Abstract:

Clustering is a very important business strategy in enhancing a firm’s performability. Porter provided a seminal theory in this field, but it has three limitations. First, the current theory cannot explain how cluster emerges. Second, a narrow perspective on geographic configuration has limitations in explaining a variety of real business practices. Lastly, Porter’s cluster concept is domestically oriented and understates multinational activities in terms of enhancing corporate performability. Embracing these limitations, this paper extends Porter’s cluster theory and provides a more comprehensive view on the real business world. We then apply it to a successful cluster strategy used by Samsung Electronics Corporation to enhance its performability.