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Journal of Marketing Vol. 82 No. 1 2018

Clustering, Knowledge Sharing, and Intrabrand Competition: A Multiyear Analysis of an Evolving Franchise System

Moeen Naseer Butt1; Kersi D. Antia2; Brian R. Murtha3; Vishal Kashyap4

1 Suleman Dawood School of Business, Lahore University of Management Sciences · 2 Ivey Business School, Western University · 3 E. Vernon & William Smith Endowed Fellow, Gatton College of Business & Economics, University of Kentucky · 4 Department of Marketing, University of Graz

Abstract

As franchise systems expand, the clustering and resulting proximity of same-brand outlets often become contentious issues. The increased interactions among outlets may facilitate knowledge sharing, even while inducing intrabrand competition. Prior research has considered each possibility—knowledge sharing or intrabrand competition—in isolation, resulting in conflicting recommendations to the central question of whether multiple same-brand outlets should be close to or distant from one another. In this study, the authors take the perspective of the focal outlet and show that the opportunity to share knowledge afforded by clustering-based proximity may or may not be realized, depending on the motivation and ability of the proximal outlets to share knowledge, the focal outlet's ability to absorb knowledge, and the governance context. An analysis of more than 8,000 observations on the 988 outlets of a U.S.-based automotive service franchise system from 1977 to 2012, and corresponding outlet-level sales information from 2004 to 2012, provides support for the authors’ hypotheses.

DOI
10.1509/jm.16.0173
Volume
82
Issue
1
Pages
74-92
Language
en
Sources
crossref openalex

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