The underlying purpose of this discussion is to provide the reader with a more informed understanding of how convincing is Porter's model of national competitive advantage in explaining the workings and achievements of a major nation…
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This research will begin with the statement that international competitiveness of different countries is a great concern on governments and organizations. Countries do their best in order to ensure that they remain competitive in the international market. The interest on the competitiveness of countries has led to debates on the understanding and the true meaning of the international competitiveness of different countries. The purpose for the debates is due to the assumptions that underlie the theories of management that the competitiveness of firms may be transferred to countries. This was popularized by porter according to his diamond framework. Corporate strategies should be looked at from a global context. In spite of any given organization not having any plans of exporting or importing any goods directly. The management team of the organization is supposed to consider the international environments. This is because the action that the different organizations make on such issues as the competitors, sellers, buyers, substitute providers and the persons joining the market usually have a great influence on the domestic market. Michael Porter came up with a model that may be used to analyze the reasons as to why some nations may be more competitive compared to others and some given industries may be more competitive within a nation compared to others. This model may be used as a factor of determining national advantage and it is mostly referred to as the Porter’s diamond. The model suggests that an organizations national home base plays a great role in defining the extent that the organization is likely to be successful in the global scale as well as having a competitive advantage. The home base is able to provide some basic factors that may act as support for success and may at time hinder some organizations in building advantage grounds in a global competition. This model distinguishes four different determinants. The first determinant is the factor condition. This is the situation in a given country based on the factors of production such as infrastructure and skilled labor which may be relevant to make the country competitive in some industries. These factors may be placed in groups that include human resources, material resources, knowledge resource, infrastructure and capital resources. These factors also include research quality done by universities, liquidity of the national stock market or deregulation of the labor market. These factors may provide some advantage in the market and may act as a competitive advantage. The second condition is the home demand conditions. This condition describes the amount of home demand that the services and products produced in a given country are demanded within the country. The demand at home may influence the factor conditions. It helps shape the direction that the product development and innovation take. This model states that the demand within a country may shape the competitiveness of the country in the global market. The third condition is the supporting and related industry. When a country has one industry that is successful, it may reinforce internationalization and innovation in the industry at a later stage on the value system. Both the supplying industries and the related industries play a great role in a country’s competitiveness. These industries may coordinate some given activities together in the market, especially those that are related, which will in turn offer competitive advantages. The last condition is the structure, strategy and rivalry of the firm. In different nations, some factors such as management structures, interaction between companies and working morale may be shaped differently. This may provide some disadvantages and advantages for particular industries.
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The countries he mentioned as the global leaders in competitive advantage have been proven to be leading in exports across the entire global. These are the United States, Japan and Germany. These claims can be greatly supported by international business analysts.
Koen (2005) argues that Porter’s model brought in a generic value chain mould that comprises of a series of activities found to be similar to a wide variety of firms. Porter identified main and support activities. The core value chain activities are inbound movements, sales and marketing and services.
These baffling questions, unanswerable by his own knowledge and understanding at that time led him to create what would eventually be mythology. Wikipedia defines mythology as "stories that a particular culture believes to be true and that use the supernatural to interpret natural events and to explain the nature of the universe and humanity." To analyze this definition, we can deduce that mythology per se is man's way of explaining things otherwise he does not know in supernatural ways.
This paper will outline the relationship between globalization and global inequality and global poverty. In the process, it is expected that the forces that underpin globalization and the issues that concern the evolution of the global political system and the development of governance would be demonstrated.
onitor the international business environment, where the activity of other organizations largely influences the business operations of another (Schwab, 2009). With the rapid growth of technological advancement, every firm tries to secure its own competitive advantage in order to
The conclusion from this study states that Porters’ model of national competitive advantage provides a degree of variation of national business systems and a comparative economic performance across different nations and industries. The model, however, fails to consider the effects of vital variables such as culture and history in the explanation of economic success in a nation.
itor closely the international business environment, where the activity of other organizations largely influences the business operations of another (Schwab, 2009). With the rapid growth of technological advancement, every firm tries to secure its competitive advantage in order
This paper will explore the manner in which the diamond model, developed by Porter is able to explain the differences in the business systems of leading economies. This paper would also examine the comparative economic performance of the identifi9ed nations and the extent in which other approaches and ideas can be used for purposes of explaining them.
Porter invented the diamond model of the national competitive advantage with the objective of presenting an explanation for the competitiveness advantages currently taking place in various countries through
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