Competition Competitive Advantage And Clusters

Harvard professor, Michael Porter has been one of the most influential figures in strategic management research over the last three decades. He infused a rigorous theoretical framework of industrial organization economics with the then still embryonic field of strategic management and elevated it to its current status as an academic discipline. Porter's outstanding career is also characterized by its cross-disciplinary nature. Following his most important work on strategic management, he then made a leap to the policy side and dealt with a completely different set of analytical units. More recently he has made a foray into inner city development, environmental regulations, and health care services. Throughout these explorations Porter has maintained his integrative approach, seeking a road that links management case studies and the general model building of mainstream economics. With expert contributors from a range of disciplines including strategic management, economic development, economic geography, and planning, this book assesses the contribution Michael Porter has made to these respective disciplines. It clarifies the sources of tension and controversy relating to all the major strands of Porter's work, and provides academics, students, and practitioners with a critical guide for the application of Porter's models. The book highlights that while many of the criticisms of Porter's ideas are valid, they are almost an inevitable outcome for a scholar who has sought to build bridges across wide disciplinary valleys. His work has provided others with a set of frameworks to explore in more depth the nature of competition, competitive advantage, and clusters from a range of vantage points.

In this book leading scholars from a range of disciplines, including strategic management, economic development, economic geography and planning, assess the contribution that Michael Porter, one of the most influential figures in strategic management research, has made to these respective academic fields.

Now beyond its eleventh printing and translated into twelve languages, Michael Porter’s The Competitive Advantage of Nations has changed completely our conception of how prosperity is created and sustained in the modern global economy. Porter’s groundbreaking study of international competitiveness has shaped national policy in countries around the world. It has also transformed thinking and action in states, cities, companies, and even entire regions such as Central America. Based on research in ten leading trading nations, The Competitive Advantage of Nations offers the first theory of competitiveness based on the causes of the productivity with which companies compete. Porter shows how traditional comparative advantages such as natural resources and pools of labor have been superseded as sources of prosperity, and how broad macroeconomic accounts of competitiveness are insufficient. The book introduces Porter’s “diamond,” a whole new way to understand the competitive position of a nation (or other locations) in global competition that is now an integral part of international business thinking. Porter's concept of “clusters,” or groups of interconnected firms, suppliers, related industries, and institutions that arise in particular locations, has become a new way for companies and governments to think about economies, assess the competitive advantage of locations, and set public policy. Even before publication of the book, Porter’s theory had guided national reassessments in New Zealand and elsewhere. His ideas and personal involvement have shaped strategy in countries as diverse as the Netherlands, Portugal, Taiwan, Costa Rica, and India, and regions such as Massachusetts, California, and the Basque country. Hundreds of cluster initiatives have flourished throughout the world. In an era of intensifying global competition, this pathbreaking book on the new wealth of nations has become the standard by which all future work must be measured.

Now beyond its eleventh printing and translated into twelve languages, Michael Porter’s The Competitive Advantage of Nations has changed completely our conception of how prosperity is created and sustained in the modern global economy. Porter’s groundbreaking study of international competitiveness has shaped national policy in countries around the world. It has also transformed thinking and action in states, cities, companies, and even entire regions such as Central America. Based on research in ten leading trading nations, The Competitive Advantage of Nations offers the first theory of competitiveness based on the causes of the productivity with which companies compete. Porter shows how traditional comparative advantages such as natural resources and pools of labor have been superseded as sources of prosperity, and how broad macroeconomic accounts of competitiveness are insufficient. The book introduces Porter’s “diamond,” a whole new way to understand the competitive position of a nation (or other locations) in global competition that is now an integral part of international business thinking. Porter's concept of “clusters,” or groups of interconnected firms, suppliers, related industries, and institutions that arise in particular locations, has become a new way for companies and governments to think about economies, assess the competitive advantage of locations, and set public policy. Even before publication of the book, Porter’s theory had guided national reassessments in New Zealand and elsewhere. His ideas and personal involvement have shaped strategy in countries as diverse as the Netherlands, Portugal, Taiwan, Costa Rica, and India, and regions such as Massachusetts, California, and the Basque country. Hundreds of cluster initiatives have flourished throughout the world. In an era of intensifying global competition, this pathbreaking book on the new wealth of nations has become the standard by which all future work must be measured.

The “diamond” is further influenced by chance events and government action.

This book aims to clarify the link between geographic clustering and international competitiveness in light of the Turkish experience, a subject that is high on the agendas of researchers as well as policy makers and strategic planners. The key findings of the study are discussed with respect to the recent debates on clusters to provide a full account of what the Turkish experience, when looked from the viewpoint of the strategic management discipline, offers to further intellectual thinking on clusters.

Although it is widely recognized that changes in technology and competition have diminished many of the traditional roles of location, this study argues for a prominent role of clusters, or geographic concentrations of interconnected companies, specialized suppliers, service providers, and associated institutions in a particular field that compete but also cooperate. Clusters are a striking feature of virtually every national, regional, state, and even metropolitan economy, and can be seen as a new way of thinking about different level economies. Their prevalence reveals important insights about the microeconomics of competition and the role of location in competitive advantage. Clusters occur in many types of industries, in large and small economies, in rural and urban areas, and at most geographic levels. The most important reason for using clusters, rather than more traditional groupings (e.g. companies, industries, sectors), as a unit of analysis is that clusters are better aligned with the nature of competition and appropriate roles of government. They are broader than traditional industry categorizations, and thus capture important linkages, complementarities, and spillovers in terms of technology, skills, information, marketing, and customer needs that cut across firms and industries. The study argues that proximity in geographic, cultural, and institutional terms of the institutions and businesses within clusters plays an important role in allowing special access and relationships, as well as better information, powerful incentives, and other advantages in productivity that are more difficult to achieve from a distance. Clusters have three major effects on competition: 1) increasing the current (static) productivity of constituent firms or industries; 2) increasing the capacity of cluster participants for innovation and productivity growth; and 3) stimulating new business formation that supports innovation and expands the cluster. The study argues that government should focus on facilitating cluster development and upgrading, with special attention to established and emerging clusters rather than new clusters. (AT).

The world's leading experts contribute to our understanding of regional innovation, cluster formation and the factors that influence regional productivity and innovative performance. The text improves our understanding of the reasons why, how and where innovation clusters emerge, as well as the factors that determine their respective success or failure. In doing so, it provides a timely and comprehensive picture on innovation, location, networks and clusters as important means in an environment of intensifying interregional competition. The book is written for professional researchers as well as for students and practitioners in politics, business and consultancy.

For the past two decades, Michael Porter's work has towered over the field of competitive strategy. On Competition, Updated and Expanded Edition brings together more than a dozen of Porter's landmark articles from the Harvard Business Review. Five are new to this edition, including the 2008 update to his classic "The Five Competitive Forces That Shape Strategy," as well as new work on health care, philanthropy, corporate social responsibility, and CEO leadership. This collection captures Porter's unique ability to bridge theory and practice. Each of the articles has not only shaped thinking, but also redefined the work of practitioners in its respective field. In an insightful new introduction, Porter relates each article to the whole of his thinking about competition and value creation, and traces how that thinking has deepened over time. This collection is organized by topic, allowing the reader easy access to the wide range of Porter's work. Parts I and II present the frameworks for which Porter is best known--frameworks that address how companies, as well as nations and regions, gain and sustain competitive advantage. Part III shows how strategic thinking can address society's most pressing challenges, from environmental sustainability to improving health-care delivery. Part IV explores how both nonprofits and corporations can create value for society more effectively by applying strategy principles to philanthropy. Part V explores the link between strategy and leadership.