Summary Of Porter's Diamond

America has been leading the world in the cotton industry for over 200 years (Rivoli 7). This is surprising for many reasons. America is competing with the world’s poorest, least developed countries. These countries have some of the lowest labor costs in the world whereas America’s labor costs are among the world’s highest (Rivoli 5). Another surprising factor is that cotton itself seems like a doubtful contestant for economic success. Despite these factors, America has continued to remain the most successful in the cotton industry. In the book, The Travels of a T-Shirt in Global Economy, Pietra Rivoli explores America’s success in the cotton industry. Rivoli touches on all of the elements of Porter’s Diamond and how they contribute to America’s long term success in the cotton industry. Porter’s Diamond illustrates the components that help a nation succeed in a particular industry for so long. The components of Porter’s Diamond are factor endowments, demand conditions, supporting industries, and firm strategy. These elements include the support of the government through subsidies, the American …show more content…
American cotton producers “…have adapted their production methods, their marketing, their technology, and their organizational forms to respond to shifts in supply and demand in the global marketplace” (Rivoli 7). American farmers have created new techniques to adapt to all of the changes in order to continue selling cotton. Countries that compete with the U.S are not as innovative so they are unable to keep up with this market. Lack of innovation and inability to adapt to the changing market makes these undeveloped countries fall further behind America in the race to the top of the cotton industry. Poorer countries may be successful one year and struggle the next, but the American farmers’ ability to keep up with change will lead to their continual dominance of the cotton