Focusing on Regional Competitive Advantage

Focusing on Regional
Competitive Advantage
Module
Five
Reflecting on the Previous Session
• What did you find most useful or valuable?
• What progress have you made since then?
• Any questions or clarification needed?
Results From the Previous Session…
• Vision Statement:
“The Kiamichi SET region strives to utilize our
abounding natural resources while maintaining
our rich Native American culture. Through the
continued development of tourism and
recreation, we will enhance our total health care
system and improve the quality of life for the
region’s citizenry.”
Results From the Previous Session…
• What reactions to the Vision Statement did you
receive?
• What reactions to a membership organization did
you receive?
• How should we proceed in the near-term
organizationally? Can we construct a SMART
goal?
Overview of Module Five
• Investigate the elements that contribute
to regional economic advantage
• Explore regional data that may help
identify regional clusters
• Select clusters for further exploration
EXPLORING COMPETITIVE
ADVANTAGE
Competitive Advantage
Business shapes the
economic value of a
region, but places can
help shape, nourish,
and sustain local
enterprises and
industry.
Exploring Competitive Advantage
Demand
Conditions
Factor
Conditions
Competitive
Advantage
Elements
Firm Strategy,
Structure, and
Rivalry
Related and
Supporting
Industry
Based on Porter’s Diamond Theory – Porter, M. (1990)
Demand
Conditions
Factor Conditions
Competitive
Advantage
Elements
Firm Strategy,
Related and
Structure, and
Supporting
Rivalry
Industry
Demand Conditions
What conditions
influence demand
for goods or
services produced
in the region?
Demand
Conditions
Factor Conditions
Competitive
Advantage
Elements
Firm Strategy,
Related and
Structure, and
Supporting
Rivalry
Industry
Demographics of
the Kiamichi Region
Demand
Conditions
Factor Conditions
Competitive
Advantage
Elements
Firm Strategy,
Related and
Structure, and
Supporting
Rivalry
Industry
Demographics of
the Kiamichi Region
Demand
Conditions
Factor Conditions
Competitive
Advantage
Elements
Firm Strategy,
Related and
Structure, and
Supporting
Rivalry
Industry
Factor Conditions
• Infrastructure
• Resources & Materials
• Skilled Workforce
Factor Conditions: Workforce
Who are the region’s workers?





