Porters Diamond

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:

The location of a business has a large impact of future sales and success. The potential location holds communities that are very close-knit and once loyalty is established sales can be maintained. The personal relationships with the customers are highly important in this area.

International business meshes across multiple domains most notably market entry strategies and sociocultural variances. Factoring in those two critical aspects and giving them the right amount of attention is the separating line between success and failure. Terralumen, Blue Ridge, and Delta are all successful companies; However, by not observing the basic requirements of

What are the secrets of India’s success in information technology? By using Porter’s Diamond Model, this article tries to answer that question. Based on the analysis, it seems the only determinant in the Porter’s Diamond that creates India’s success is Factor Condition (i.e. the Indian intellectual capital and “Indian connection” in Silicon Valley). The supporting determinant outside the diamond is the outsourcing trend in current global competition, which can be considered as the Chance in the Porter’s Model. This could be mean one of these possibilities: either Indian success will not be sustainable or Porter’s model needs revision.

The N11 nations are additionally distinctive in their business surroundings, influencing their relative appeal as a venture destination. A countries business environment is roughly explained as the mix of inner and outside elements that impact an organization's or nations working circumstance. The business environment can incorporate components, for example, customers and suppliers; its opposition and proprietors; enhancements in innovation; laws and government exercises; and market, social and financial

Rugman’s analysis resulted in the “double diamond being creative which is a better tool to analyze the international competitiveness. Rugman’s criticism of Porters diamond appears have to be successful as Porter himself later on admitted that firms can have multiple home bases. For instance, Mexico’s economic future is closely linked to its neighbor the United States of America and also through North America. Hence the double diamond proposed by Rugman proves to be more effective in determining Mexico’s success/ resurgence in various economic sectors.

In this individual assignment, I am required to explain the expansionary aspect of a company’s business into the global landscape. I am also needed to identify, discuss and comment on the identify factors that push the organisation to expand internationally. Therefore, I had appointed the Nestlé Company in China and I am need to analyze the environment factors that may attracted Nestlé Company enter into China.

Competitive rivalry exists between companies with the same or similar products/services and similar markets. Factors to be considered include:

The international business environment can be defined as the environment in different sovereign countries, with factors exogenous to the home environment of the organization, influencing decision making on resource use and capabilities.

The traditional internationalization models regard that firms’ capabilities (internal factors) lead firms to make internationalizing activities. On the contrary, OC paradigm refers to internationalization as a process that internal and external factors interact so that firms obtain a competitive advantage in the global level (Mathews & Zander, 2007). According to this innovative model, firms achieve superior performance by adapting and integrating in view of a varying environment (Pisano et al, 2007). Considering that BGs try to survive, operating under uncertain conditions that change all the time, OC constitutes the most suitable way for studying them.

However, Rugman and D’Cruz. (Moon, H.C., Rugman, A.M., &Verbeke, A. ,1995) argues that this model fails to include the effects of multinational activities which has led the people to underestimate the potential of certain nation’s economy. Similarly , Moon, H.C. A (1994) argues that Porter's methodology does not take into account the organizational complexities of true global operations by multinational firms. Therefore, the degree of the applicability on the Porter’s Diamond model is debatable.

A company’s decision in the selection of the right location, is a key ingredient in a business's success. If a company selects the wrong location, it may have inadequate access to customers, workers, transportation, materials, and so on. Therefore, location often plays a huge role in a company's bottom line and ultimately its success. Location strategy is a critical factor in the success or failure of a company. A good plan for acquiring the optimal location by identifying needs and objectives, searching for, and acquiring the best suitable location is a successful location strategy. Usually, a firm will set its goals on maximizing opportunity while minimizing its costs and risks. (Heil, K., 2006)

{text:bookmark-start} INTRODUCTION: {text:bookmark-end} It is important for organizations operating and competing at global level to understand how it fits into the external environment that it operates in. The twenty first century has witnessed frequent fluctuations in these international environment in which businesses operate which in turn has encouraged these businesses to concentrate heavily on strategising the manner in which the company survives, grows, competes and achieves its goals. The top management of these organizations take decisions with an ultimate holistic goal of achieving a sustained competitive advantage and in order to achieve this they have been focussing on managing their internal

Furthermore, little research has been done about how environmental factors influence new venture internationalisation, and more research is necessary to find out how these factors influence early internationalisation (Fernhaber, 2007). Environmental factors are factors that a firm cannot control, and that are part of the external environment they operate in (Zou and Stan, 1998). These factors can have a significant push and pull effect on new ventures to internationalise

Carrying out an environmental analysis can help determine the viability of investment. The elements that need to be analyzed in such a probable country include political, economical, social, technological, environmental and legal, which are popularly referred to as PESTEL analysis (Sexton & Vlasto, 2012). Besides, the company must evaluate its internal analysis in the lens of the new market by carrying out a SWOT analysis to establish its strengths, weaknesses, opportunities and threats. The reasons why companies chose to become multinational corporations vary. Even before carrying out market analysis, the reason is always there. Establishing the right country to invest, can go a long way in expanding the business in the future markets. However, some ventures fail, but that does not mean that the business cannot still do well in other alternative markets (Sexton & Vlasto, 2012). All in all, there are different reasons which push companies to go into the global market, otherwise known multinational companies. The reasons are discussed below.