A Study on the Competitive Factors of Bicycle Industrial Cluster in Da-Chia Area

The bicycle industry in Taiwan has begun to expand its exports from 1980's and it had made Taiwan as "the Kingdom of bicycle manufacturing." Along with the changes of economic situation, however, the bicycle industry has gradually moved from manufacturing-orientation to both ends of the Smile Curve--the global strategy and innovation development. From wrestling in the domestic market to compete in the global market, especially the competition of lower production cost in China, the existence of bicycle industrial cluster in Da-Chia implies that the Taiwanese bicycle industry still enjoys certain competitive advantage worth of investigation.

This research examines the development process of Taiwanese bicycle industry firstly, then try to analyse how it can break the limitation of the traditional industry, increasing its competitive advantages through strategies, cooperation, competition to become an industry with national competitive advantages. The study area is targeted at the middle area of Da-Chia, because the factory numbers, production value, the components chain of the middle area outnumbers the north and south area. From the spatial distribution of factories, we use the statistical analysis of spatial distribution data, questionnaire, qualitative research, and together with the Diamond Theory proposed by Porter (1990) to answer the following questions:

1.What is the spatial distribution of bicycle industry cluster in Da-Chia area? We analyze the relation between stream-up and stream-down of bicycle industry, and explore the characteristic of bicycle industry development by the structure of the vertical integration and supply chain of the industry. In order to understand the phenomenon of the bicycle industrial cluster, we introduce the concept of geographical space to analyze the relation between the sub-industry and space agglomeration.
2.Why did the cluster emerge in Da-Chia area? How government urged the competitive advantage emerging in the developmental process, and how enterprises made use of the cluster advantage to create a productive and innovative environment.

This research has confimed that bicycle industry has significantly clustered in Da-Chia area with certain competitive advantage. In terms of production value, the degree of cooperation, and the ability of R&D, the cluster around Youth Industrial Park surpasses any other clusters in the area and has the most obvious cluster effect, which quotes Porter’s cluster advantage theory and Krugman’s information spillover effect. Currently, the bicycle industry in Da-Chia area has encountered challenges including: limited assistances for bicycle industry by local government, insignificant devotion in middle area schools to accomplish science & technology projects and to foster enterprises innovation, and the structural faults of human resource inputs. It is suggested that the social interaction among firms and technology labors in the Da-Chia industrial cluster should be further studied in the future.