Diamond Concept: Measuring Competitive National Advantages Essay

18. __________ basic argument, articulated through the theory of absolute advantage, is that a country

Porter’s Five Competitive Forces Analysis is a framework developed by Michael E. Porter of Harvard Business School for study of industry analysis by analyzing five competitive forces which define industry and its business strategy. These five competitive forces determine the competitive advantages, disadvantages and attractiveness or profitability of industry.

The country can maximize their wealth by putting the resources in the most competitive industries. Government created comparative advantage rather than free trade because now easier moves the production processes and the machines into countries that can produce more goods (Yeager & Tuereck, 1984). However, many countries now move to new trade theory suggests the ability firms to limit the number of competitors associated with economic scale (reduction of costs with a large scale of output) (Krugman, 1992). The comparative advantage occurs when two-way trade in identical products, it will useful where economic scale is important, but it will create problem with this model. As a result, government must intervene in international trade for protection to domestic firms (Krugman, 1990)

There have been many different reactions towards Porter’s theory on how nations ought to compete. Some responses were validated while others rebutted his theory. Firstly, the positive response will be discussed before focusing on the criticisms of Porter’s theory. Oz (2002) implemented Porter’s Diamond model to analyse the competitive advantage of five Turkish industries and the outcome was favourable and thus validated Porter’s theory. For example, the uncompetitive Turkish automobile industry resulted in uncompetitive companies, while the presence of demanding buyers and hence intense local rivalry in Turkish construction and leather-clothing industries pushed the companies to innovate and become globally competitive. The Turkish findings by Oz thus validated Porter’s theory that indeed, competitive industries of a nation are inclined to cluster together.

“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

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

Each nation operates and establishes four main attributes which constitute the diamond of national advantage; these attributes are factor conditions, demand condition, related and supporting industries and firm strategy, structure, and rivalry. When identifying these attributes, it may helps companies to learn how to compete; and each point of the whole system can affect directly for achieving international competitive advantage in the company. We can cite the pressures to invest and innovate, the goals of the managers and owners, the information available that shapes the opportunities, the direction in which they deploy their skills and the availability of skills and resources. First factor conditions according to an economic view that the factors of production are labor, natural resources, land… all these determine the flow of trade. But in the sophisticated companies it creates the most important factor of production such as skilled human resources and performance. Considering and involving heavy and specialized investment which constitutes an advantage in knowledge intensive industries. Sometimes nations succeed

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.

Michael E. Porter, associate professor published the article titled “How Competitive Forces shape Strategy” in Harvard Business Review in 1979. This article is retitled as “The Five Competitive Forces That Shape Strategy” and published in Harvard Business Review in 2008. Michael E. Porter developed the model of Five Competitive Forces which is defined as “Competitive Strategy – Techniques for Analyzing Industries and Competitors”. It has become a main device for analyzing an organizations structure in strategic practices.

The concept of absolute advantage is one of the most fundamental areas of concern in the study of economics. In its basic meaning, absolute advantage refers to the ability of one individual or party to produce more of a particular good or service than other competitors given the same amount of resources. In this regard, absolute advantage becomes a very important aspect in the concept of international trade as it clearly defines the different areas where countries should specialize in order to maximize their productivity and enhance international trade. The principle of absolute advantage was first elucidated by Adam Smith in his study of international trade using labor and capital as the only factor inputs(Free, 2010).

The same critics that Zahra has addressed to Oviatt and McDougall’s analysis applies on his list of factors contributing to the INV’s competitive advantage. We should acknowledge that every country has some economic or cultural specificity; therefore there are some universal business rules which apply on the entire global market. The traditional firms, who possesses years of local market experience, ownership and abundance of their resources are more qualified to compete on the international level.

Key Questions. Simply: this is not just a question about Porter. If you are thinking of outlining Porter and little else, please think again. Very briefly state what the concepts of national competitiveness and the diamond entail, which is naturally connected to the work of Porter. But the question is asking you to focus on critique. Therefore, what are the key issues, debates and problems with the ideas about the Competitive Advantage of Nations and the national diamond? The second half of this synergic question suggests you employ other ideas and a lot

Comparative advantage is a principle developed by David Ricardo in the early 19th century to explain the benefits of mutual trade (Carbaugh, 2008). Many underlying assumptions of comparative advantage depend on states of economic equilibrium and an absence of economy of scale. In reality, economies are dynamic and subject to innovation and interference; which has led to revised assumptions of return and competition (Krugman, 1987). These factors have created questions of free trade and governmental participation in an economy by the development of strategic trade policies. These new concepts do not replace the theory of comparative advantage; however, they further explain how trade can benefit a country's economy (Krugman, 1987).

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

Key Questions. Simply: this is not just a question about Porter. If you are thinking of outlining Porter and little else, please think again. Very briefly state what the concepts of national competitiveness and the diamond entail, which is naturally connected to the work of Porter. But the question is asking you to focus on critique. Therefore, what are the key issues, debates and problems with the ideas about the Competitive Advantage of Nations and the national diamond? The second half of this synergic question suggests you employ other ideas and a lot