Porter considers the competitiveness as the result of engagement and interaction of four main factors. Michael porters diamond model also known as the theory of national competitive advantage of industries is a diamondshaped framework. Porter s diamond is an economic model that is developed by michael porter that aims to highlight and explain on why particular industries or nations become quite competitive in a particular location and on the national and international levels michael porter is one of the highly renowned and famous authorities on the corporate strategy and economic competition. The presentation of the theory of porter the theory of the competitive advantage starts from the principle that the only important concept at the national level is the national productivity fota constantin, 2004. Applying porters diamond model at the firm level diva. Porters diamond model concept and examples marketing91.
The model is often used by businesses to analyze the external competitive environment. Investigating the role of porter diamond determinants for. The important thing is to try and shape the nature of competition to take control over your own destiny. A well designed questionnaire is used to collect data about the various determinants of the model. Michael porter s diamond model also known as the theory of national competitive advantage of industries is a diamond shaped framework that focuses on explaining why certain industries within a particular nation are competitive internationally, whereas others might not. This article also contains a downloadable and editable porter s diamond model template.
In other words, goods and services are allowed to cross borders without any restrictions. The diamond is a model for identifying multiple dimensions of microeconomic competitiveness in nations, states, or other locations, and understanding how they interact. In the diamond model see figure 1, porter presents the environmental antecedents of national competitive advantage, namely, factor conditions, demand. Pdf porters diamond approaches and the competitiveness web. Chapter 7 internatioanl business linkedin slideshare. Michael porter offered a model that allows examining why some states are more competitive and why some industries within states are more competitive than others are. Pdf new approach to strategy at the diamond model based. This article explains porter s diamond model, developed by strategy guru michael porter in a practical way, including an example. The competitiveness of ghanas industry university of st. The framework used in this thesis is based on michael porters diamond of. In this way, porter s diamond model of national competitiveness was detected. And why is it that certain companies in certain countries are capable of consistent innovation, whereas others might not.
Provide the competitive advantage depends on the renewal of the system and what takes place very rapidly in innovation. The determining factors of diamond model porter, 1990. Every business operates within a playing fieldthe environment where it is born and where it learns to compete. After reading you will understand the basics of this powerful strategy and competitive advantage analysis tool. Porters model of competitive advantage of nations named as diamond model has been widely used and criticized as well, over recent two decades. Economies of scale and first mover advantages are central to which theory of trade.
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