Academic journal article Innovation: Organization & Management

Managing Marketing Externalities in Innovative Natural Resources-Based Clusters

Academic journal article Innovation: Organization & Management

Managing Marketing Externalities in Innovative Natural Resources-Based Clusters

Article excerpt

1. INTRODUCTION

The role of inter-organisational networks and inter-personal networks in industrial clusters is not new. Research conducted by Chetty and Agndal (2008) shows that despite the initial reluctance for firms to collaborate in industrial districts, organisations learnt to maintain a balance between competition and cooperation. This is done through formal and informal formalisation of relations between actors at the organisational and individual levels.

The above is key for firms to compete in global markets. However, doing this in the Chilean economy, which is predominantly based on natural resource exploitation, is not easy.

It is well known that there are difficulties and opportunities to achieve business, economic and social growth based on natural resource-dominated industries. For example, over the past five decades, Scottish businesses have made concerted efforts to diversify into more knowledge-based forms and compete in global markets, with varying degrees of success. Firms have often achieved greater competitiveness and growth, and new firms have formed more frequently when they work within a cluster.

Clusters, however, do not form spontaneously, but are heavily influenced by promotion, funding, public policy, social awareness, open collaborative values and formal professional management over decades.

This research is concerned with cooperative strategies among natural resources cluster-based firms, illustrated by the factors that influence the development of co-marketing activities. Theorists have consistently demonstrated the role and importance of economic externalities, such as knowledge spillovers, within industrial clusters. Less research attention has been paid to the investigation of marketing based externalities and their influence on the competitive strategy of firms, though it has been suggested that these may also accrue from geographical agglomeration. This under-explored issue in the literature is addressed in this research.

The main research objectives of the paper are: (1) to examine the relationship between the issues related to regional clusters in developing positive externalities which yield inter-firm cooperation in marketing; (2) to explore to what extent elements of co-location and networking influence inter-firm co-operation in marketing; and (3) to compare similar clusters in two different countries.

The paper starts by reviewing the literature related to geographic co-location and social networking. The research methods and industry selection are presented later highlighting the relevance of this specific industry for this study in a comparative perspective between Scotland and Chile. Finally, results, conclusions and recommendations are presented.

2. LITERATURE REVIEW

Industrial districts have received substantial attention from scholars in several fields, as well as from governments and policy-makers during the last few decades. Small countries heavily dependent on natural resources such as New Zealand, Denmark, Sweden, Finland, Scotland and Chile the concept of 'industrial district' has been used by policy-makers to encourage more generic collaboration and clustering of economic activity for foster international competition.

Chetty and Agndal (2008) discuss that in particular, industrial districts have been used by SMEs to develop their international markets, to develop innovative products and marketing strategies, and to identify business opportunities. These industrial districts allow SMEs to benefit from economies of scale. Policy-makers have recognized the importance of SME leaders in acting as catalysts to initiate the development of an industrial district (Chetty 2004).

Firms in regional clusters may discover that although the district allows for increasing collaboration, it simultaneously fosters competition. Balancing collaboration and competition thus becomes an important aspect of belonging to an industrial district (Chetty & Agndal 2008). …

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