Case | HBS Case Collection | August 2006 (Revised March 2007)

Cluster Mobilization in Mitteldeutschland

by Jeffrey Fear and Christian H.M. Ketels

Abstract

As part of the privatization in Eastern Germany after the fall of the Berlin Wall, Dow Chemical made a major investment in the Halle-Leipzig region, one of the largest chemical industry sites in Europe. The executive in charge of Dow's operations in the region, Bart Groot, increasingly felt that the long-term success of Dow's investment depended on a more dynamic development of the entire regional economy. On his own initiative, in 1997, Groot launched a private sector-driven effort to enhance the economic development in central Germany, the region located around Halle-Leipzig. Bundling together 50 other firms and four cities, he founded a regional marketing effort to brand or market the area, but then shifted focus to building clusters. Examines the motivations of companies and company executives to get involved in regional competitiveness efforts and provides a platform to discuss the factors that drive the success of cluster-building efforts through cooperation across firms in a disadvantaged area.

Keywords: Industry Clusters; Development Economics; Privatization; Chemicals; Foreign Direct Investment; Management Teams; Private Sector; Competitive Strategy; Brands and Branding; Market Participation; Chemical Industry; Germany;

Citation:

Fear, Jeffrey, and Christian H.M. Ketels. "Cluster Mobilization in Mitteldeutschland." Harvard Business School Case 707-004, August 2006. (Revised March 2007.)