Geographies of Competitive Advantage: an Examination of the US Farm Machinery Industry
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University of Tennessee, Knoxville TRACE: Tennessee Research and Creative Exchange Doctoral Dissertations Graduate School 5-2011 Geographies of Competitive Advantage: An Examination of the US Farm Machinery Industry Dawn M. Drake University of Tennessee - Knoxville, [email protected] Follow this and additional works at: https://trace.tennessee.edu/utk_graddiss Part of the Human Geography Commons Recommended Citation Drake, Dawn M., "Geographies of Competitive Advantage: An Examination of the US Farm Machinery Industry. " PhD diss., University of Tennessee, 2011. https://trace.tennessee.edu/utk_graddiss/963 This Dissertation is brought to you for free and open access by the Graduate School at TRACE: Tennessee Research and Creative Exchange. It has been accepted for inclusion in Doctoral Dissertations by an authorized administrator of TRACE: Tennessee Research and Creative Exchange. For more information, please contact [email protected]. To the Graduate Council: I am submitting herewith a dissertation written by Dawn M. Drake entitled "Geographies of Competitive Advantage: An Examination of the US Farm Machinery Industry." I have examined the final electronic copy of this dissertation for form and content and recommend that it be accepted in partial fulfillment of the equirr ements for the degree of Doctor of Philosophy, with a major in Geography. Ronald V. Kalafsky, Major Professor We have read this dissertation and recommend its acceptance: Thomas L. Bell, Bruce A. Ralston, Anne D. Smith Accepted for the Council: Carolyn R. Hodges Vice Provost and Dean of the Graduate School (Original signatures are on file with official studentecor r ds.) To the Graduate Council: I am submitting herewith a dissertation written by Dawn M. Drake entitled “Geographies of Competitive Advantage: An Examination of the US Farm Machinery Industry.” I have examined the final electronic copy of this dissertation for form and content and recommend that it be accepted in partial fulfillment of the requirements for the degree of Doctorate of Philosophy, with a major in Geography. Ronald V. Kalafsky, Major Professor We have read this dissertation and recommend its acceptance: Thomas L. Bell Bruce A. Ralston Anne D. Smith Accepted for the Council: Carolyn R. Hodges Vice Provost and Dean of the Graduate School (Original signatures are on file with official student records.) Geographies of Competitive Advantage: An Examination of the US Farm Machinery Industry A Dissertation Presented for the Doctorate of Philosophy Degree The University of Tennessee, Knoxville Dawn M. Drake May 2011 Copyright © 2011 by Dawn M. Drake All rights reserved. ii DEDICATION This dissertation is dedicated to the most important person in my academic career; my mentor and my friend, John Benhart, Jr. Without you, I never would have even gone to graduate school, much less finished my Masters and PhD. I cannot imagine what would have happened if I would have never met you. Thank you for all the years of support and encouragement and I look forward to the years to come. In Memory of Dr. John Rehder iii ACKNOWLEDGEMENTS There are numerous people to thank for their help in the completion of this research project. First and foremost, I must thank my committee, led by advisor, Dr. Ron Kalafsky. Assisted by Dr. Tom Bell, Dr. Bruce Ralston, and Dr. Anne Smith, Dr. Kalafsky was a guiding force in the completion of this project. I also must thank the rest of the faculty and staff in the Geography Department at the University of Tennessee and Dr. Peggy Gripshover of Western Kentucky University for their guidance and support. In addition to the support I received from faculty, I must also thank Linda Skolarus at the Benson Ford Research Center, Simone Munson and Lee Grady with the McCormick- International Harvester Archives at the Wisconsin Historical Society, and the staff of the Wellington Reading Room at the University of Guelph Libraries for their assistance in locating materials in the various archives. Also instrumental in this research were my tour guides at various Case New Holland plants – Ron Kleinsasser in Saskatoon, Saskatchewan and John Daniels in Dublin, Georgia. I would be remiss not to thank Cynthia Nelson at Case New Holland in Saskatoon for her help in setting up several tours for me. Also indispensible were the various employees from Case New Holland and AGCO, present at trade shows, who were always willing to talk to me and answer my questions. This research was funded through a grant from the Government of Canada and the Stewart K. McCroskey Memorial Fund at the University of Tennessee. I am also grateful to the financial and moral support I received from Gary and Melissa Fehnel, Stephen Fehnel, and Rich Shirey. Finally, I must thank my parents and family for their continuing support and encouragement. None of this would be possible without you. iv ABSTRACT Many explanations of competitive advantage view place as a secondary factor. Organizational studies models tend to be considered aspatially, yet most are inherently geographic. It is important to consider the impact that geography has on the success or failure of an individual firm or a sector. This dissertation examines how location impacts the US farm machinery industry through an empirical analysis of Porter‟s Theory of Competitive Advantage. Contributing to this empirical test are other bodies of literature including models for headquarters and research and development siting, product life cycle theory, industry life cycle theory, and green technologies as a driver of competitive advantage. The US farm machinery industry is composed of three firms: Deere and Company, Case New Holland, and the Allis-Gleaner Corporation. Theory-elaborating case study methodology, informed by archival data, publically available documents, trade show reconnaissance, and plant tours, coupled with map and content analysis allows for a deeper understanding of how geography impacts competitive advantage in the sector. Comparing findings from these geographic case studies to Porter‟s results led to a new understanding of competitive advantage for mature manufacturing in a globalized economy. Previous analysis found Porter‟s single diamond, which focuses on local conditions for competitive advantage, most appropriate for explaining mature industries in advanced market economies. This study found, however, that as mature industries increasingly pursue a global focus, a double diamond model, which takes into account both local and global conditions for competitive advantage, is more appropriate, even in an advanced economy. This research also found that, much like second-tier cities are desirable for headquarters and research and development siting, second-tier countries (that can provide high-skill labor at v lower prices) are increasingly attractive for manufacturing operations. The need for modifications to product life cycle theory that take into account the impact of these countries as well as the effects of nationalism on manufacturing decisions in mature economies were also uncovered by this dissertation. This research demonstrates the continued importance of place to understanding competitive advantage, not only in the US farm machinery industry, but generally for mature manufacturing as a whole. vi TABLE OF CONTENTS PAGE INTRODUCTION .......................................................................................................................... 1 1.1 Themes and Relevance ...............................................................................................1 1.2 Research Objectives and Questions ..........................................................................11 1.3 Operationalization of Research .................................................................................13 1.3.1 The role of locations in the operations, competitive issues, performance, and competitive advantage of US farm machinery firms ......................... 13 1.3.2 Modifying Porter‟s Theory of Competitive Advantage based on the findings of the case studies ....................................................................... 15 1.3.3 Identifying under-researched or undiscovered geographical characteristics of the organizational studies literature ...................................................... 16 1.4 Organization..............................................................................................................16 THE FARM MACHINERY INDUSTRY .................................................................................... 18 2.1 The Big Three ...........................................................................................................18 2.2 Allis-Gleaner Corporation ........................................................................................19 2.3 Case New Holland ....................................................................................................25 2.3 Deere and Company..................................................................................................27 2.4 Other Farm Machinery Firms ...................................................................................31 ORGANIZATIONAL STUDIES MODELS ................................................................................ 40 3.1 Introduction ...............................................................................................................40 3.2 Theoretical Framework .............................................................................................40 3.3 Organizational Studies