Competition Between Industrial Clusters example essay topic

Industrial Clusters in Tianjin Area About Industrial Clusters... Nowadays, market competition is gradually changing from competition between enterprises to competition between value chains and even competition between industrial clusters. The development of industrial clusters is a social process changing from production of Ford type to specialized production. State owned enterprises cooperate with foreign companies, together to lower costs and improve market reaction to become world wide competitive.

Industrial Clusters in Tianjin Factors that have triggered the development Tianjin to become an Industrial Cluster: 1. Development of state owned enterprises as foundation. 2. Large number of existent trained skilled industrial technical workers. 3. Created manufacturing industry culture.

4. Created industrial atmosphere and institutional environment. Measures that need to be taken to move Tianjin to a better world wide position: 1. Government should promote research and cooperation with universities and create research institutions. 2. Improve infrastructure to attract labor force and international management.

3. Reform state owned companies, and law frame. 4. Strive toward a "Made in China" name. Overview of the 4 main important Industrial Clusters: Electronic Information Remarks: -High LQ, (LQ = Location Quote, comparative advantage criteria of a certain industry in a certain region) -Mostly foreign owned.

(USA, Korea, Japan Taiwan) -Very good cooperation between companies along the supply chain. Major Players: Motorola (63% of sales). Main Problems: -Mostly foreign companies leads to funds dependency (90% foreign, national average 73%. -State owned companies have small scale, insufficient investment, slow speed development, weak competitive power, brain drain and lack inner motivation force. -R&D interaction between companies, universities and research institutes are not present.

Green Battery Remarks: -Research, Development, Production Leader in China -Strong cooperation with Universities -Expense variety of products, Li-on, Ni-MH, Am orphic Silicon batteries. Major Players: -Sanyo, Ltd Peace Bay Power, Tianjin Listen Battery Ltd, Laotian Power. Main Problems: -Industrial Chain needs further improvement -Lack of innovation due to inadequate R&D compared worldwide -High degree of automation, but low degree of flexibility -Fewer types of products, high costs and slow speed to meet market needs. Automobiles Remarks: -High Tax rate on imported automobiles has promoted the establishment of Auto Makers. -Almost 100% dependent on Foreign funds -Rapid market demand growth leads to push the development of the Auto Industry. -Since China enter the WTO acquisitions and mergers have been very dynamic in this branch.

-More than 700 foreign funded companies manufacture automobile accessories in China. Major Players: -Toyota, Tianjin Automobile Group (more than 50 small and medium enterprises), FAW Group Main Problems: -Few local innovation capacity. -Know How transfer is very slow-Local Automotive industry could remain isolated if no innovation system is implemented. Bicycles Remarks: -More than 400 bike manufacturers and 450 enterprises of components and parts in Tianjin. -Important rise of privately owned medium scale and small scale enterprises after the disintegration of the state owned companies.

Major Players: -Ao sheng Bicycle Factory, Fushida Bicycle, Dongli's among many others. Main Problems: -The bicycle industry has insufficient technical innovation within industrial clusters. -Competition focuses on price -Lack famous brand products.