster - A Phenomenon in the Field of Retail Locating

Abstract: Cluster is a common phenomenon in developed countries. Horizontal clusters and vertical clusters are often seen in these countries. In the domestic retailing, a particular type of cluster—competitors’ cluster plays an important role in the past, nowadays and in the future. Though many researchers have investigated into clusters and talked a lot about the benefits firms could share by clustering together, few of them explained directly why the competitors of the same trade cluster together for competition. This dissertation tried to find explanatory factors that lead competitors to clusters by taking the electronics stores in Kristianstad as an example. Based on the cluster theory, the imitative behavior theory, Huff ’s model, the 4C theory, five underlying factors (the rivals, the costs, the traveling distance, the shopping area and the purchase volume) were put forward. Six propositions were set up to testify these five factors existing in formation of the cluster. A survey was conducted by using face-to-face interview on retailers and questionnaire on consumers. The results of the survey indicated that the propositions were valuable when it came to explain why the phenomenon of the competitors’ cluster emerged. The survey implied that when firms chose to locate the stores, from their own perspective, they wanted to constrain rivals and reduce costs by clustering. Meanwhile, firms also took the consumers’ attractiveness into their consideration. Shopping area and traveling distance were exact explanatory factors, which can reveal incentives of the retailing competitors’ cluster. The research will do help to the future retailing development in China and also can be helpful for the governments in China to plan the commerce distribution.