The Successful Formula of Cooperation

Cooperation is not at all outdated and it has its new relevance today. The theory of cooperative production dates back to the middle of the 19th century, but its popularization was largely due to the works of Michael Porter. According to him, a cluster is a

geographic concentration

of related companies, specialized suppliers, companies of the supporting industries, but also associated institutions and academia in a certain field. This business is competing to some extent but it is also cooperating.

In Bulgaria, a cluster is no longer an unfamiliar word for the entrepreneurial circles. In many places around the world, but also in our country, such unions have appeared naturally under the influence of tradition or market forces. In recent years, however, many clusters have been formed only because of the funding, provided by the European Union. Thus, in 2015, the number of clusters registered in Bulgaria exceeded 260. Since then, new clusters have also emerged, but many of those structures have ceased their activities, and currently, the clusters categorized by the Executive Agency for Promotion of Small and Medium-Sized Enterprises are 79. The

parasitic practice

“If there is project funding – there is an organization, if there is no funding – there is no cluster”, has also made its way through. That is why the Association of Business Clusters (ABC) is trying to establish working standards that exclude the creation of mergers solely for the purpose of “absorbing” European funds.

In Bulgaria, there are enough good examples, as well as groups of companies with synergy between one another. Each one of these organizations has developed its own practices and models of work. The Bulgarian furniture cluster and the Ligna Group trading company (ligna – Lat. “Tree”) have connectivity and interaction, measured by good market results. There are companies in the cluster that are involved in the execution of the orders that Ligna Group provides in healthy competition.

“Bulgaria is a small market and united we do stay strong.” And for 10 years now, the association of companies of the furniture industry has been manufacturing and supplying hotel furniture throughout Europe. When more than 40 companies with different specialization are holding hands, they jointly execute orders in foreign markets. Otherwise, for such large volumes, no one would trust a small Bulgarian company,” explains Genoveva Hristova, Chairperson of the Bulgarian Furniture Cluster. Forms of cooperation are already being created in the most successful sectors in Bulgaria and the internal competition between companies is being overcome by

cluster management

which is taking the shape of a new profession. The person in this position must be able to set the rules of fair competition between players. The One for All, All for One rule applies, but quality and timing dictate the selection of the best. This is how the business grows and achieves higher results. “We can manufacture products of excellent quality and it is important for me to motivate everyone we work with to look in one direction, even though they are competitors,” Genoveva Hristova says. She has already gained considerable experience and is ready to share it with anyone who is looking for a successful formula of cooperation.