Extra information WPOs
WPO2: Regional clusters and ecosystem actors
The image is a business ecosystem.
“A business ecosystem is a community of interacting organizations and individuals that affect each other. The community
produces goods and services of value to customers, who are themselves members of the ecosystem. The community includes
suppliers, producers, distributors, government, competitors, and other stakeholders.”
It visually maps out the key components and relationships that support a business from idea to market. Here's a breakdown of
what it shows:
Core Process (Centre of the Diagram)
• R&D, Design → Manufacturing → Brand Name
This is the central value chain of a business, showing how a product or service is developed, produced, and
branded.
Surrounding Stakeholders and Inputs
Inside the main circle
These are direct contributors to the business's core value chain. They represent the internal flow of how a product or service
is created and brought to market.
• Materials, Components, Subsystems Supplier (blue arrows): Provide the physical inputs needed for
manufacturing.
• Complementary Products Supplier (purple arrows): Offer products that enhance or work with the main product.
• Retail Channel (green arrows): Distribute the final product to customers.
• Investment Goods Supplier (red arrows): Provide machinery, tools, or infrastructure needed for production.
• Service Provider (yellow arrow): Offers services that support the business, such as IT, logistics, or maintenance.
,Outside the main circle
These are external but critical supporting or enabling actors. They influence or support the internal process without being part
of the production chain and are essential for the business to function effectively
• Staff Functions: Includes consultants, trade shows, press supporting roles that help with expertise, exposure, and
communication
• Regulators and Standardization Bodies: Ensure compliance with laws and standards.
• Ecosystem Animator: Networks and individuals that collaborate or co-create value.
• Finance: Includes banks, investors, and subsidies (government) that fund the business.
This diagram emphasizes that a successful business is not isolated, it thrives within a network of interconnected players
Regional Clusters
= are subsets of a business ecosystem connected to a specific region or area. A regional cluster is a group of of businesses,
suppliers, and institutions that are located close to each other and work in the same industry. They from a network that
enhances innovation, productivity, and economic growth.
Examples: Silicon Valley (USA) – Technology & Startups • Hollywood (USA) – Film & Entertainment • Detroit (USA) –
Automotive Manufacturing • Shenzhen (China) – Electronics & Hardware • Bangalore (India) – IT & Software Services •
Paris (France) – Fashion & Luxury Goods • Flanders (Belgium) - Biotech and pharma
In clusters you have main companies but also support companies:
Examples: Contract Research Organisations – Incubators and Accelerators – Research & Development Centres – Venture
Capital Funds – Science Parks
How/ Why do clusters exist?
• Higher concentration of talent
• The clusters benefit from a supportive environment tailored to the needs of the industry
• Proximity to suppliers and customers reduces costs and improves efficiency
• Favourable legal and regulatory environment can attract and retain businesses in a cluster
Cluster Characteristics (how):
• First-Mover advantage & early growth
• Access to capital & investment
• Talent pool & knowledge spillover
• Strong industry & supplier networks
• Government & policy support
• Market size & global reach
Cluster Characteristics (why):
• Critical mass and resources
Reduced search and hiring costs because it’s easier to find and hire the right people and skilled workers are
attracted to the area
• Innovation dynamics
High levels of technological spillovers and innovation due to proximity, access to suppliers gives higher levels of
flexibility to innovate quicker and high levels of competition and peer pressure pushes everyone to improve
• Trust and social capital (relationships)
Deals are sealed by a handshake and collaboration are mostly informal, but when trust breaks third parties do need
to be brought in to resolve differences
Social capital is like other forms of capital, it works as a production factor. Just like a piece of capital equipment has value
because it reduces friction, expense, or human labour, so do established norms, trust and relationships.
• = value created by relationships, trust and cooperation. It’s like a network of connections that helps individuals and
organizations work together more effectively.
,In Silicon Valley, trust plays a crucial role in fostering collaboration, innovation, and the overall success of the ecosystem.
• Facilitates Collaboration
• Promotes Risk-Taking
Enhances Networking
• Encourages Investment – investors tend to invest a lot in startups found in regional clusters
• Fosters Reputation
Downside to too much trust?
