Competitive advantage is a key element for the continuous improvement and success of a company and, indisputably, this term is nowadays linked to the business cluster. Do you want to know more about it? Below we will tell you everything you need to know about business clusters and what they can offer your company.

What is a business cluster?

It is normal that with so many new terminologies in the business world, you may wonder what a cluster is. However, we will show you that we are talking about something that is not new, it has only evolved over time to become what it is today.

The simplest way to define a business cluster is to understand that it is a grouping of companies in a specific geographic sector. These companies may or may not have specific issues or matters in common that contribute to their union within that geographic space.

In general, clusters are a tool whose implementation multiplies the productivity possibilities of a company or an entire business sector. They are production systems with the capacity to direct and configure a group of companies in the same territory (state or region) with a division of tasks that complement each other.

A clear example that materializes this concept is Silicon Valley, the U.S. region known for its ability to attract and retain not only talented professionals in demand worldwide, but also large investments in technology.

What is a business cluster for?

It’s no secret that today’s marketplace is much faster, more complex and global than it used to be. The best way to stay up to date on innovations and product cycles and, moreover, to be able to face the competition is to share knowledge within a business cluster.

Cluster development initiatives propose an important new direction in economic policy. Because they build on previous efforts in macroeconomic stabilization, opening up to new markets, privatization, reducing costs of doing business, clusters are perfectly capable of improving competitiveness in today’s economy.

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Types of business clusters

Making it clear that a business cluster is a grouping of companies in a given territory, we can continue by adding that these can be of a different nature.

Although several types of business clusters can be identified, the most common are the ones listed below:

Vertical cluster

They are designed to group companies or industries that have a relationship with sales and purchases. This type of cluster is for companies that are also linked through their product and supply chains.

An example of a vertical cluster is the relationship between companies that assemble vehicles and those that manufacture auto parts.

Horizontal cluster

In horizontal clusters there are interconnections between companies at the same level, in order to be able to share common resources and tools. They seek to pool their knowledge and feedback in order to be able, for example, to advance in terms of innovation and technology.

Two other clusters start from the horizontal clusters:

1. High technology cluster

Clusters of this type have institutions, well-known universities and research centers at their core and are very well adapted to the knowledge economy.

In addition, their main focus is the development of technology, as their name implies.

2. Industrial cluster

This is a group of companies related to the distribution of goods and services and production, such as suppliers, engineering and technology companies and research and design centers.

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What are the objectives of business clusters?

A business cluster has multiple objectives that are intended to benefit your company beyond profits. Some of these are:

• Expand brand presence.

• Generate new customers and sales for all companies participating in the cluster. This happens because all users notice better buying opportunities.

• Offer new business opportunities. This is another of the cluster’s objectives: to initiate new business, whether online or physical, and to establish relationships with different brands.

• Increase the capacity to innovate through cooperative research and more intense competition.

• Expand and develop new ventures.

• Increase business productivity through specialized inputs, synergistic mergers, access to public goods and incredible amounts of information.

Where are the business clusters in Spain?

In previous paragraphs we mentioned Silicon Valley as one of the most recognized business clusters today. But, an interesting question is: where are the business clusters in Spain?

Madrid Network

To begin with, in Spain there are relatively recent examples of the establishment of a cluster.

For example, in the Community of Madrid, there is Madrid Network, a network that brings together 12 industrial sectors such as automotive, health, finance, renewable energies, graphic design, etc., as well as 4 technology parks associated with universities.

Together they form a network of approximately 400 companies.

Fashion business cluster

Another important cluster to mention is the fashion industry cluster. In this cluster, Milan, New York, Paris and Madrid are the most prosperous destinations in the industry. All of them are surrounded by a creative climate that makes them worthy of hosting various events that support and promote the evolution of this sector.

Generally speaking, most companies are a bit reluctant to share their knowledge and wisdom, but in the case of this cluster, doing so has a great advantage.

Beauty Cluster

Beauty Cluster is a private association that promotes collaboration with the aim of improving competitiveness and sustainable development in the cosmetics, perfumery and personal care sector. Today, it is made up of 240 companies, making it the leading beauty cluster in Spain and the second in Europe.

It promotes internationalization, innovation, digital transformation and training. In fact, it is the only Gold Laber accredited beauty cluster worldwide.

In addition, Beauty Cluster is the founder of the first organization with specialized business training in beauty, Beauty Business School. It also created the first B2B (Business to Business) marketplace for the perfumery and cosmetics industry.

In closing, we can conclude that a cluster is a tool that will help the companies that participate in it gain greater competitiveness, as long as they are committed to developing and streamlining the processes.

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At TAS Consulting we are committed to taking your company to the next level, whether you want to expand your horizons, seek new market opportunities, become part of a major business cluster in Spain or, who knows, start your own. But, to do so, you have to start! Contact us through our website and if you have a question write to us, our professionals will answer you in less than 24 hrs.