International Business

PRABINA THAPA (1303864)

WORD COUNT: 2560

Date: 21/04/15

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BE413- INTERNATIONAL BUSINESS ENVIRONMENT

‘Michael Porter’s (1998) work on industrial clusters has been seen as a new and potentially fruitful way of understanding how innovation can be stimulated in particular regions and firms. What are the main features of Porter’s cluster model and what advantages does it bring for business and society?’

PRABINA THAPA (1303864)

WORD COUNT: 2560

Date: 21/04/15

-------------------------------------------------

BE413- INTERNATIONAL BUSINESS ENVIRONMENT

‘Michael Porter’s (1998) work on industrial clusters has been seen as a new and potentially fruitful way of understanding how innovation can be stimulated in particular regions and firms. What are the main features of Porter’s cluster model and what advantages does it bring for business and society?’

UNIVERSITY OF ESSEX (ESSEX BUSINESS SCHOOL)

Companies and institutions that are interconnected in a particular field; that shares defined geographic area is defined as industrial cluster (Porter, 1998). Clusters are trending enormously as there is an increase in productivity economically, this is because of the influence by local assets and the presence of mainly the companies, institutions and governments (Rosenfeld, 2005). There are also other components that has an influence on clusters, such as banks, multinationals, training institutions, customers, NGOs, trade associations and more (Boja, 2011). The critical mass in competitive advantages should be big enough to create a cluster (Porter, 2000). Porter’s cluster is known to be “new”; however, this statement is not relatively correct which will be discussed further in this essay. Moreover, a paradox is posed for cluster in a period for global competition; due to high speed transportation, efficient communication and accessible markets, this diminishes the importance of location (Porter, 1998). However, Porter...