Skilled/unskilled
Labor force participation rate
Unemployment rate
Occupation mix
Experience/age
Identifying Skills in the Region
/
/
/
Demand
Conditions
Factor Conditions
Competitive
Advantage
Elements
Firm Strategy,
Related and
Structure, and
Supporting
Rivalry
Industry
Firm Strategy, Rivalry,
Composition
• Region’s portfolio of businesses
• Entrepreneurship activity and support
• Mix of industries
Business and Industry
Demand
Conditions
Factor Conditions
Competitive
Advantage
Elements
Firm Strategy,
Related and
Structure, and
Supporting
Rivalry
Industry
Related and
Supporting Industry
Do industries buy and sell
from each other regionally?
Do any strong value chains
exist in the region?
Value Chain Example
Winemaking
Equipment
Grape Stock
Fertilizers,
Pesticides,
Herbicides
Grape
Harvesting
Equipment
Irrigation
Technology
State Government
Agencies
Barrels
Bottles
Growers/
Vineyards
Wineries/
Processing
Facilities
Educational, Research
& Trade Organizations
Caps & Corks
Labels
Public
Relations &
Advertising
Specialized
Publications
California
Agricultural Cluster
Food
Cluster
Tourism
Cluster
Source: California Department of Food and Agriculture
OVERVIEW OF INDUSTRY
CLUSTERS
Industry Clusters Defined
Groups of similar and related firms in a
defined geographic area that share
common markets, technologies, worker
skill needs, and that are often linked by
buyer-seller relationships
Two Types of Clusters
• Value chains (Vertical
clusters): working
together toward a
common product
• Competing (horizontal
clusters): drawing from
the same raw materials,
infrastructure, labor force
Auto Industry
Software Industry
Identifying Industry Clusters
• Views firms and industries as
interdependent, not isolated
• Identifies value chains
• Discovers collections of businesses
producing similar outputs
Overview of Clusters in Your Region
Understanding Changes
Moving Up or Down
Change in
Percentage of
Jobs in Industry
over Time
Understanding Changes
Moving Left or Right
Relative Concentration of Industry
in the Region Compared to the Nation
Percent Change in Jobs over Time
Understanding Changes
Growth in % Jobs over Time
Growth in % Jobs over Time
Lower Concentration of Industry
in Region
Higher Concentration of Industry
in Region
Decline in % of Jobs over Time
Decline in % of Jobs over Time
Lower Concentration of Industry
in Region
Higher Concentration of Industry
in Region
Location Quotient: Measure of Concentration of Industry
Regional Clusters: 2002-2007
250.00
Adv. Mat.
Ag. Business
Apparel
200.00
AER
Biomedical
Business & Financial
150.00
2002-2007 % Change Jobs
Chemicals
Computer
Defense
100.00
Education
Electrical
50.00
Energy
Fabricated Metal
Forest
0.00
-1.00
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Glass
IT Telecomm
Machinery
-50.00
Mining
Primary Metal
Printing
-100.00
Transp. & Logistics
Transp. Equip.
-150.00
2007 LQ
Regional Clusters: 2006-2011
150.00
Adv. Mat.
Ag. Business
Apparel
AER
100.00
2006-2011 % Change Jobs
Biomedical
Business &
Financial
Chemicals
50.00
Computer
Defense
Education
0.00
-2.00
-1.00
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
Electrical
Energy
Fabricated Metal
Forest
-50.00
Glass
IT Telecomm
-100.00
2011 LQ
Behind the Bubble Chart
Kiamichi Region
Location
Quotient more
than 1 =
Concentration
2011 LQ
2006 Jobs
06-11 Job
Ch.
2011 Jobs
2011 Avg. Earnings
Type
Ag. Business
6.11
10,852
10,916
0.59
$20,282
Stars
Energy
2.80
5,175
5,013
-3.13
$47,762
Mature
Biomedical
2.33
3,695
4,169
12.83
$26,730
Stars
Business & Financial
1.45
2,263
2,598
14.80
$23,078
Stars
Transp. & Logistics
1.01
1,821
1,814
-0.38
$47,469
Mature
Forest
0.96
2,428
1,722
-29.08
$31,615
Transforming
Defense
0.54
993
968
-2.52
$41,594
Transforming
AER
0.48
864
861
-0.35
$16,883
Transforming
Mining
0.44
857
793
-7.47
$73,766
Transforming
IT Telecomm
0.44
816
781
-4.29
$42,718
Transforming
Adv. Mat.
0.25
296
447
51.01
$54,863
Emerging
Education
0.18
257
313
21.79
$18,293
Emerging
Printing
0.18
210
313
49.05
$29,091
Emerging
Chemicals
0.15
332
275
-17.17
$44,999
Transforming
Electrical
0.15
288
270
-6.25
$67,727
Transforming
Machinery
0.11
160
202
26.25
$60,875
Emerging
Fabricated Metal
0.11
94
196
108.51
$45,051
Emerging
Transp. Equip.
0.04
140
65
-53.57
$70,006
Transforming
Apparel
0.02
61
36
-40.98
$40,218
Transforming
Glass
0.01
24
10
-58.33
$55,536
Transforming
Computer
Primary Metal
Behind the Bubble Chart
Kiamichi Region
Industries
with
Greatest
Percentage
Growth
2011 LQ
2006 Jobs
06-11 Job
Ch.
2011 Jobs
2011 Avg. Earnings
Type
Ag. Business
6.11
10,852
10,916
0.59
$20,282
Stars
Energy
2.80
5,175
5,013
-3.13
$47,762
Mature
Biomedical
2.33
3,695
4,169
12.83
$26,730
Stars
Business & Financial
1.45
2,263
2,598
14.80
$23,078
Stars
Transp. & Logistics
1.01
1,821
1,814
-0.38
$47,469
Mature
Forest
0.96
2,428
1,722
-29.08
$31,615
Transforming
Defense
0.54
993
968
-2.52
$41,594
Transforming
AER
0.48
864
861
-0.35
$16,883
Transforming
Mining
0.44
857
793
-7.47
$73,766
Transforming
IT Telecomm
0.44
816
781
-4.29
$42,718
Transforming
Adv. Mat.
0.25
296
447
51.01
$54,863
Emerging
Education
0.18
257
313
21.79
$18,293
Emerging
Printing
0.18
210
313
49.05
$29,091
Emerging
Chemicals
0.15
332
275
-17.17
$44,999
Transforming
Electrical
0.15
288
270
-6.25
$67,727
Transforming
Machinery
0.11
160
202
26.25
$60,875
Emerging
Fabricated Metal
0.11
94
196
108.51
$45,051
Emerging
Transp. Equip.
0.04
140
65
-53.57
$70,006
Transforming
Apparel
0.02
61
36
-40.98
$40,218
Transforming
Glass
0.01
24
10
-58.33
$55,536
Transforming
Computer
Primary Metal
Examining the Leaky Bucket
The Regional
Economy
$
Goods or Services
Purchased outside
the Region
Looking at Regional
Expenditures
2011 Expenditures & Leakage*
Ag. Business
Energy
Forest
Transp. &
Logistics
Defense
Mining
Business &
Financial
Biomedical
IT Telecomm
AER
$0
$100
$200
$300
$400
Millions
$ In Region
$ Out Region
$500
$600
$700
Regional Industrial Clusters:
Digging Deeper
• Identify the industries within the cluster
• Determine if growing or declining
• Evaluate regional capacity
• Identify potential leakages & opportunities
• Determine potential strengthening strategies
Cluster Choices
•
•
•
•
•
•
•
•
•
•
Advanced Materials
Agribusiness, Food Processing &
Technology
Apparel & Textiles
Arts, Entertainment, Recreation
& Visitor Industries
Biomedical/Biotechnical (Life
Sciences)
Business & Financial Services
Chemicals & Chemical Based
Products
Computer & Electronic Product
Manufacturing
Defense & Security
Education & Knowledge Creation
•
•
•
•
•
•
•
•
•
•
•
•
Electrical Equipment, Appliance
& Component Manufacturing
Energy (Fossil & Renewable)
Fabricated Metal Product
Manufacturing
Forest & Wood Products
Glass & Ceramics
Information Technology &
Telecommunications
Machinery Manufacturing
Mining
Primary Metal Manufacturing
Printing & Publishing
Transportation & Logistics
Transportation Equipment
Manufacturing
Examining Clusters
in the Region
What industries:
• Seem worth exploring further?
• Should the region avoid investing for the
future?
• May be viable future regional industries?
• Are declining but may be worth reviving?
Homework for Next Time
• Identify the potential
clusters for the region
• Read the “C.A.R.E. for
the Region” flow chart to
prepare for Module Six
Final Reflections
 What topics did you
find most helpful?
 What did you find
confusing?
 What other data do
you need?
 Other items you want
to mention?
Looking Ahead to Module Six
• Identify the economic leaks in the region
• Explore basic avenues for strengthening
clusters
• Provide an overview of some specific
strategies within each avenue
• Select potential directions for the region
to explore

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