Competitive advantage is not created within a single company. Efficiency in internal operations is essential but not necessarily sufficient to compete globally. Factors external to the company are increasingly important. Each business is inherently part of a business “cluster” comprised of businesses across the value chain as well as related and supporting organizations, e.g. research and development, finance, skills of workers, infrastructure. In general, clusters are geographic concentrations of interconnected businesses, specialized suppliers, service providers, businesses in related sectors, and associated institutions in particular areas that compete but also cooperate. A cluster may include industries that share similar labor, input or infrastructure needs. Additionally, a cluster may have more to do with the production of the “cluster” industries. Clusters can also be defined by complementary or interdependent industries: one can produce what the other needs. Strong clusters have been shown around the world to ensure sustainable competitive advantage and that this strength has been successful in helping countries significantly improve their global competitiveness. One region currently developing a very attractive multimedia cluster is San Francisco, California. The cluster is constantly evolving as telecommunications and computer technologies rapidly combine. Defined broadly, the multimedia cluster brings together creators, producers and distributors of software and hardware integrating video, sound, text and graphics. This integration is done on a digital medium to produce a multimedia product or service. Currently, it is estimated that approximately 2,000 multimedia or multimedia-related companies are concentrated in the San Francisco area. The main components of the potential multimedia industry cluster in San Francisco are classified as follows: Supplier sector Technology suppliers - These are the producers of enabling technologies and include companies in the field of computer hardware and software, electronics general public and digital communications. Examples: Apple, Creative Labs Media Developers – These are the integrators and developers of the “media” itself and include artists, writers, programmers, animators, interface designers and others. Examples: Broderbund, Crystal DynamicsContent Providers: These are providers of information presented via multimedia and include film, television and video entertainment companies, print media publishers, news organizations and media providers. information systems services. Examples include: LucasArts Entertainment, HBOCommunity Infrastructure. These are the shared resources that contribute to and benefit from the multimedia potential cluster. This infrastructure is made up of research laboratories, universities, training organizations, investors, associations, accountants and other professional service providers who contribute to the development of the product or engage in its use..