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Analytical Report - Coursework Example

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From Silicon Valley to Taiwan, Taiwan to China, they have changed the nature of business relationships. Discuss the role of national clusters and critically evaluate the contribution they make to…
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Download file to see previous pages Industry clusters provide favourable business environment for various types of business entities, including core businesses, supporting businesses, government structures, academic and research institutions, etc. Industry clusters facilitate collaboration among all these members and facilitates innovation within a cluster. Close proximity and direct communication increases trust among firms and commitment. Due to knowledge sharing environment companies gain competitive advantage and stay ahead of rivals, operating distantly. Moreover, while operating within one geographical location, firms are encouraged to collaborate with various players, starting from customers and suppliers, and ending with government and research institutions. As a result, many companies collaborate in terms of R&D, driving thus innovation performance within a cluster. This form of collaboration increases innovation performance and makes companies more competitive on the global market. National legislation and policies play an important role in promoting collaboration and innovation within a specific cluster. Thus, major attributes of industrial clusters (knowledge sharing and collaboration) enable firms to develop long-term relationships with their business partners, and thus to establish more sustainable business model. Concentration of research institutions, universities, think tanks and other industry players facilitates innovation and development. As the research shows, all these aspects help nations to gain and maintain competitive advantages in the international arena.
In the era of globalisation, improved logistics and communication, it may appear that geographical location plays less important role in competitive position of a nation or a country. There are practically no more physical constraints imposed by distance factor as companies may source, supply and provide services/sell products distantly (Porter, 1998). However, there is another tendency, which challenges this position, ...Download file to see next pagesRead More
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