Concentrated Cluster Theory

Concentrated Cluster Theory

Introduction

This paper intends to discuss the significance of managing supply chains. The theory of concentrated clusters and its effectiveness towards managing supply chains and improving companies' performance will be explored. Moreover, the differences prevailing in international and domestic supply chain situations will be discussed. Lastly, the negative sides of concentrated cluster theory will be focused in order to provide an overall view of this concept. The purpose of this paper is to enhance the concept of concentrated clusters from the viewpoint of managing supply chains both internationally and domestically.

Discussion

Concentrated Clusters and Supply Chain Management

The management concept of concentrated clusters tends to improve the overall firm's performance by improving the relationships between the supplier and the customer. The core of supply chain management activities utilizes the concept of concentrated clusters in order to take the advantages of suppliers' clusters because such clusters are connected to various companied and businesses within the same operating industry of the particular firm. Moreover, the concentrated clusters enhance the management of supply chains and improve the company's performance by allowing the company to get familiar with the specific needs of customers (Charlie, 2008 Pp. 50-78).

The creation of supply clusters assumes to amalgamate the activities of producers, transporters and suppliers together. This amalgamation allows all the three participants to coordinate and depict unity in all the business ventures. I believe that concentrated clusters enhance the management of supply chains by achieving the trust and acceptance within the industry. This concept of concentrated clusters improves the company's performance by enhancing customer satisfaction and reducing overall costs. Becoming a part of concentrated clusters, allow companies to promote the atmosphere of mutual commitments and interdependence within the business environment. Concentrated clusters facilitate companies to provide better access to information and motivation to employees and suppliers. Lastly, ...