University of Twente Student Theses


Industry survival: The case of the Twente textile industry

Zee, Debbie van der (2011) Industry survival: The case of the Twente textile industry.

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Abstract:Products and industries go through life cycles. They both pass four phases: introduction, growth, maturity and decline. With every phase in the life cycle, other opportunities and threats occur. Every phase is different and will shape the industry in a different way. Mostly, companies within an industry tend to copy each other’s successful behaviour, which makes them more alike as the industry matures. The process of organisations becoming more and more similar is called isomorphism. Isomorphism mostly results in an oligopoly. To survive an industry, organisations must take four key themes into account: customers, innovation, corporate identity and finance. Within these four themes, this research identifies eight key factors for enduring success: Customers - Products/services need to be of good quality - Consider external environment Innovation - Balance incremental and radical innovation; know when what type is needed. - Diversification - Balance exploration and exploitation; know when it is the right time Corporate identity - Envisioned future needs to exist (BHAG and vivid description of desired future state) - Core ideology needs to be present (core values and core purpose) Finance - Conservative about finance To test this model for enduring success and also the possibility of the presence of an innovative cluster three companies were included in the research. Three contrasting cases, based on decision to outsource production and the point of entry on the industry life cycle, were used. These factors were identified at the three case companies. Some factors were more obviously present than others. Also the presence of an innovative cluster in Twente was tested. A cluster is a strong collection of geographic concentrations of interconnected organisations in a particular field or a particular industry that compete but also cooperate. Four groups need to be present in order to claim the title of a cluster: direct competitors, important customers, suppliers and supporting organizations. These groups are present in Twente, however, since there is no sign of cooperation between the companies, there is no innovative cluster present. Within an innovative cluster organisations work together inside the bounds of a cluster, to produce innovations. However, in Twente there is a phenomenon that is called the Twente cooperation paradox: organisations do not cooperate unless it is absolutely necessary. This can also be observed in the history of the Twente textile industry. History of the industry and recent knowledge and events were combined in this research to explain why only some organisations survived the Twente textile industry. Resulting in the key factors for enduring success, which are present in all three case companies and might be applicable in other industries in other regions.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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