Balancing Firm and Network-Based Resources to Gain Competitive Advantage: A Case Study of an Artisanal Musical Instruments Cluster in Germany

Abstract

The question of whether firms gain competitiveness through local networks and clusters becomes more relevant than ever as globalization proceeds. This is particularly true for traditional and craft-based clusters, districts and business networks. A central question emerging for these types of networks is: (How) can they build competitive advantage using local production systems and network ties as core resources? The present article aims at shedding light on this issue by presenting a case study of an artisanal cluster operating in the manufacturing of classical musical instruments. Focusing on a resource-based perspective and using a qualitative research approach, the paper explores the critical resources necessary for generating competitive advantage through local networking. It critically investigates how competitive advantage is gained for the network and which are the drivers of sustaining competitive advantage in a dynamic view.