The machinery industry has always been entitled ?Mother of Industry?, therefore the machine tool is also called ?working mother machine?. Due to the evolution of time and the export-oriented economic policy, the machine tool factories gradually gathered around central Taiwan area. This clustering phenomenon has developed into an intensive network of division of labor. In the meantime, a ?Corporate Synergy System? has been established as the development base for the machine tool industry in central Taiwan in order to lower down business costs effectively through its labor division system. However, as many famous factories did not survive through crisis and finally exit from the leading group or even closed down the business, it obviously proved that this advantage could not actually guarantee the continuous competitiveness of all enterprises. This report aims to study the strength of competitiveness within an industry from the aspects of existing rivalry, new competitors, suppliers? power, buyers? influence, switching to competitor, etc. by using Porter?s ?Five Forces Analysis?; and further realize the internal strength and weakness and external opportunity and threat of the machine tool industry and some case companies by using SWOT Analysis. The clustered machine tool industry in central Taiwan has resulted in a complete cooperative network of upstream and downstream manufacturers supply chains to lower down costs and upgrade competitive capabilities through expert labor division. My case study discovered that the company, using the three elements of ?division network?, ?research capabilities? and ?entrepreneur spirit?, taking the advantage of technical capabilities formed by division network, and implementing production and marketing strategies; has always been able to maintain its continuous competitive capabilities.