Porter's Theory of National Competitive Advantage

I believe that the United States has opportunities that will help increase the national competitive advantage that it has over other countries in the world because the United States is finding ways to manufacture goods at a high rate to satisfy the needs of the consumer. I find that businesses such as Honda and Toyota have to compete at a high level in order to attract the services of the consumer who is looking to buy a new car that they feel they are wanting to have for a long while. They will usually innovate with new car models that will necessarily have new features that the predecessor before it didn't have and will be able to negotiate a deal with the consumer to buy it. I find that companies will use under-handed techiques to try and

It is recommended that Rhand Credit Union Co-operative Society Limited use this model to find a position in the financial services industry where it can defend itself against competitive forces or it can influence its competitors in its favour as well as identify key success factor (KSFs) in the industry.

1. High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy: A. global B. multidomestic C. transnational D. overall cost leadership 2. Foreign direct investment includes the following form of entry strategy: A. licensing B. franchising C. joint ventures D. exporting 3. According to Michael Porter, firms that have experienced intense domestic competition are A. unlikely to have the time or resources to compete abroad. B. most likely to design strategies aimed primarily at the domestic market. C. more likely to design strategies and structures that allow them to successfully compete abroad. D. more likely to demand protection from their governments.

I've always been a calm and collective individual, favoring the slow and calculated approach to problem solving, assuring the problem is achieved to maximum success. As such, I'm the kind of person to try everything first hand, in order to find out the true best way in order to accomplish a task, despite what a guide may say. However, I also have the intelligence to do so in a productive way. They say you shouldn't reinvent the wheel, and to build upon others success, at some point someone tried just that, and was able to create a 'better' wheel. At the end of the day, it is still a wheel, but it's this innovation that drives the world forward. I'm an innovator. I'll be the guy trying the thing no one thought of, using some method someone dismissed as 'xp waste' and still be able to put some spin on it in order to create something that is better than everything else.

However, it was apparent to economists that nations with similar resource endowments exchanged similar products with each other. Economists felt that trade explained solely by comparative advantage was an incomplete analysis of international trade. Furthermore, since the classical trade theory was unable to explain intraindustry trade, economists decided to expand on the classical trade theory by creating a new theory of trade (Carbaugh, 2011). The new theory states that economies of scale provide incentive for a country to specialize in a particular product (Carbaugh, 2011). Furthermore, based on economies of scale, nations with similar factor endowments will trade with each other as sometimes it is beneficial (Carbaugh, 2011). Arguments stemming from this new trade theory puts the economic case for free trade in doubt.

Michael Porter investigated why nations have a competitive advantage in specific industries his findings saw two basic types of competitive advantage that firms could pose low cost or differentiation. If you combine the two types of competitive advantage and allow room for a way in which firm wish to achieve them this will lead to three generic strategies which will achieve higher average performances in industries: cost leadership, differentiation and focus.

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)

“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

The threat of new entrants refers to the threat posed by new competitors within an industry. If it is easy for new firms to enter the industry barriers to entry are low and the threat of new entrants is high. A profitable industry attracts more competitors. Economies of scale, learning curve effects and other macro factors impact the nature of an industry 's

 In general, manager’s look at competition has been too narrow. There is a broad set of competitors that need to be looked at, which are described in “The Five Competitive Forces That Shape Strategy” by Michael E. Porter. The model explains that there are several other forces in the competition for profits that the strategist should be aware of when forming a stagey. Those forces determine the profitability of the industry and are the most important to look at when you are forming a strategy. These five forces are are the “industry structure” model which contain: New Entrants, Suppliers, Buyers, Substitutes, and Existing Competitors.

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

There is no exact definition for Strategy because it is defined in different ways as some people think that make a plan to get success in future is a strategy while others think that future is hard to predict. Exceptionally, some Japanese companies have no strategies though these companies have a good cost and continuous improvement. The definition for strategy is to explain the direction and scope of any company for the long term to achieve advantage for the company or to fulfill the needs and expectations. Strategy is different from Operational effectiveness and they work in different manner in the companies. Michael Porter, who is a professor at Harvard Business School and a strategy expert, says that it should determine how organizational resources and skills should create advantage. Accordingly, Strategy can also be defined as an organizational change during actions in the organizations for better and advantageous results or to determine how we win and get success in the future period. It is a needful developed plan with respect to market to compete the world. Organizations should be responsible for competitive changes according to the market. It is the main goal for any Organizations. Business/IT strategy is very important to know the success rate of your business. Apart from Business Strategy, the other two main types of strategy are Corporate Strategy and Team Strategy. These strategies give competitive advantage of cost leadership, differentiation and focus. The

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).

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