A Study on Cluster Brand Growth Based on Five Forces
Su-ping Zhou
School of Economics and Administration, Tianjin Open University, Tianjin China
(zhousptj@126.com)
Abstract - Cluster brand has brand identity, geographic
characteristics,
public
goods
characteristics,
brand
collaboration features, industrial advantages characteristic,
cluster-dependent, brand effect persistence, dynamic and
management Subject diversity, which plays important roles to
cluster by cluster cohesive, display power, identification
strength, competitive power, innovation power and
profitability and trust power. The paper analyzes five forces
for cluster growth, which is, cluster brand learning ability,
government impetus, industry associations cohesion, clusters
innovation impetus and cluster growth promoted power by
each other.
Keywords - cluster brand； five forces； cluster brand
learning ability ； government driving force ； industry
association cohesion； cluster innovation impetus； cluster
mutual growth promote power
I.
INTRODUCTION
Cluster brand is unified name, term, marks, symbols or
patterns of a same cluster aggregation space, complementary
or competitive relationship with the enterprise and its branch
in the same cluster. The role of the cluster brand is mainly
reflected on the advertising effect, the capital concentration
effect, the information transfer effect and the driving effect
of related industries.
II.
CLUSTER BRAND IDENTITY
A. brand characteristic
First, the cluster brand has the general characteristics of
the brand, such as property, interests, values, culture,
personality and customers.[6]
1) Attributes
Attributes refers to the quality connotation of enterprise
clusters and the impression given to evaluators that
represented by enterprises cluster brand, it may represent a
certain quality, function and efficiency, etc.
2) Interests
What evaluators caring are interests rather than
enterprise cluster’s attributes. In evaluators’ mind, enterprise
cluster brand is usually different degree of interest symbol.
3) Value
Enterprise cluster brand will form different hierarchy due
to their represented by the enterprise, product or cluster
quality and reputation, and thus form different value in
evaluators’ mind.
4) Culture
Enterprise cluster brand is the carrier of cluster peculiar
culture, what can make people produce various association
corresponding with its cultural background, thus to
determine choices and standards.
5) Personality
Enterprise cluster brand also reflect a certain personality,
make people think about some people or things what have
distinct personality characteristics, thus making the cluster
brand effective identification function.
6) Customers
Enterprise cluster brand is usually liked and chosen by a
certain customer groups, what implying unique cluster
segments market and target customers, and relevant
marketing strategy.
B. Regional characteristics
Enterprise clusters are concentrated in the same region in
which the certain resources endowment are more
advantages, therefore, cluster brand general has strong
regional characteristics, such as geographical characteristics,
and resource advantage or humanities history origin and
natural style, etc. It is the integrated embodiment on
enterprise brand, industry brand collective behavior in a
certain regional, have the general connotation of brand.[7]
C. Public product characteristics
Enterprise cluster brand is owned not by one enterprise,
but by many enterprises within a cluster, what will bring
jointly collective benefit, is common assets of enterprise
cluster, has typical public product characteristics.[2]Cluster
brand is enrichment and refine of many famous enterprises
brand essence in the region, and is unified brand with more
extensive and representative.
D. Brand coordination characteristics
The advantage of cluster brand is the coordination effect,
can reduce enterprise's marketing costs, show the enterprises
strength and image. But the biggest problem is easy to
generate brand collective punishment effect that affect
enterprise’s all products image and the entire enterprise
prestige for one product’s problems.
E. Industrial advantages characteristics
Cluster brand is a well-known brand common owned by
enterprises in an advantage industry, and with high market
share and influential in the industry market. The advantage
industry is the substance foundation and value foundation of
brand formation.
F. Cluster dependence
Cluster brand formation has obvious cluster dependence;
cluster is a support of cluster brand. For an enterprise cluster,
resources, traditional and historical opportunity are the
reasons for an industry initially at a regional district, form
the enterprises initial concentration. A large number of
relevant enterprises collection in a region, and gradually
form the regional proprietary element accumulation and
industrial structure. Thereafter, cluster gradually grows and
the overall competitiveness of enterprise clusters is
improved, gradually support an influential cluster brand.
Visible, the formation of cluster brand has obvious cluster
dependence and time dependence.
G. Brand effect permanence
Life cycle of single enterprise or individual product is
relatively short, so the brand effect is hard to sustain. Cluster
enterprise follows the competition of the survival of the
fittest, cluster brand effect can be sustain if there aren’t the
external causes such as technology, requirement or their own
conditions to cause a cluster be recession or transition.[10]
H. Dynamic
The development of enterprise clusters will experience
the different period of germination, development, maturity,
upgrade, recession, and so on, cluster brand will be produce
when enterprise clusters develop to a certain stage.
