Introduction
Professor Michael Porter's work on Competitive Advantage of Nations is greatly influential yet tendentious (Davies and Ellis, 2000) which evoked considerable interest and eager debates that was met with contrasting views. This essay will discuss the concept of Porter’s Diamond alongside his theory and framework, accompanied by the academic criticism this model has attracted to find out why so much emphasis was placed on the diamond framework.
Porter's Competitive Advantage of Nations
Porter’s "national diamond" which identifies a set of six factors—factor conditions; demand conditions; related and supporting industries; and firm strategy, structure and rivalry; chance and government; and cluster (Davies and Ellis, 2000)—is a framework …show more content…
skilled labour or infrastructure), required to engage in a particular industry (Godfrey, 2015). These conditions can furthermore be split into two groups—basic factors (e.g. climate, natural resources and location); and advanced factors (e.g. graduate engineers and, information and communications infrastructure). Advanced factors are the outcome of a concentrated effort instead of inherited by nations, and they are the most irreplaceable production factors in today’s knowledge economy (Porter, 1990).
Demand Conditions
According to Porter (1990), home demand is decided by three key characteristics—their mixture (mix of customers’ needs and wants); their scope and growth rate; and the tools that convey domestic preferences to foreign markets. The pace and character of development and transformation by a nation’s firms can be created by demand conditions inside a nation. It is the character of the home demand rather than the size that makes a difference. Home demand conditions impact the moulding of particular factor conditions and are the solution to global prosperity.
Related and Supporting …show more content…
The capabilities of MNEs could be affected by the positioning of diamonds of the foreign nations in which they manufacture, which could ultimately impact the capabilities of the home countries and competitiveness of the resources (Dunning, 1993). According to Dunning, the domestic influences on the diamond should be deemed as only an exceptional case of the global influences which is the other way around from Porter’s, as he is left with the perception that Porter regards the global influences on the diamond as an ‘add-on’ to the domestic
Professor Michael Porter's work on Competitive Advantage of Nations is greatly influential yet tendentious (Davies and Ellis, 2000) which evoked considerable interest and eager debates that was met with contrasting views. This essay will discuss the concept of Porter’s Diamond alongside his theory and framework, accompanied by the academic criticism this model has attracted to find out why so much emphasis was placed on the diamond framework.
Porter's Competitive Advantage of Nations
Porter’s "national diamond" which identifies a set of six factors—factor conditions; demand conditions; related and supporting industries; and firm strategy, structure and rivalry; chance and government; and cluster (Davies and Ellis, 2000)—is a framework …show more content…
skilled labour or infrastructure), required to engage in a particular industry (Godfrey, 2015). These conditions can furthermore be split into two groups—basic factors (e.g. climate, natural resources and location); and advanced factors (e.g. graduate engineers and, information and communications infrastructure). Advanced factors are the outcome of a concentrated effort instead of inherited by nations, and they are the most irreplaceable production factors in today’s knowledge economy (Porter, 1990).
Demand Conditions
According to Porter (1990), home demand is decided by three key characteristics—their mixture (mix of customers’ needs and wants); their scope and growth rate; and the tools that convey domestic preferences to foreign markets. The pace and character of development and transformation by a nation’s firms can be created by demand conditions inside a nation. It is the character of the home demand rather than the size that makes a difference. Home demand conditions impact the moulding of particular factor conditions and are the solution to global prosperity.
Related and Supporting …show more content…
The capabilities of MNEs could be affected by the positioning of diamonds of the foreign nations in which they manufacture, which could ultimately impact the capabilities of the home countries and competitiveness of the resources (Dunning, 1993). According to Dunning, the domestic influences on the diamond should be deemed as only an exceptional case of the global influences which is the other way around from Porter’s, as he is left with the perception that Porter regards the global influences on the diamond as an ‘add-on’ to the domestic