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Clustering Stock Market Companies - Essay Example
The concept of clustering or cluster refers to matters having identical properties and thus having a marked propensity to remain in not too distant with each other. In other words, a cluster could be said to be a group of identical matters having common characteristics.
It is often seen that business houses in clusters are more successful than those businesses doing identical trade or commercial ventures but are separated from each other, either through geographical distances or other barriers which do not offer their clustering. Not only are clusters more successful in terms of profitability and growth indicators but they are also well-positioned in terms of good management structures and high share value with respect to the companies who are not clustered.
It is often found that in many countries the situation of certain similar industries is in close geographical proximity to each other. For instance, computer firms are found in the US in Silicon Valley and Bangalore in India, and they are proliferating exponentially in the recent times. This geographical proximity also gives rise to clustering and has a positive impact on the company's growth since all the members of the cluster would be able to contribute to the economic welfare of the State to which it belongs. The concept of clustering is fundamentally to determine the essential grouping or collation of data, and in the contest of business enterprises could be used to consider important aspects like revenue generation, profit making corporation and the main location aspects of the business. ...