Study On Competitive Advantages Of Township And Village Enterprises Based On Industry Cluster

In China, township and village enterprises play an important role in society. It is a result of Rural Economic System Reform in the 20th century. It has been 30 years since the first entrepreneurship emerged. It is well known that township and village enterprises have been promoting economic prosperity, increasing farmers' income and offering job opportunities.With the world economy going global, the township and village enterprises now are facing great competition from the international firms. It is an urgent issue to know how to survive and develop in this competitive environment, especially through industrial clusters. That's why I did the research on "how to promote the competitive advantages of township and village enterprises".In the research, the system economics and management theories have been employed, which include the theory of Industrial Clusters, the theory of Competition Advantage and the theory of Industrial Organization, and etc.. Furthermore, based on the data of a fielded trip investigation, the nature-determines, quantity-determine and main component analysis have been used to improve the competitive advantage and efficiency of the township enterprises. With the optimization of the effective measure, "bottleneck" of the development is expected to be solved. Also, I discuss the competitive advantage-producing mechanism by Game theory. An appraisal system of competitive advantage for township and village enterprises in industrial clusters is formed on empirical research. By the analysis of township and village enterprises data and investigation, I give the following pieces of advice on the realization of critical path to promote township and village enterprises' competitive advantages.The main conclusions of the thesis:1. Connectivity between industrial clusters and Business Competitive AdvantageBased on document study, the connectivity between industrial clusters and business competitive advantage is researched in term of labor division based on specialization, transaction cost, economies of scale and etc.. We draw a conclusion that industrial cluster is a production networks based on the division of labor based on specialization and industrial division chain. It can allocate resources more efficiently. In nature, industrial cluster is an externalization of interior separation, which brings internal economics of scale, internal efficiency and external economy of scope. 2. Game Analysis on township and village enterprises' competitive advantage in industrial clustersUsing game theory to look at the different benefits of the relevant parties in the system and find out the concealing characteristic of the township and village enterprises in industrial clusters. Main respects mentioned are price, credit and supply chain. As a result of products gathering, industrial clusters can bring lower price, so township and village enterprises can gain price competitive advantage.Besides, credit as an important foundation of interior control mechanism in industrial clusters, is useful for township and village enterprises to contain opportunity, to reduce information asymmetry and to bring down transaction cost. In industrial clusters, the township and village enterprises can realize resource integration based on supply chain and promote competitive advantages formation. Especially, industrial clusters can act as "the role of leader". It is a driving force through resource sharing, first-mover advantages and advantages of latecomers.3. Evolutionary pattern of industrial clustersUsing life cycle theory of industrial cluster, based on the field investigation of industrial clusters in HeBei province, we find out that four are some kinds of evolutionary pattern of industrial clusters, such as traditional skill developing pattern, corporate champion leading pattern, market-oriented pattern and government-led development pattern. The study shows that it is a common phenomenon for the development of industrial clusters. With the help of spreading effect, optimization of resources allocation and economies of scale, industrial clusters can help township and village enterprises gain competitive advantages.4. Analysis on effect factors of township and village enterprises' competitive advantages in industrial clustersBased on theoretical analysis and evaluation models of township and village enterprises' competitive advantages, in principal component analysis (PCA) and regression analysis, we got four principal components including enterprises cooperation, enterprise functioning, cluster environment and marketing response. These components are in relation to government, clusters and township and village enterprises. By further regression analysis, we found out some specific factors—complementary between enterprises, information sharing, division of labor based on specialization, etc..Based on the above conclusions, the thesis puts forward some strategies and suggestions: 1. To forge regional industry cluster characteristic.2. To improve the informing and promotion of industry cluster by Creative Technology.3. To build the brands of industrial clusters and hence to integrate entirety advantage for enterprise group.4. To set up the platform for cooperation by cluster supply chain.The main original views of the thesis are as follows:1. The originality in research angleThe thesis researches the township and village enterprises' competitive advantages from the accumulative effects of industrial clusters. It finds out that industrial cluster gains economy of scale and economy of scope because of the separation of function and extemalization. These factors react on township and village enterprises to improve their competitive advantages.2. The originality in research methodThe thesis applies game theory to explain competitive advantage of township and village enterprises in industrial clusters in term of supply chain. The industrial clusters based on supply chain gain competitive advantages because it can get scale advantage by horizontal expansion and get cost advantage by vertical integration. The method gives a good explanation for the reasons why industrial clusters can bring lower transaction costs. On the other hand, the thesis applies case method to research. With the help of field surveys of two handured and seven industrial clusters in Hebei province, we sum up four evolutionary patterns of industrial clusters. It is a good support to the theoretical study, andit can help the local government's decision as well.3. The originality in research conclusionsThe thesis finds out that industrial clusters based on supply chain is different from general industrial clusters: its extension is larger and its connotation is broader. Township enterprises in supply chain prefer teamwork, since their efficiency depends on not only themselves but also cooperation between firms and clusters. So it can of great use to build a platform for cross-chain cooperation. The conclusion is a rewarding supplement for existing achievements. Last but not the least, the research findings can be helpful policy making references for the government.