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Owens Corning

In: Business and Management

Submitted By scurrie1
Words 597
Pages 3
From the reading I found that there are a few different kinds of clusters, identifying the one that is in line with Owens Corning company is a little more difficult than expected. Also, I’m not quite sure if I completely understand the nature of the correct cluster where discussing. The Owens corning company has a strong domestic cluster along with a growing global cluster. In the United States the domestic cluster is spread out throughout the United States and Canada. The have several divisions that are closely entwined with each other where one plant manufactures the materials and resources that is shipped to another factory for either assembly or further rendering and assemblies. There are further clusters that can or cannot be the right distinction for the Owens Corning Company. The geographical cluster to which you have particular interests in the resources, supply chains and transportation of goods and materials; playing a distinct role of how well a corporation will survive in that region. Michael Porter talked about the enduring competitive advantages in global economies that lie increasingly in the local things- knowledge, relationships that distant rivals cannot match. He discusses, when a company can source a materials from a distance through global markets and corporate networks available to any company, therefore essentially nullifies the source as a competitive advantage. Having more open global markets, faster communication and transportation should diminish the role of location as an advantage. (Porter, 1998) Owens Corning’s competition in the domestic and global environments is the Certain-Teed Company. Owens Corning has a small share in the European market which is slowly gaining more market share since 2003. They have place several manufacturing facilities close or in the region of their biggest competitor certain-teed. Certain-Teed has been in the European markets for more than a decade. They have a stronger presence than that of the Owens Corning people. Certain Teed joined forces with the company Saint-Gobain which has been in business since 1665. For the Certain-Teed company joining forces with Saint-Gobain a company that is a leader in the European markets. When the two companies cluster their effort it was a win win for both teams. Saint-Gobians has the reputation and the product branding in that particular region which is safe to say an easy insert into unknown European markets with very little ease. As for Saint-Gobain, when they clustered with Certain-Teed they were able to gain market share in the United States and Canada. This was one of the factors that hindered Owens-Corning entering into the European markets so late, they have had to learn the about the global environment the hard way; “just going for it”. This process is the more expensive way to go about entering new global environments. If the Owens corning people get it wrong it could cost them large shares of market traction and find that the whole venture winds up a bust. One of the advantages that Owens Corning would have over the competition is the location of manufacturing. Having a transportation route, local supply chain of resources and the availability to inexpensive labor. This location is directly situated on how companies use these location insights to continually create that competitive advantage. (Porter, 1998)

References:

Global Agricultural Marketing Management. (1997, January 1). Retrieved October 11, 2014, from http://www.fao.org/docrep/W5973E/w5973e00.htm#Contents
Porter, M. (1998). Clusters and the new economics of competition. Harvard Business Review, 76(6), 77-77. Retrieved October 10, 2014, from Home.furb.br/wilhelm/COMPETIV/Porter_Cluster2.do.

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