Cluster Development Strategy

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Cluster Development Strategy
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Outline of Discussion

• Overall map of clusters in Thailand
• Cluster Development Tools
• - Cluster Map
• - Diamond
• - Supply Chain
• - Value Chain
• Example
• Q A

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Clusters in Thailand
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Competitiveness Definition
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???????????????? The only meaningful concept of
competitiveness at the national level is national
productivity. ??????????????????????
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????? Competitive strategy is about being
different. It means deliberately choosing a
different set of activities to deliver a unique
mix of value. Michael E. Porter
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Cluster Definition
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Clusters are geographic concentrations of
interconnected companies, specialized suppliers,
service providers, and associated institutions in
a particular field that are present in a nation
or a region.
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Cluster Competitiveness
Some Key Characteristics 4 Cs

• Concentration/critical mass in one location

• Connectivity among core businesses, relating and
  support industries, specialized institutes, and
  public agencies.

• Commonality problem, objective, strategy

• Continuity of improvement- innovation

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Cluster Competitiveness
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• ???????????????????????? ?????? Cluster Map
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Cluster Development Tools
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Diamond Model

• A local context and rules that encourage
  productivity
• Incentive system
• Open and vigorous local competition

• Presence of high quality inputs
• Human resource
• Capital resource
• physical infrastructure
• administrative
• information
• scientific and technology
• natural resource

• Sophisticated demanding
• Local needs that anticipate those elsewhere
• Unusual local demand and specialized segments
  that can be served locally and globally

• Capable, locally base suppliers and firms in
  related field
• Presence of cluster instead of isolated industry

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Supply Chain
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Value Chain
FIRM INFRASTRUCTURE ( E.G. Finance, Planning )
HUMAN RESOURCE MANAGEMENT
M
TECHNOLOGY DEVELOPMENT
A
PROCUREMENT
R
G
I
INBOUND LOGISTICS
OPERATIONS (Manufacturing)
OUTBOUND LOGISTICS
MARKETING ANS D SALES
AFTER SALE SERVICE
N
PRIMARY ACTIVITIES
Source Michael Porter, The Competitive Advantage
of Nations
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Value Chain
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Western Thailand HVAP Cluster
High Value Agricultural Produces

• Geographical segment includes 4 provinces
  NakhonPathom, Ratchaburi, Supanburi and
  Karnchanaburi, total vegetable plantation area
  220,000 rai (35,200 ha)

• Produces include asparagus, corn, okra, and
  pepper

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Super store
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Air Freight
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LOGISTICS
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Western Thailand HVAP Cluster Map
GOVERNMENT AGENCIES

• Ministry of Agriculture, DOA, DOE, FDA
• Provincial Governor
• Local authorities

Strong linkage with cluster
Weak linkage Missing pieces
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Western Thailand HVAP Cluster Diamond
Export market demand on food declared the
safety from chemical free residue and sanitary
produces - Weak domestic market
DEMAND CONDITIONS
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Western Thailand HVAP Strategic Issues
Traceability CDIS
Cool Chain/ Perishable storage
International Acceptance SGS
EurepGAP
Data Base
Logistic
Certification
Production

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Western Provinces GAP Cluster Activities
Dr.Taksin Shinawatra Prime Minister
visited Western GAP Exhibition on 13 May 2004
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Southern Marine Food Cluster
Investment 1,089 mil Employment 7,771
Production 130,000 tons ( 2nd
largest)
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Southern Marine Food Cluster Map
GOVERNMENT AGENCIES
Department of Fisheries, Livestock Development
Department, Ministry of Public Health, and of
Agriculture and Cooperative Provincial Local
governments
SUPPORTING INDUSTRIES
RELATED BUSINESS
CORE BUSINESSES
Canning 1
Fishing Fleets 600
Canned Finfish 10
Frozen Processed Shrimp 3
Packaging
Community Fishermen
Financial Venture Firms
Producers
Technology
Thai Frozen Food Association
Prince of Songkhla University
FTI
KIASIA
BIOTEC
Specific training, RD
Cluster organizations
Strong linkage with cluster
Weak linkage
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Southern Marine Food Cluster Diamond
90 for export - Low cost and labor intensive

• Lack of labor
• Lack of tuna supply

Growth rate at 3-5 - Depend on only few major
market
DEMAND CONDITIONS
Strong government policy to promote food safety
and to develop market expansion Kitchen of the
World

• Lack of RS industries
• Lack of RD

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Southern Marine Food Strategic Issues
Frozen Shrimp

• To regulate and motivate a GAP, GMP, and imply
  the HACCP for the shrimp industry
• To legalize the cheap labor from neighboring
  country
• Processors group together and acquire direct
  supply from the farmers
• Establish shrimp fund to support RD

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Southern Marine Food Strategic Issues
Canned Tuna

• Develop deep sea fishing to ensure continuous
  supply and increase capability by using new
  technology
• Close collaboration between public and private
  to solve the NTB issues

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Southern Marine Food Cluster Actions

• Opportunity for Investment
• Deep sea fishing fleet with lab
• Freeze dryer to preserve food products
• Lab and Certification system for Marine Food
  Products

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Thank you for your attention
Q A