Clusters and the New Economics of Competition Essay
Words: 7465
Pages: 30
Clusters and the new economics of competition Harvard Business Review; Boston; Nov/Dec 1998; Michael E. Porter; Volume: 76 Issue: 6 Start Page: 77-90 ISSN: 00178012
Abstract: Today's economic map of the world is dominated by what are called clusters: critical masses - in one place - of unusual competitive success in particular fields. Clusters are not unique, however; they are highly typical - and therein lies a paradox: the enduring competitive advantages in a global economy lie increasingly in local things - knowledge, relationships, motivation - that distant rivals cannot match. Untangling the paradox of location in a global economy reveals a number of key insights about how companies continually create competitive A host of local institutions is involved with wine, such as the world-renowned viticulture and enology program at the University of California at Davis, the Wine Institute, and special committees of the California senate and assembly. The cluster also enjoys weaker linkages to other California clusters in agriculture, food and restaurants, and wine-country tourism.
Consider also the Italian leather fashion cluster, which contains well-known shoe companies such as Ferragamo and Gucci as well as a host of specialized suppliers of footwear components, machinery, molds, design services, and tanned leather. (See the exhibit "Mapping the Italian Leather Fashion Cluster.") It also consists of several chains of related industries, including those producing different types of leather goods (linked by common inputs and technologies) and different types of footwear (linked by overlapping channels and technologies). These industries employ common marketing media and compete with similar images in similar customer segments. A related Italian cluster in textile fashion, including clothing, scarves, and accessories, produces complementary products that often
Related Documents: Clusters and the New Economics of Competition Essay
sphere amazing structures should be built, which must totally control the development process and pretty frequently come up with a new, cutting edge ideas. There are two sides to the river, where one is innovative idea and the other one - implementation, aims to embody that as a lifestyle or to position the product as a leading unit on the market. The high-tech cluster is the name of present day power, making progress to move forward. However, this power demands a huge amount of 'start up' energy…
2 frameworks, both dealing with CSAs: 1. Single-diamond model (Porter) to analyse international competitiveness of large economies (e.g. U.S.). Double-diamond framework to analyse smaller, but open trading economies (e.g. Canada, New Zealand, Korea). 2. Economic Integration (CSAs) and National Responsiveness (FSAs) matrix: Managers of MNEs have a network of subsidiaries and national responsiveness is relevant when making decision aboput the strategy and organisational structure of such firms…
2. Does Porter fail to explain how the factor and demand conditions that mould a nation’s corporate strategies, business structures, and industrial clusters are established? What other theories and evidence might assist such an explanation? Porter explains what factor and demand conditions are, but he fails to explain how they are established. He defines then, and explains them in detail, but lack the most important aspect, which is how they are established. A theory like this is not of much…
It is not social responsibility, philanthropy or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center. (Porter and Kramer. 2011) The interdependence of business and society with each other is the wellspring of shared values. It recognizes societal needs, not only conventional economic needs as the forces that define markets, and that any social predicaments can create internal costs for firms…
capital. Another assumption made is that factors are immobile; this is at odds with the cluster phenomenon, a geographic concentration of an industry, observed in reality, presenting another flaw with the HO model. Clusters are likely to affect where MNC’s base their production, for example Texus Instraments the company which manufactures part of the iPhone (PK. The Economist – 2011) is based in the technology cluster Silicon Valley. Finally, the HO model assumes there are no transport costs, although…
Using the economic geography theories we have covered in this course, explain and critically evaluate the economic development path of the Hsinchu city-region. The dynamics of development are specific, they flow and connect with one another and they all must be present in some form to ascertain even and desired forms of development. Places are transformed by ‘flows of capital, labour, knowledge, power’ (Henderson et. al., 2002: 438). Place can be specified as in the form of an ‘institution and…
the housing bubbles burst, the global economy was left in economic peril. People lost their jobs and homes, unemployment rose to unthinkable numbers not seen since the Great Depression, and spending greatly declined, lowering the Gross Domestic Product. In 2011, the Regional Economic Development Councils were created in New York State to focus on job creation and turning the economic position of the ten regions around. In the region of New York City, there is a strong skills gap, aging population…
QUESTION 1 The critical evaluation of Steve Millers approach to the challenging of leading BRL Hardy “to become one of the worlds first truly global wine companies” Introduction The two major wine companies in Australia in the late 80's of Thomas Hardy & Sons and BRL, both felt the need to merged in order to achieve economies of scale, increase production capacity, merged distribution channels, exploit best managerial potential and attempt…
the revenue that Ace Cable Company has is to bring in new clients while maintaining existing ones. When looking into the problem of clients canceling their service with Ace Cable one of the first items to consider is the customer paying for something he or she prefers and is the customer paying for something he or she does not want? Other forms of the issue would be how to bring in new clients, what types of service can Ace Cable offer to new and existing clients, and to find the root cause to the…
Competitive Advantage, is the best theory to utilize when an internationalising firm wants to select one country over another for new entry The globalization has become a ubiquitous and potent symbol of the age since the early 1980s. The term globalization was used to describe strengthening interactions of people from various countries, which resulted from the emergency of numerous new technologies (Daniel, Radenbaugh & Sullivan, 2002). As the popularization of globalization, more firms prefer to enter…