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Competitive advantage is not created within a single firm alone Efficiency in internal operations is essential but not necessarily sufficient to compete globally Factors external to the business are increasingly important Each firm is inherently part of a cluster of activities made up of firms along the value chain as well as related and supporting organizations eg research and development finance worker skills infrastructure In general clusters are geographic concentrations of interconnected companies specialized suppliers service providers firms in related industries and associated institutions in particular fields that compete but also cooperate A cluster may include industries that share similar workforce input or infrastructure needs In addition a cluster may have more to do with the output of the cluster industries Clusters may also be defined by complementary or interdependent industries one may produce what another needs It has been demonstrated throughout the world that strong clusters ensure sustainable competitive advantage and that this strength has managed to help countries improve drastically on their global competitiveness One region that is currently developing a very attractive multimedia cluster is San Francisco California The cluster is constantly evolving as telecommunications and computer technologies combine in a rapid fashion Defined broadly the multimedia cluster is the creators producers and distributors of software and hardware that integrate video sound text and graphics This integration is all done in a digital medium to produce a multimedia product or service Currently there is an estimated 2000 multimedia or multimedia-related industry firms concentrated in the San Francisco area The major components of the multimedia industrys potential cluster in San Francisco are categorized as follows Supplier Sector Technology providers - These are the producers of the enabling technology and include firms in computer hardware and software consumer electronics and digital communications Examples include Apple Creative Labs Multimedia developers - These are the integrators and developers of the media itself and include artists writers programmers animators interface designers and others
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