2010 MBL3 Research Report

Topics: Strategic management, Michael Porter, Economic geography Pages: 142 (26986 words) Published: June 20, 2014
Success Factors in Micro and Small Enterprises Cluster Development: Case of Gullele Handloom Clusters in Ethiopia

A Research Report
Presented to the

Graduate School of Business Leadership
University of South Africa

In partial fulfillment of the

Requirements for the


Student No. 71769064

Study Leader
Professor Philip AE Serumaga-Zake

Addis Ababa, Ethiopia
December 20, 2010 


Taking the Gullele handlooms cluster development intervention program in Ethiopia as a case study, this paper tries to identify the critical success factors attributable to micro and small enterprises cluster development initiatives. To this end, document analysis, semi-structured interview, and focus group discussion methods are widely employed. It is found in the study that the development of strong trust within the cluster community, stability of key actors of cluster development, the existence of functional networks, adequate physical infrastructures, availability of raw materials, access to finance, the level of production technology and market promotion are essential factors in bringing success to cluster development. The study has also found out that in order to realize the contributions of these success factors within a specific cluster development program, macro level policy improvements, fostering valuable networks and relationships, and upgrading level of cluster concepts among various actors are of critical importance. Finally, to sustain the benefits of cluster development efforts, cluster development agents should facilitate the macro and micro environment of the cluster keeping their interventions intact.



This MBL thesis would not have been possible without the guidance and help of several individuals who in one way or another contributed and extended their valuable assistance to its preparation and completion.

I would, above all, like to express my utmost gratitude to H.E. Mr. Newai Gebre-ab, Executive Director of the Ethiopian Development Research Institute (EDRI), for his support and encouragement to make this study a reality.

I would also like to express my deep and sincere gratitude to my research project supervisor, Professor Philip AE Serumaga-Zake, for his immense role in providing me with constructive comments, and relentless support and understanding for the effective realization of the study.

I owe my most sincere gratitude to Ibrahim Miftah, UNIDO CDA, who was my key resource person through availing the necessary documents, articles and giving comments during this thesis preparation.
I also appreciate the cooperation my MBL group members who inspired me, shared their invaluable insights and steadily helped to be successful at the end the end of the day.
I would like to warmly thank all the participants in the research project who allocated their valuable time and effort in providing me with relevant information. Their kind support has been of great value in this study, indeed.

The financial support of ACBF is gratefully acknowledged. In this respect, I wish to extend my warmest thanks to Ms. Nyawira Miano at ACBF who facilitated the provision of the financial support.
Last but not least, I would like to extend my thanks to my father (Ketselamaryam Hailu), my brothers and lovely sisters for their kind concern and encouragement.




I, Hanna Ketselamaryam Hailu, declare that this thesis report is my own work, except as indicated in the acknowledgement, the text and references. And all the sources and references have been dully acknowledged. It is being submitted in partial fulfillment of the requirements for the degree of Master of Business Leadership at the Graduate School of Business, University of South Africa. It has not been submitted before, in whole or part, for any degree or examination at any University.

Hanna Ketselamaryam Hailu:

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