Subsequently, cluster brand will develop with enterprise
clusters, and cluster brand will also experience the different
stages of germination, development, maturity, upgrade,
recession and so on. When the enterprise clusters go toward
the downfall due to various reasons, the cluster brand also be
gradually decay. Cluster brand development is dynamic and
constantly changing.[11]
I. Management subject diversity
Cluster brand is intangible assets jointly owned by
multiple enterprises in cluster. Except each enterprise in
cluster, its management subjects have local governments,
industry associations, and other middle organization.
III.
THE DYNAMIC TO CLUSTER BY CLUSTER BRAND
Once the cluster brand is formed, its influence will lead
to more related with the regional enterprises to the region
gathered, at the same time, a lot of money, abundant labor,
advanced technology, timely market information and other
factors will also continuously flock into regions, which
provides a strong support to the cluster expansion and
technological upgrading. Furthermore, the public properties
of cluster brand need cluster enterprises to work together to
create and maintain, which conducive to the cooperation
among enterprises.
Therefore, the cluster brand plays roles to cluster by
cluster cohesive, display power, identification strength,
competitive power, innovation power and profitability and
trust power.
A. Cohesion
Cluster brand is intangible assets of cluster, and have
intrinsic and lasting cohesion. Cluster brand and enterprise
clusters complement with each other, bring out the best in
each other. Enterprise clusters produced a cluster brand, in
turn, cluster brand attracted many enterprise to concentrate.
B. Display force
Cluster brand is a display of enterprise cluster image and
the products reputation. Cluster brand represents advantage
of product price and product quality; also represents some
good social service offered by location, consequently, it can
effectively maintain enterprise customer loyalty within a
cluster, plays an important role to establish customers’ good
relationships by cluster enterprise. Good cluster brand can
ascend cluster’s whole image and establish cluster brand, is
equivalent to cluster established a cluster image platform for
cluster enterprises.
C. Distinguishing force
Clusters brand is the purchaser’s general cognition
formed a certain type of products in cluster regional, and
also is a kind of product image and value dimension based
on buyers’ cognitive, and this brand will be branded with
the obvious mark. The basic structure of the cognition is
obviously
cluster
products’
competition
status,
characteristics, advantages and disadvantages in the
industry market competition within a cluster, is the value of
product created to buyers. Once a well-known cluster brand
is established, it will help buyers’ to identify product; and
products within a cluster can expand market depend on
good brand recognition, which could obviously economize
marketing costs, laid solid market demand foundation of
large-scale development and expansion for cluster.
D. Competitiveness
Cluster brand is based on advantage industries in the
regional, is the intangible assets jointly owned by the
enterprise in the cluster. It’s not only the recognition
elements to distinguish the same industry between the
cluster and other clusters. It is an important source to obtain
market competitive advantage in enterprise clusters. If
cluster has a clusters brand with wide popularity and
reputation, it will become an important weapon that the
enterprise within a cluster to carry on the market
competition, what will has great significance to attract
cluster factor resources, enlarge market share, promote the
industry competitiveness.
E. Creativity
Creativity force refers to cluster brand helps to improve
innovation incentive effect of industrial cluster. Innovation
is the sources of sustaining competitive advantage in
industrial cluster, and innovation with technical innovation
as the core is a necessary conditions to upgrade the
enterprise industrial. Firstly, brand is the value and
commitment to provide to buyer, cluster brand needs high
quality products connotation as a support, what force cluster
enterprise pays attention to values technical progress and
innovations. Secondly, when the market effects and
competitive advantage of cluster brand has identified by
cluster enterprises, cluster brand will become a common
goal guide, what helps cluster enterprise to integrate
elements such as technical resources, human capital
innovation. Thirdly, enterprise organization innovation and
institutional innovation usually be accompanied in the
cluster brand strategy implementation process.
F. Profitability
For cluster enterprise is concerned, the benefits from
cluster brand is generated through enterprise enjoying the
intangible assets—cluster brand, and is the inner and lasting.
Cluster brand has the nature of public products to enterprises
in the cluster, once cluster brand formed, any enterprise in
the cluster will enjoy the benefits from cluster brand.
G. Trust force
Cluster brand promotions the formation of cluster trust
mechanism. Enterprise cluster’s network organization form
and competitive advantage produced from the division and
cooperation, long-term trade relations between enterprises.
