Question

Describe how clusters can increase competition and contribute economic development for a community.

Do you think that it is realistic for companies to both simultaneously compete and collaborate? Why or why not?

Answer 1

1. Clusters are geographic concentrations of competing and collaborating firms that tend to produce innovation and higher than average wages. Cluster-based economic development strategies are designed to improve a cluster’s performance by addressing the common needs of businesses within the cluster.

- Local government managers and other local officials can intervene in the clusters by providing economic development, education and training, workforce development, and infrastructure provision. The Cluster has developed competencies that allow it to produce goods and services for sale outside the region.

- The Cluster based approach has influenced the economic development and helped in addressing the needs of existing businesses in a way that can also make the community more attractive to new businesses. Clusters give a region a competitive advantage, and clusters can provide the basis for cost-effective economic development strategies this thus helps in increasing the completion and contribute to the overall economic development of the nation.

2. Collaboration along with healthy competition is becoming really very essential considering the industry and market situations currently. It takes so much money to develop new products and to penetrate new markets that few companies can go it alone in every situation.

- Alliances can provide shortcuts for Western companies racing to improve their production efficiency and quality control.

-Examples of competitive collaboration are Motorola and Toshiba’s distribution in the semiconductor market. ICL and Fujitsu in the current generation of mainframes.

-Through competitive collaboration the internal skills and technologies are enhanced and absorbed.

-The companies enter alliances with clear strategic objectives, and they also understand how their partners’ objectives will affect their success. This ensures that the competition is maintained at all levels.

-Strategic intent is an essential ingredient in the commitment to learning, companies enter alliances represents a change in competitive tactics, not competitive goals.

-The costs and risks of entering new businesses are reduced at a great level.

It is very essential that collaboration is truly competitive, conditioned and should be followed at all the levels during the goal implementation.