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Advantage of cluster and Network corporation among SMEs

Advantage of cluster and Network corporation among SMEs. Prepared by: Dr.K-Talebi. Cluster and Competition. What is cluster? Why cluster? SMEs and Cluster? Economy-Based Knowledge and cluster. What is cluster. Definition of cluster:

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Advantage of cluster and Network corporation among SMEs

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  1. Advantage of cluster and Network corporation among SMEs Prepared by: Dr.K-Talebi

  2. Cluster and Competition What is cluster? Why cluster? SMEs and Cluster? Economy-Based Knowledge and cluster

  3. What is cluster Definition of cluster: A Sectoral and geographical concentration of SMEs faced with common opportunities & Threats.

  4. Cont. What is Cluster A cluster is a geographically proximate group of interconnected companies & associated institution in a particular field linked by commonalities & complementarities. Prof: M.Porter

  5. Definition of Horizontal Network A form of cooperation among independent firms of the same scale that produce the same/similar type of products & that decide to group together for product marketing joint purchase of raw materials, joint manufacturing of finished products

  6. Definition of vertical Network A form of cooperation between firms that occupy adjacent links in the productive chain and that aim at achieving competitive advantages outside their individual reach

  7. The Shifting Economic Policy Agenda Macro Micro Current productivity Innovation Economy wide Cluster National Cross-national Regional / local Economic Economic integrated with social

  8. Comparative Advantage Competitive Advantage Wealth is created by national or regional choice/s Wealth is set by endowment Dr.Talebi

  9. Clusters Fuel for Strong Economies • Clusters improve competitiveness through cooperative competitions & proximity • Clusters give local producers specialization & first mover advantages Dr.Talebi

  10. Government Factor Condition Demand Conditions Chance Michael Porter’s “Diamond of Advantage” Firm Strategy structure, and Rivalry Related & Supported Industries Dr.Talebi

  11. Cluster have life cycles Rule of Thumb 4: Stages of Development of a cluster shape its needs and interests - Embryonic - Growth - Mature - Decaying

  12. Value chain Linkage Existing Emerging Potential Statewide Time Regional Identifying industry Clusters Labor needs Three Dimensions Geography Dr.Talebi

  13. How can state governmentsbuild industrial clusters? Dr.Talebi

  14. Identify existing, emerging andpotential export-oriented ortrading industry clusters. Dr.Talebi

  15. Obstacles to the Formation of Vertical Network • Mutual mistrust and misinformation • Client-Supplier dependent relations • Lake of homogeneity between client and supplier firms Dr.Talebi

  16. * concepts - Innovation - Imitation and competition - Entrepreneurship * Connections - Networks and networking - Connections and Intermediaries * Competencies - Specialized labor force - Industry leaders - Talent - Knowledge Success Factors Dr.Talebi

  17. Successful Cluster Initiatives(Porter) • A shared understanding of competitiveness and the role of clusters in competitive advantage • A Focus on removing obstacles and easing constraints to cluster upgrading • A structure that embraces all clusters in a nation or state • Appropriate cluster boundaries Dr.Talebi

  18. Successful Cluster Initiatives (cont.) • Wide participation of cluster participants and associated institution • Private sector leadership • Close attention to personal relationships • A bias toward action • Institutionalization Dr.Talebi

  19. Reasons for Success • Firm-level competitiveness • Low costs of coordination within small units • Greater flexibility and adaptability to constantly changing markets • Self-entrepreneurship Dr.Talebi

  20. Reasons for Success • Cluster-level competitiveness • Inter-firm cooperation • Competition • Local Governance Dr.Talebi

  21. Improvements in productivity depend on healthy competition,productivity and productivity growth are the connection between competition and standard of living Dr.Talebi

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