Examples Of Porter's Diamond Theory

In addition, the internationalisation is the strategy to occupy the foreign market step by step. Also, the porter’s competitive advantages theory is to analysis the strategies of global business. They could divide to three strategies: over cost leading, diversity, and market focus strategy (Passemard& Calantone, 2000). The cost leading strategy focus on establish efficient scale production facility and minimize the research and advertising cost. The diversity strategy focus on introduce some unique product in whole industry. But, this strategy will with a high cost price. The focus strategy is attack of a particular customer group or specialist regional market, its purpose to design the service for a particular target. Consequently, the companies need to consider the internal and external factor condition, such as: factor condition, demand condition, related and supporting industries condition, and firm strategy and rivalry. They are called diamond system. This dynamic system gives the company a standard to measure theirs advantage and disadvantage before they enter foreign market. Moreover, the specific advantage in Internationalisation of Production is give companies a new choose for exhausted market (Strange,S. 1992). In an international environment, the companies will face more uncertain and unequal condition than home market, therefore the companies need keep the attention of more factors:

Thesis: Buying your first home can be an enjoyable, exciting and profitable experience given specific knowledge of the process and a basic understanding of the market place.

Macroeconomics is an excellent tool for the analysis of the housing industry as something like a capital good, as a home is considered to be, cannot easily be studied in a short-term platform. Real estate is a good that costs several times more than an average persons annual income, in the United States that number is typically 7 times as much, and in the United Kingdom that number is 14 times as much. Several factors of both supply and demand directly impact the housing market on a macroeconomic scale. (Business Economics, 1)

There are also demand conditions which consist of composition of home demand, size and pattern of home demand, rapid home market growth, and the push or pull of products into foreign and home countries. The overall state of demand conditions heavily influence the preparedness of a company to compete.

But Firstly, we will start this part by talking about the importance of a deep analysis of the industry’s structure. A deep knowledge of the industry the company is in, is extremely important. The industry structure is unique and varies from industry to industry of course. It will determine the level of competitiveness and attraction of the industry. With the Five Forces model (Porter) and PESTEL (Political, Economic, Social, Technological, Environmental, Legal) analysis, the organization will get a better understanding of the market will allow you to know the requirements for the possible creation of sustainable competitive advantages and take the right strategic decisions. According to Porter, to create an efficient competitive strategy, it is important to understand the rules of competition that determine market attractiveness.

The main strengths in the production sector are manufacturing for medical devices, drugs & pharmaceuticals, and manufacturing support and weaknesses are the research and development cluster and logistics cluster. The main strengths in the service sector are patient care and education and weaknesses are marketing, human resources, consulting services, laboratories, and financial resources. There are regional externalities, defined by Kitson as “resources that reside outside of individual local firms but which are drawn on directly or indirectly by those firms and which influence their efficiency, innovativeness, flexibility, dynamism, productivity and competitive advantage. A few examples of regional externalities are quality and skills of the labor force, the extent, depth and orientation of social networks and institutional forms, the range and quality of cultural facilities and assets, the presence of an innovative and creative class, and the scale and quality of public infrastructure. He states that the more localized the industrial clusters are, the more intense the interaction will be between Porter’s components of his “competitive diamond” (social embeddedness, existence of facilitative social networks, social capital, and institutional structures) which will increase

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.

This allows the Company to maximize the return on its land investments by tailoring its home offerings to meet the buyer demands in each of its markets.”(2014-10k Buyers). “The homebuilding industry is highly competitive and there are relatively low barriers to entry. Homebuilders compete for, among other things, homebuying

The Home Depot, an American house improvement retailer store has already occupied a significant market share in the U.S., Canada, and Mexico. The Home Depot operates successfully and establishes a huge and positive reputation in those three countries. In order to earn more profits and globalization, The Home Depot decides to search another potential market oversea.

Housing demand includes household growth, real incomes, real wealth, tax concessions to both owner-occupied and rental housing, concessions to first homebuyers, returns on alternative investments, cost and availability of finance for housing and the institutional structure affecting housing finance provision (Yates, 2008). The growth in the number of households and in real income results in the increased pressure on housing demand.

Another part of Jared Diamond's theory is cereal crops. According to PerSquareMile.com, there is a higher cereal crop yields in countries that have more economic success. A cereal crop is a grass that is grown so that humans or animals can eat the grain. Cereal crops are often found in wealthy countries, and provide an important food source and export for the civilization. A sustainable food source and export will lead to specialist that will help a civilization become more technologically advanced. Having cereal crops will make a civilization geographically

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.

The relationship between the points on the diamond is to apply pressure in each connecting point. So, each point on the diamond is depending on pressure from the other points. For example, factor disadvantages will not lead firms to innovate unless there is sufficient rivalry. The diamond is also a reinforcing system. A high level of rivalry often leads to the formation of unique specialized factors. The Indian software industry developed standards for programming that allowed programmers to write software independent of their familiarity with the hardware.

In his book The Competitive Advantage of Nations Michael Porter examines modern global economy and explains the theory of competitive advantage through a reflection of a “diamond” which maintains its growth and prosperity. Porter who is considered the father of modern businesses and promoter of notions of competitiveness produced a number of books on strategic management in which he bridged the gap between national and international economics. His latest book is specifically the broadest in scope because it shifts the focus of attention from the performance of the firm to the performance of the nation whole. However, the focus of this paper discusses how a developing nation like Qatar is growing its firms’ foundations and bettering its environmental conditions

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