2 Clustering, a way to promote SME and local economic development
Silicon Valley is how Santa Clara, the South Bay portion of the San Francisco Bay area in Northern California, United States, is known. The Silicon Valley pseudonym comes from the association of the semiconductor chip making industry that uses silicon, fine sand, as basic raw material.
Its name is no more associated with the raw material but with the most famous high-tech cluster in the world. This 1,290.10 square miles area is the location for most headquarters of the largest technology corporations e.g.: Google, Intel, Apple Inc., Symantec, Hewlett Packard and Facebook. In order to achieve the productivity benefits and innovation advantages that take place in Silicon Valley, established high-tech companies based in other locations (both foreign and domestic), such as, Dell, Sony, Nokia and Siemens, have established subsidiaries in this cluster.
2.1 Clusters
According to Michael E. Porter (2000), Clusters are geographical concentrations of interconnected companies, specialized suppliers, service providers, firms in related industries, and associated institutions (e.g. universities, standard agencies, and trade associations) in a particular field that compete but also cooperate. Its geographical concentration goes from one state, a single city or nearby and neighboring countries. As expected, clusters with more sophisticated and higher levels of competitive development are found in industrialized countries. In each of these countries, it is possible to find clusters that reached world leadership in the industries to which they belong; such as, the insulin cluster of Denmark, the flowers in Netherlands, the cork of Portugal and footwear, clothing and high fashion...
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...re of home-market demand for the industry’s product or service, refers to the degree of the demand of the market and identification of demanding markets and customers.
• Related and Supporting Industries: Existence of supplier industries in the country or other related industries that affect the development of the companies.
• Firm Strategy, Structure and Rivalry: refers to the rules and norm that governs the companies and also their local competitors.
In order to achieve the benefits of conglomeration: increase the productivity of the companies, and their sector, improve their innovative capacities and foster entrepreneurs to generate new companies; it is necessary that these factors and the relation between them are adequate. These will also allow firms, regions and countries to achieve competitive advantages and not satisfying only with comparative advantages.
7. The Salinas Valley is located at the Middle Western part of California, south of the Monterey bay. It is surrounded by mountains on the east, and west side and open to the bay in the north. With the parallel mountain ranges and the border with the bay, this would create a high humidity area with rain clouds being trapped in the channel between the mountains.
Scale Economies: the industry contains several very large players and multiple medium to small players
Locally known as the capital city of Silicon Valley and among the highly recommended holiday destination in the region, San Jose is a tremendous metropolis of California featured with a variety of culture, lifestyle, museums and sites catering voyagers from across the world from decades. The auspicious climate and remarkable sightseeing wealth makes this fabulous town one of the most desired holiday destination among Londoners and rest of the Europeans.
The Silicon Valley, located just south of San Francisco, is the world’s entrepreneurial hotspot. In the beginning, the Silicon Valley was a small place where people knew and worked with each other. Under California law, starting a new company is easy; an innovative culture that constantly produces dividends. Michael S. Malone believes “the Silicon Valley is not easy to replicate . . . the oldest high-tech community on earth . . . largely unpopulated area at the end of WW2 . . . infrastructure.” Following the Second World War, Santa Clara was a small unpopulated county with inexpensive land as well as the large city of San Francisco nearby. The educational aspect of the Silicon Valley offers a wide range of institutions such as small colleges and large universities such as Berkeley and Stanford. The Silicon Valley has a combination of companies, universities, weather, etc., that come to create what the Silicon Valley is
...s particularly evident in Ireland where attractive tax regulations have lead to the influx of American technological companies. Finally there is little attention given to geographical scale within Gereffi’s model. Yes, geography of commodities is recognized on a global scale but the approach neglects the formation of regional and sub-national chains in order to support the larger global chains. (Smith et al 2002)
...ative aspects of diversification, for example through better corporate planning, human recourse management and reaching further synergies between its various business lines.
There are four strategies businesses choose from. The first is corporate level strategy which assist companies in selecting new business strategies that is anticipated to increase its worth. Second, is merger and acquisition strategy where two companies assimilate or one company buys out another business. Thirdly, international Strategy concentrated on selling products and services outside of the national market. Finally, cooperative strategy affords companies the opportunity to join forces to achieve a common goal. (Hitt, Reland, Hoskinsson,
Sternberg, R. and Kiese, M. and Stockinger, D. (2008) ‘Cluster policies in the US and Germany: varieties of capitalism perspective on two high-tech states’ Environment and Planning C: Government and Policy 2010, 28, pp.1063-1082
innovative companies of the world due to the creation of differentiated products such as iPod,
The corporate-level strategy is the process by which companies choose their strategic positions. Frequently, these are new strategic positions taken. The expectation if that they will help increase the firm’s value. Corporate level strategy differs from the business level strategy that is concerned with such issues as lowering cost, differentiation of product, and how to focus on a market segment, for example. The corporate-level strategy is generally narrow in scope. It is most often concerned with only two key issues. One issue is what product businesses and markets the firm should compete. The other issue of concern for the corporate strategy is how that business should be managed by the corporate headquarters. The overall corporate strategy is carried out by selecting and managing groups from different businesses who are competing in different product markets (Hitt, 2015). Bringing the bear claw clip to market is illustrative of several principles of corporate
Consumer market is origin of product demand. Derived demand means is direct demand. Product is usually less technical and complex. Organizational product demand is based on the demand. products often require technical expertise.
A diversified company has two levels of strategy: business unit (or competitive) strategy and corporate (or companywide) strategy. Competitive strategy concerns how to create competitive advantage in each of the businesses in which a company competes. Corporate strategy concerns two different questions: what businesses the corporation should be in and how the corporate office should manage the array of business units.
RIGZONE (2013) Malaysian Oil, Gas Service Firms Focus Overseas. Available from: http://dayagroup.com.my/wp-content/uploads/2013/08/Rigzone.com_250713.pdf [Accessed 23 October 2013].
The case for regional integration is both simple and irrefutable. First we are small and we need to achieve economies of scale. We need to achieve such economies in markets, production, the mobilisation of regional capital for regional use, university education, science and technology, sea and air transport to mention some areas.
...iginal Equipment Manufacturing) firms which operate for the developed countries and for the international control. (Tubitak,2002)