Trust is the core mechanism to forming and maintaining the
long-term, stable trade relationship. The long-term
repeatability trading promoted the formation of enterprise
clusters trust mechanism, strengthening the long-term
cooperation within the cluster.[4]
IV.
FIVE POWERS ANALYSIS OF THE CLUSTER BRAND
Cluster brand growth is a positive process of cluster
brand value continuous improvement with the cluster growth
and the cluster brand recognition and reputation constantly
improve. This paper argues cluster brand growth related to
the five factors, which are cluster brand learning ability;
government driving force; industry association cohesion；
cluster innovation impetus；cluster mutual growth promote
power, analysis the five cluster brand growth forces（Figure
1）.
Government driving
force
Cluster innovation force
Cluster brand
learning ability
Cluster mutual
growth promote
power
Industry association
cohesion
Figure 1. The five forces of cluster brand growth
V.
ANALYSES OF CLUSTER BRAND'S FIVE FORCES
A. Cluster brand learning ability
1) Formal brand learning and informal brand learning
There are two ways to brand learning among cluster
enterprises: formal brand learning and informal brand
learning. Formal brand learning in the cluster is a formal
cooperation relationship established on formal contract
based on knowledge exchange among brand enterprises or
brand enterprises and research institutions. Informal
exchange of tacit knowledge transfer is an important way,
through two channels in the cluster: first, the social network;
second, associations or meetings. [11]
2) Vertical learning ability and horizontal learning
ability
Depending on whether locate the same link in value
chain; the cluster brand learning ability can be divided into
vertical brand learning ability and horizontal brand learning
ability. Vertical brand learning ability is products trade and
services learning ability located in the different link of value
chain, such as mutual participation in inter-organizational
and knowledge transfer in new product development
process; horizontal brand learning ability is learning ability
located in the different link of value chain, including a
variety of formal cooperation in brand development,
research and development cooperation, mergers and
acquisitions. There is an important way for disadvantaged
businesses to enhance the brand is copied to the other
brands, another brand of product, management, marketing
can be quickly copy in cluster, thus contributing to the
cluster brand growth.
B. Government driving force
1) Guiding force
In addition to the daily supervision of the cluster brand,
government can serve as a leading force in building the
cluster brand. As an administrative agency, government not
only concerned about regional economic growth, but also
the pursuit of full social and ecological benefits. Cluster
brand-building mode dominated by government focuses on
the formation cluster of the planning, direction and
management, through scientific review advantages resources
and features economy within the region, adjustment and
optimization industrial structure, vigorously cultivate
leading industries, to speed up the formation and upgrade of
cluster, to promote the formation of influential cluster brand
based on cluster.
2) Service force
Government service force is needed to grow cluster
brand. The nature and structure of government determines
its do not have the market adaptability and competitiveness
which the enterprises have in direct production and
commercial activities, it will distort the market mechanism
that government intervention in business operations and the
formation of cluster. Thus, the role of government in the
cluster analysis of the brand should be repositioned as a
public service government, and in order to achieve its
leading role.
3) Management power
Government should strengthen the supervision of the
cluster brand assets, through a clear definition and effective
protection of property rights, to stimulate economic agents
to rational use and protect brand. Strengthen the laws and
introduction effective disciplinary mechanism to reduce the
expected utility based on the non-cooperative game in illegal
business, to combat acts of break faith.
C. Industry association cohesion
Industry association is the economic organizations in
the same nature of economic activities, to volunteer create
the non-profit voluntary organization of social groups for
safeguarding the common legitimate economic interests.
Industry associations play verity roles such as provider of
information, business manager, coordination and service
providers in the process of cluster brand growth.
1) Information provider
As a representative of the general membership, industry
associations are specializing in the types of information
collection, collation and analysis, it have information
superiority can not be compared with other organizations.
[9]Industry associations in the cluster have information
database function. The Industry associations integrate a large
number of knowledge and information, represent the overall
interests of regional specific industry and have professional
and collective. Meanwhile, as the industry platform for
corporate communications, industry associations promote
the exchange and sharing of information among its
members.
2) Operators and managers
Industry association is set up by many enterprises
together within the cluster through specific institutional, it
charge fees and perform their duties for common goals of
enterprises in cluster. The industry association directly
cultivates and maintain cluster brand, and its more important
function is to build a good platform to provide industry
brand development. Industry Association promote regional
products and promote regional brand through a series of
planned management activities，Improve the technical and
product level, to enhance the cluster brand value.