• Someone can create a product that doesn’t work and will still be able to sell due to the trust people have in them
Why do you think some clusters become globally dominant (like Silicon Valley) while others stop existing?
• Technological advancements
• Lack of companies acknowledging/admitting that their clusters are not keeping up compared to others and they
would gain from switching to other clusters
• It is important to identify a change of trends
Creative destruction: a case in which companies need to destroy their own product to continue existing and not fail
, WPO 3 Supply Value and Value Chain
Typical exam question: what do the supply and value chain of *insert company name * look like?
What is a supply chain?
• = Network of companies and people that are involved in the production and delivery of a product or service.
• = It covers several activities, starting with the transformation of raw materials into finished products and ending
with their distribution. Every step adds value to the product.
• Components of a supply chain: producers, vendors, warehouses, transportation companies, distribution centres, and
retailers.
• Functions of a supply chain: product development, marketing, operations, distribution, finance, and customer
service
Why is supply chain management important? What are elements you have to consider?
• Sustainability (e.g.: SDGs)
• Efficiency (e.g.: breakdown time)
• Location -> global or local
• Cost efficiency
• Inventory & warehouse management
What is the bullwhip effect?
• = A phenomenon in supply chain management where small fluctuations in consumer demand cause progressively
larger fluctuations in demand at the wholesale, distributor, manufacturer, and raw material supplier levels.
What is a Value chain?
• The process or activities by which a company adds value to an article, including production, marketing, and the
provision of after sale services.
• Supply chain is focused more on external factors and the value chain is focused more on internal factors
Porter's Value Chain. It helps organizations analyse specific activities through which they can create value and gain a
competitive advantage.
Primary activities (directly related to production and delivery): the core business functions that create and deliver a product or
service
Support activities (indirectly support primary activities): enhance the efficiency and effectiveness of primary activities
Margin: the difference between the total value created and the cost of performing the value chain activities. Profit is
generated when the value exceeds the costs.
WPO2: Regional clusters and ecosystem actors
The image is a business ecosystem.
“A business ecosystem is a community of interacting organizations and individuals that affect each other. The community
produces goods and services of value to customers, who are themselves members of the ecosystem. The community includes
suppliers, producers, distributors, government, competitors, and other stakeholders.”
It visually maps out the key components and relationships that support a business from idea to market. Here's a breakdown of
what it shows:
Core Process (Centre of the Diagram)
• R&D, Design → Manufacturing → Brand Name
This is the central value chain of a business, showing how a product or service is developed, produced, and
branded.
Surrounding Stakeholders and Inputs
Inside the main circle
These are direct contributors to the business's core value chain. They represent the internal flow of how a product or service
is created and brought to market.
• Materials, Components, Subsystems Supplier (blue arrows): Provide the physical inputs needed for
manufacturing.
• Complementary Products Supplier (purple arrows): Offer products that enhance or work with the main product.
• Retail Channel (green arrows): Distribute the final product to customers.
• Investment Goods Supplier (red arrows): Provide machinery, tools, or infrastructure needed for production.
• Service Provider (yellow arrow): Offers services that support the business, such as IT, logistics, or maintenance.
,Outside the main circle
These are external but critical supporting or enabling actors. They influence or support the internal process without being part
of the production chain and are essential for the business to function effectively
• Staff Functions: Includes consultants, trade shows, press supporting roles that help with expertise, exposure, and
communication
• Regulators and Standardization Bodies: Ensure compliance with laws and standards.
• Ecosystem Animator: Networks and individuals that collaborate or co-create value.
• Finance: Includes banks, investors, and subsidies (government) that fund the business.
This diagram emphasizes that a successful business is not isolated, it thrives within a network of interconnected players
Regional Clusters
= are subsets of a business ecosystem connected to a specific region or area. A regional cluster is a group of of businesses,
suppliers, and institutions that are located close to each other and work in the same industry. They from a network that
enhances innovation, productivity, and economic growth.
