Demand conditions consist of home demand conditions, demand size and pattern of growth and internationalization of domestic demand. Demand conditions are a significant factor for gaining competitive advantage because it’s based on a buyer demand for the product or service, and quality and price demands. Porter explains how national competitive advantage can be achieved if “home demand provides clearer and earlier signals of demand trends to domestic suppliers than to foreign competitors,” (Kondalkar,2013) and meeting the demand of the domestic market can lead to an international demand because of the market need of high quality. The demand conditions affect the forming of certain factor conditions, which is why it has the largest correlation with related and supplier industries determinant (Bakan & Dogan,2012.) These two determinates form a relation because it promotes a continuous exchange of ideas and innovation, allowing to reply to market trends and changes, in order to meet the buyer demand and requirements. Working relations among the domestic buyers and suppliers allows access to cost effective inputs, and low costs, which becomes a true source of competitive …show more content…
“Factor conditions of the firms are easily imitable by observing and imitating rival firms” (Bakan & Doğan,2012.) However, a product or service that obtains specialized factors, which cannot be duplicated can sustain competitive advantage. Factor conditions develop and change, through political incentives and technological progression. The reason factor conditions had the least effect on the competitiveness of an industry is because of how the other determinants are able to shape its function. Factor conditions such as highly-skilled people or processes of production that are the result of continuous industry investment, is relative to demand conditions because without a customer demand, a worker’ abilities become irrelevant. Porter’s Diamond is an interrelated system, used as a guide for developing national competitiveness from the interaction of the four