3) Coordinator
Industry association and other intermediary
organizations have indispensable role as an intermediary in
the regional marketing activities and cluster brand analysis.
As a non-governmental voluntary organization formed by
regional enterprises, Industry association is an important link
to connect enterprise and enterprise, enterprise and market,
enterprise and government. By established related industry
associations in regional cluster, brand-building mode leading
by it play full leadership role in building regional brand.
4) Service providers
Industry association is also to play its unique services
function in brand establishment. Industry associations
strengthen the brand’s marketing efforts, focusing on market
information collection, carry out market research, technical
training, exchange of market information, provides business,
technology, and many other advisory services; to break all
kinds of market barriers and safeguard interests of the
industry. Professional services institution can accelerate the
enterprises growth by providing credit guarantees and
market development and foster cluster brand through the
provision of services for financing serves and business
counseling.
D. Cluster innovation impetus
Cluster innovation impetus has two modes: cluster
innovation network impetus and cluster innovation resources
impetus.
1) Cluster Innovation Network impetus
Cluster innovation network is a relatively stable system
on the basis of formal or informal long-term cooperation and
exchange relations among the various actors (companies,
universities, research institutions, financial institutions,
intermediaries and local governments). Cluster innovation
network is a solid foundation for the development of
regional brand.
2) Innovation Resources impetus
Cluster is a hotbed of enterprise innovation, which can
create an innovative atmosphere, provide innovative
resources and maintain a lasting competitiveness of the
brand. First, there has a good creative atmosphere in cluster.
Frequent informal exchange accelerates the innovation
diffusion, and has accumulated a large amount of
“organizational knowledge” and “social capital” for
enterprise innovation. Under the demonstration of the center
enterprises in cluster, the passive behavior easily be turned
into initiative innovation initiative sense and innovative
spirit, the innovation spirit rooted in local culture permeates
among industries formed the “industrial atmosphere”.
Second, the cluster provides good innovative resources.
Cluster has the function of business incubators. With the
continuous development of the cluster, a large number of
enterprises in the cluster have been derived.
E. Cluster growth promoted power by each other
It is closely related and mutual promotion between
cluster development and cluster brand development. As
noted above, the motive force to cluster form cluster brand
has
cohesive,
showing
strength,
identification,
competitiveness, innovation, profitability and confidence.
The motive force to cluster brand from cluster is as fellows.
1) Driving force
Cluster is the driving force to format the cluster brand.
The formation of cluster brand is followed with the cluster
production, growing and evolving. [3]This is because a large
number of interconnected companies and institutions
through cooperation and specialization form the localization
network, which not only overcome the dispersion and
uncertainty risk of individual enterprises participating in
market transactions, and avoid the low efficiency level of
enterprises. The internal mechanisms and flexibility
professional production of cluster concentration,
competition, cooperation, learning and innovation created
the cluster marketing advantage, which led to the formation
of cluster brand.
2) Training force
Cluster is easily birth famous-brand product and
enterprise. Cluster can generate external economy and
internal economy, which enable to significantly reduce
enterprises operating costs, significantly improve
specialization level, and create a good birth environment for
"leader" enterprises. “Leader” enterprises brand will be the
source of learning cluster brand.
3) Acceleration
Cluster is the accelerator of cluster brand
communication. Cluster formation can accelerate the spread
of the Cluster brand. In one area, cluster enterprises can
strengthen the marketing network to achieve synergies and
create a market advantage through the creation of cluster
brand. After a large number of enterprises to form cluster,
the intensity of advertising can be focus and form whole
cluster brand by group effect.
4) Maintenance power
Cluster conducive to the maintenance of cluster brand.
When the seller has more information than the buyer, the
“lemon” market is likely to occur; the low-quality goods will
expulsion the high quality goods. This would effectively
safeguard the regional brand. [1]Cluster has a unique
advantage in the manufacture and dissemination of “positive
market information”, so it can effectively maintain the
cluster brand.
VI.
REFERENCES
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CONCLUSION
Brand growth plays an important role in the cluster
growth. This paper analyzes five forces intended to clear the
of the growth elements of the cluster brand, so as to promote
the growth of the cluster.
ACKNOWLEDGMENT
This paper obtain China postdoctoral Science
Foundation on the 49th grant program, as the project “A
Study on Organization Informal Learning in Virtual
Learning Community ” (project code: 20110490309)
periodicity research achievements.
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