Two North-Italian Clusters
by Alfa Diallo
The text describes two North-Italian Clusters’ (chair cluster of Manzano, and
the wine cluster of Conegliano- Valdobbiadene) most important characteristics.
The hypothesis is that now days in a cluster’s effectiveness innovation and integration
are the most important factors. The cases seem to prove this hypothesis.
What is common in chairs and wines?
First this question looks really difficult because with standard logic it is
quite impossible to figure out the connection. One can assume that it is much
more comfortable to drink wine if one sits in a chair. It is a possible
solution too, that if someone drinks too much wine it can be really difficult
for him to succeed in sitting down in a chair at first time.
I can imagine an infinite number of
creative solutions to my question but this time I will speak about a special
connection which relationship is not a real linkage only the creation of my
imagination. In this blog post I will examine the role and effectiveness of two
very famous North-Italian clusters, and by doing this comparison, I am trying
to identify some general conclusions about the characteristics of the clusters.
The two protagonists this time will be the chair cluster of Manzano and the wine
cluster of Conegliano and Valdobbiadene.
Before I start my examination it is
really important to define what a cluster is, and describe in a few words, that
why are they important in the modern business system. Because of the
globalization most business theorist thinks that in most of the markets a new
competition type has risen, because instead of competition between firms the
dominant effect now is the competition between networks. As these forces became
more dominant, many types of networks got popular. One type of these networks
are clusters in which firms and other institutes that work in the same field
and geographically concentrated mutually cooperate in some of their operating activities.
Now I will present two real example of this type of connection.
The first cluster I will describe
more, in detail will be the chair cluster of Monzano. The tradition of chair
making is really old in North- Italy so there are many firms that are
specialised on producing chairs. The problem is that most of the production
firms of the regions were small or medium sized companies so alone it was
nearly impossible for them to face the rising rate of competition. That is why
the cluster of Monzano was formed involving the small and middle sized firms of
the region and some big firms too. The core competence of the cluster that it
has a high reputation in the Italian market, and being a member is a guarantee
for the consumers that the purchased product has a high quality.
The cluster is not highly integrated
because mostly it is only a horizontal type of cooperation because the activity
of the firms in the cluster is quite the same. This is the reason why most of
the common activity in this cluster are centralised around the production, so
it is about how to organize the production process the most efficient way. One
channel of this is the joint acquisition of raw materials and long term contracts
with the suppliers at a cluster level. Of course there are other joint
activities like marketing and research and development but these factors are
less important. There are some non-market members of the cluster like the
University of Udine and the University of Trieste that insure the supply of
trained workforce.
The second cluster to examine is the
wine cluster in Conegliano and Valdobbiadene. The structure of the industry is
much similar than it was by the case of chairs. There are many small and middle
sized firms that traditionally operate in the industry, and at the market of
wine reputation is as important as on the market of chairs. So the conclusion
in this case is quite the same. In order to survive the firms had move into a
closer cooperation so they formed a cluster.
But the similarities end here. The
wine cluster is much more integrated, than the chair cluster because we can
identify horizontal and vertical cooperation too within its members. The focus
of the cooperation is different too, because there main activity is based on
research and development with the first research centre of wine industry in
Italy. The other activities of the cluster are highly integrated too, because
they use common marketing campaigns or make wine fests together.
So we saw two similar industries with
two different types of clusters. But why is this so important? As we look at
the recent trends of the clusters we can see, that both were hit by the
recession, but the recovery paths are quite different. The chair cluster faced
a huge setback at productivity and many problems emerged. The smaller firms
stated that the bigger firms have too much power in the decision making of the
cluster, because there is not enough interdependence between the firms. The way
out looks to be some kind of common research and development activity, and much
more integrated all day operation. On the other hand the wine cluster only
faced a small setback and the estimations show that they will produce five
times as much wine as now until 2035.
The main message of my text is that
close networks really matter in modern business life so in clusters we should
focus on the “double I rule”, because integration and innovation matters the
most. And what is common in wines and chairs? I think it is still hard to say.
