Case Study Of Porter's Diamond

Michael Porter also invented competitive forces model. This model allows us to understand why, for example, the airlines industry is the least profitable one. It has an easy market entry, so there are a lot of different companies, and customer has to choose one, but it is difficult for him to differentiate between different companies, so the customers just chooses what is the most convenient for him at the current moment of time. There is an intense competition because of

The term competitiveness defines the ability of a region to export more than its imports while including all “terms of trade” to reflect government legislation and import barriers. In other words, according to the world competitiveness report, competitiveness is “… the ability to design, produce, and market goods and services, the price and non- price characteristics of which form a more attractive package than those of competitors.” (Pg3.) Each nation has different competitiveness level, which relies on multitude factors such as; raw materials, innovative technologies, energy prices, the type of economy, legislations, and the exchange rate fluctuations. Nevertheless, the prosperity of countries depends on the nation’s competitiveness status.

Although as wanted by our teachers, this essay will be focused on the evergreen five forces framework for industry analysis set up by Mr. Michael Porter to ascertain the desirability of an industry along with its usefulness and limitations in the formulation of various strategies but first and foremost I’d like to throw some light on this very enlightened being, Mr. Porter, whose name is taken at least twice every lecture we attend (Not forgetting that the first two were totally on him only!). Why all his theories ranging from ‘Competitive Advantage’ to the ‘Diamond Model’ (Management.net, 2014), ‘Value Chain’ (Business.com, 2011) and ‘Generic Strategies’ (Mindtools.com, 2014) amongst many more are regarded no less than holy texts in the field of management, especially strategic planning? Is it because he is considered management’s living doyen or because he is a highly revered professor at the very prestigious Harvard Business School (The Economist, 2008)? No, it is because the works of Michael Eugene Porter have time and again held fort in testing times and have benefitted governments, establishments, scholastic circles and nations on the whole globally!

Michael Porter is a renowned economist and professor of Business Administration at the Harvard Business School, author of 18 books and more than 125 articles with topics that range from industry competition to economic development. Porter was born in Michigan and went on to study aerospace and mechanical engineering in Princeton from where he graduated first in his class and with high honors from both the prestigious societies Phi Beta Kappa and Tau Beta Pi, which he was also elected into. He is known as the “c” and is recognized worldwide for his take on competition and company strategy, many say that his work has redefined the thought process related to competition and economic development. Some of his most influential books include Competitive Strategy: Techniques for Analyzing Industries and Competitors, Competitive Advantage: Creating and Sustaining Superior Performance and Redefining Health Care: Creating Value-Based Competition On Results.

Porter argues that if a firm is to attain competitive advantage; it must choose between the types of competitive advantage it seeks, discuss using an industrial example?

2. Does Porter fail to explain how the factor and demand conditions that mould a nation’s corporate strategies, business structures, and industrial clusters are established? What other theories and evidence might assist such an explanation?

“Porter’s five forces”: Introduction. “Porter’s five forces” is widely applied in today’s business world. Harvard Professor Michael E. Porter’s first HBR article “How competitive forces shape strategy” was published in 1979. It became revolutionary in the field of strategy. Porter’s subsequent work has brought big changes to the study of competitive strategy for corporations, regions, and nations. With assistance from his colleagues from Harvard Business School, Porter continues to update and extend his classic work, providing practical guidance for

Porter did not only come up with these competitive forces but also came up with competitive strategies to counter the competitive forces. It is how these competitive strategies have been used in combination with IT which will show whether a strategic advantage was achieved or it merely led to a strategic necessity.

According to Ormanidhi & Stringa (2008), how firms compete and what strategies they choose are imperative questions for companies in every sector of the business world. Their writings state that improved understanding of a firm’s competitiveness would serve as input to improve policies concerning competition and related issues; and improved policies, will provide valuable support to efforts to continuously develop markets and businesses. Within, the author’s place significant emphasis on the concept of competition with echoes from Porter’s five forces model (see Appendix 6). The model illustrates the five forces, which hinge on the determinants of the industry’s overall competitiveness and profitability, which are: threat of new entry, intensity of rivalry among existing firms, pressure from substitute products, bargaining power of buyers, and bargaining power of suppliers.

In the article “The Competitive Advantage of Nations” Michael Porter describes a diamond shaped relationship of forces that define a country’s potential for being competitive in a specified industry. The four points on the diamond representing the different forces are: factor conditions; demand conditions; firm strategy, structure and rivalry; and related and supporting industries. According to Porter, the four points apply pressure to each other resulting in a national

On the other hand, the criticisms of Porter’s theory vary widely. Lazonick (1993) downplayed the importance of rivalry and argued that companies facing immense pressure from competitors may decide to adapt through imitation instead of innovation. For example, in order to prevent waning competitive advantages due to challenges from overseas competitors, US companies chose to cooperate rather than compete with each other. Additionally, Chang

It is undeniable that strategies of today’s organization lead to manage for Globalization because the world is becoming global market. Concerning the relevance for Today’s Business, it is questionable: Are Porter’s Five Competitive forces still applicable? Dälken (2014) argued that the question to what extent digitalization, globalization and deregulation affect Porter’s Five Competitive Forces can be answered as follows: Since Porter’s Five Forces relies on the principals of microeconomics; the challenge of the credibility of the model is limited. The mentioned three forces make network unstable, more extensive, and more dynamic.

In the book "Competitive Advantage of Nations" Wearing traditional economic trade ideas and present them to explain economic phenomena of failure. Since then he has developed a new paradigm of competitiveness of the country or industry, which used to describe the "model Diamond" The four determinants of competitiveness of the industry model explains. As labor qualified and infrastructure, such as factors of production, such as the position of (1) the country factor conditions or industry, (2) country or market such as the sophistication of demand conditions customers, (3) the organization of these companies and their circumstances as the nature of domestic rivalry and related industries, and (4) business context.

Any country should use porter diamond theory of national advantage. It's designed to help understand the competitive advantage nations. It suggests that the national home base of any organizations are playing a supportive role in shaping the size or scoop to which it is likely to achieve advantage on a global scale. This home base provides basic factors, which support organizations from building advantages in international competition. Porter classifies four determinants: Factor Condition, Diamond Condition, Relatives & supporting and Structure, strategy & Rivalry. Egypt government acts to catalysts to improve Egypt position in a globally competitive economic environment. They found that they can create new factors such as skilled labor and high technology (Porter M., 1990). Porter's diamond model suggests threat there are inherent reasons why some nations are more competitive than others on an international market. Another factor that influence in competitive advantages such as the policies that put by government. One of the most influencer policies is (FDI) Foreign direct investment

Internal rivalry: Porter believes that the power and size of market rivals goes a long way to show the strength a business. If a firm has a much larger market share then any of its market rivals it may not incur as much competition on price or non-price dimensions of the product/service in question and therefore will be a much more powerful business compared