Analysis of Vukovar-Sirmium County wood industry cluster: the gap between theory and practice

New business trends and the challenges of global market have put pressure on some locations to become more attractive to business, as well as on business entities to become more competitive globally. Cluster, as a special form of organised and interconnected companies and a competitive business model, represents a group of companies that complement each other to enhance their development and performance in the market based on their geographical concentration. The competitiveness of a region does no longer depend solely on individual companies, but more and more on innovative practices of entire industries and sectors. This paper aims to illustrate cluster strengths and weaknesses, their potential benefits and positive effects using a practical example of a cluster created in Vukovar-Sirmium County. Although association and networking of companies should create competitive advantage, boost productivity and innovation, and stimulate growth both at the level of businesses and at the County level, research using methods such as description and compilation has indicated that in practice there is a large gap between the expected and the reality. More attention should be paid to cluster policies at the County and regional levels so that clusters could make headway during their life cycle and stabilize their own business environment. This form of cooperation between business entities is a good example showing how to maintain stability within a certain area by connecting and cooperating with each other. Learning from the experience of foreign countries, studying best practices and connecting with education institutions, are some of the guidelines for creating a competitive and successful cluster. The potential benefits from creating a cluster provide additional motivation to all the actors to support and promote this form of cooperation.