Exploring clusters and their value as types of business networks in the agricultural sector Matopoulos, A., Vlachopoulou, M. and Manthou, V. Department of Applied Informatics, University of Macedonia 156 Egnatia st. 540 06 Thessaloniki, Greece tel. +30 2310 891820 / fax +30 2310 891804 e-mail: arismat@uom.gr, mavla@uom.gr, manthou@uom.gr Abstract The undisputed link of the agricultural sector with regional economies, along with the increased competition, fosters agri-business companies to rethink their business philosophy and to transform from isolated firms to members of more extended business formations. The paper examines a particular type of business network, the cluster. It focuses on the concept of clusters and on cluster-based strategies in the context of agriculture. In particular, the paper explores the value of clusters by taking into consideration the particularities of the agricultural sector. Potential benefits and constraints of agri-business cluster development are also presented. Keywords: agri-business clusters, driving factors, small-medium enterprises 1. Introduction In most of the business sectors all over the world new forms of cooperation among companies, have been developed in response to the increased international competition. The ability of enterprises to compete has been directly linked with their ability to collaborate with other enterprises. O’Keefe (1998) suggests that enterprises nowadays have to be first and foremost a good collaborator in order to become an efficient competitor. However, collaboration should not be restricted among companies. Often, collaborative action between firms and supporting local private and public institutions is needed in order to meet the challenges of increasing competition in both domestic and international markets. In the agri-food sector, collaboration issues are increasingly becoming more important, as nowadays it is the system of growers-packers-exporters of a country that competes against the business system of another country, and not business entities independently (Nitchke and O’Keefe, 1997). Within this changing environment agri- business companies, which are mainly SME’s, find themselves often unable to adapt, to be flexible and to respond to the challenges, loosing their competing ability, due to