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MICRO,SMALL & MEDIUM
ENTERPRISE MANAGEMENT
SIGNIFICANCE OF CLUSTER APPROACH : A CASE STUDY
SHWETANG PANCHAL 09MBA22
GUIDED BY
Mr. Jignesh Darji
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INTRODUCTION OF CLUSTER
APPROACH
` It refers to provide technical assistance tohelp Small and Medium Enterprises (SMEs)
to become more competitive by
` fostering inter-enterprise linkages as well as` collaborative relations with local support
institutions.
` It aims at helping SMEs combining their
strengths and jointly take advantage of
market opportunities or solve common
problems with a combined effort.
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` Clusters are geographic concentrations of` interconnected companies,
` specialized suppliers,
` service providers, and
` associated institutions
` in a particular field those are present in a nation or region.
` Clusters arise because they increase the productivity
with which companies can compete.
` The development and upgrading of clusters is an
important agenda for governments, companies, and
other institutions.
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` The cluster approach covers differentmodalities of inter-enterprise
` and enterprise/institutions collaboration:` horizontal networking (among SMEs),
` Vertical networking (among SMEs and largerenterprises) and` clustering where larger concentrations of enterprises
operating in the same locality and belonging to sameor complementary sectors are concerned.
` The cluster model provides the framework forbusiness-to-business and business-to-environment cooperation.
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` Cluster development means that LED (Local EconomicDevelopment) initiatives are concentrated on
` encouraging and supporting inter-firm collaboration,
` institutional development and support in targeted
industrial sectors.` The sectors are targeted at those that offer the most
local economic development potential.
` Where the local economy has existing clusters this may
provide a more targeted approach to improvingeconomic development activity by leveraging resources
in the direction of greatest potential return.
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` A geographically proximate group of interconnectedcompanies and associated institutions in a particularfield, linked by commonalities and complementarities(external economies)
` An end product industry or industries
` Downstream or channel industries
` Specialized suppliers
` Provider of specialized services
` Related industries (those with important shared activities,labor, technologies, channels, or common customers)
` Supporting institutions: financial, training, tradeassociations, standard settings, research
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DEVELOPING NETWORK
` Special attention is paid to encouraging local peopleengaged in the same cluster to meet together to enable
business development opportunities.
` For Example :
` These could include encouraging local fishermen and fishprocessors to meet and exchange ideas on improving
facilities and adding more value to their products so they
would all benefit.
` Another example could be to start a craft network. Thenetwork could jointly market their goods and then start
inter-trading with each other, building synergies.
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PROVIDINGCLUSTER SPECIFICINFORMATION
DEVELOPINGCLUSTERRELATEDMARKETINGEFFORTS
` One of the most effectiveways of developing a clusteris to gather information aboutbusinesses and institutionalsupport systems in thecluster and then produce it sothat it can be shared.Thereafter, with a small
amount of effort, supplierlinkages can be developed.These do not need to besophisticated.
` Once a cluster has been
identified and it starts
developing, there areopportunities to promote it
and attract supporting
investment as well as
promoting business
opportunities externally
for cluster members.
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DEVELOPING DEMAND-LED SKILLS AND
EDUCATION TRAINING PROGRAMS
` A significant benefit to developing a cluster initiative isthat a
` key outcome of business networking will be an appreciation
of skills needs in the sector.
` When a number of businesses express a skills need, it ismore likely that training or education will be provided.A
lone voice is not likely to be taken as seriously.
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DEVELOPING CLUSTER-FOCUSED PUBLIC PROCUREMENT AND
LOCAL PURCHASING AGREEMENTS (CASE STUDY)
` The public sector is often the largest buyer in a city and assuch there are opportunities to enable local businesses to
access tender processes more easily.
` It is often difficult for small businesses, If its not in cluster,
to bid for large government contracts.` A cluster initiative here could help in to develop a food
supplier network to supply government catering needs.
` A logical cluster development initiative could be to
encourage suppliers of basic food products to enter into
some form of food processing.
` Cluster development activities could then move on to
transportation, storage and packaging of food products.
From there it is likely businesses could start retailing and
producing processed foods for the private sector.
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THANK YOU
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