Using a strategic approach to analysis the location selection for high‐tech firms in Taiwan

Abstract

Purpose The purpose of this paper is to focus on selection of a location which can widely influence business strategy planning and operation profit. Design/methodology/approach In this paper, the relationship between location strategy and clustering is primarily shown by obtaining location decision criteria and the impact of high‐tech firms with the decision‐making trial and evaluation laboratory (DEMATEL) method. Then, analytic network process (ANP) method is used to explain the value and benefits from cluster location. Findings The authors study decision‐making for location selection of high‐tech firms in Hsinchu Science Park. The example is based on two dimensions including network effect and transaction cost. Network effect plays a more significant role than transaction cost for this example location selection of high‐tech firms in Hsinchu Science Park. The Science Park is surrounded by entrepreneurial spirit, a significant talent pool, and support infrastructure. Originality/value This paper explores how high‐tech managers make their decisions on location strategy in Science Park. Research limitations/implications The authors found that cost and benefit factors of network effect dominate the major decision‐making in selection of location and has direct impact on strategic intent. They also have shown that the DEMATEL and ANP approaches are valuable for evaluating this situation.