Examples: Silicon Valley (USA) – Technology & Startups • Hollywood (USA) – Film & Entertainment • Detroit (USA) –
Automotive Manufacturing • Shenzhen (China) – Electronics & Hardware • Bangalore (India) – IT & Software Services •
Paris (France) – Fashion & Luxury Goods • Flanders (Belgium) - Biotech and pharma
In clusters you have main companies but also support companies:
Examples: Contract Research Organisations – Incubators and Accelerators – Research & Development Centres – Venture
Capital Funds – Science Parks
How/ Why do clusters exist?
• Higher concentration of talent
• The clusters benefit from a supportive environment tailored to the needs of the industry
• Proximity to suppliers and customers reduces costs and improves efficiency
• Favourable legal and regulatory environment can attract and retain businesses in a cluster
Cluster Characteristics (how):
• First-Mover advantage & early growth
• Access to capital & investment
• Talent pool & knowledge spillover
• Strong industry & supplier networks
• Government & policy support
• Market size & global reach
Cluster Characteristics (why):
• Critical mass and resources
Reduced search and hiring costs because it’s easier to find and hire the right people and skilled workers are
attracted to the area
• Innovation dynamics
High levels of technological spillovers and innovation due to proximity, access to suppliers gives higher levels of
flexibility to innovate quicker and high levels of competition and peer pressure pushes everyone to improve
• Trust and social capital (relationships)
Deals are sealed by a handshake and collaboration are mostly informal, but when trust breaks third parties do need
to be brought in to resolve differences
Social capital is like other forms of capital, it works as a production factor. Just like a piece of capital equipment has value
because it reduces friction, expense, or human labour, so do established norms, trust and relationships.
• = value created by relationships, trust and cooperation. It’s like a network of connections that helps individuals and
organizations work together more effectively.
,In Silicon Valley, trust plays a crucial role in fostering collaboration, innovation, and the overall success of the ecosystem.
• Facilitates Collaboration
• Promotes Risk-Taking
Enhances Networking
• Encourages Investment – investors tend to invest a lot in startups found in regional clusters
• Fosters Reputation
Downside to too much trust?
• Someone can create a product that doesn’t work and will still be able to sell due to the trust people have in them
Why do you think some clusters become globally dominant (like Silicon Valley) while others stop existing?
• Technological advancements
• Lack of companies acknowledging/admitting that their clusters are not keeping up compared to others and they
would gain from switching to other clusters
• It is important to identify a change of trends
Creative destruction: a case in which companies need to destroy their own product to continue existing and not fail
, WPO 3 Supply Value and Value Chain
Typical exam question: what do the supply and value chain of *insert company name * look like?
What is a supply chain?
• = Network of companies and people that are involved in the production and delivery of a product or service.
• = It covers several activities, starting with the transformation of raw materials into finished products and ending
with their distribution. Every step adds value to the product.
• Components of a supply chain: producers, vendors, warehouses, transportation companies, distribution centres, and
retailers.
• Functions of a supply chain: product development, marketing, operations, distribution, finance, and customer
service
Why is supply chain management important? What are elements you have to consider?
• Sustainability (e.g.: SDGs)
• Efficiency (e.g.: breakdown time)
• Location -> global or local
• Cost efficiency
• Inventory & warehouse management
What is the bullwhip effect?
• = A phenomenon in supply chain management where small fluctuations in consumer demand cause progressively
larger fluctuations in demand at the wholesale, distributor, manufacturer, and raw material supplier levels.
What is a Value chain?
• The process or activities by which a company adds value to an article, including production, marketing, and the
provision of after sale services.
• Supply chain is focused more on external factors and the value chain is focused more on internal factors
Porter's Value Chain. It helps organizations analyse specific activities through which they can create value and gain a
competitive advantage.
Primary activities (directly related to production and delivery): the core business functions that create and deliver a product or
service
Support activities (indirectly support primary activities): enhance the efficiency and effectiveness of primary activities
Margin: the difference between the total value created and the cost of performing the value chain activities. Profit is
generated when the value exceeds the costs.
