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1. Which of the theories of international trade can help Indian services providers gains competitive edge over their competitors?
1.ONE SUGGESTED THEORY to gain dynamism and competitiveness
IN OPERATION .
A.Developing executive leadership at three levels that is
-top team,
-the personal development of individual executives as leaders and
-the Chief Executive Officer (CEO)
B.Getting strategy to work
C.Achieve learning through knowledge management
D.Achieve supply chain excellence
E.Develop branding strategy
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2. Productivity for INTERNATION TRADE Competitiveness
The rapid changes in the context of the process of economic reform,
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Traditional country advantages
Traditionally, economic theory mentions the following factors for comparative advantage for regions or countries:
1. Land 2. Location 3. Natural resources (minerals, energy) 4. Labor, and 5. Local population size.
Because these 5 factors can hardly be influenced, this fits in a rather passive (inherited) view regarding national economic opportunity.
Porter says that sustained industrial growth has hardly ever been built on above mentioned basic inherited factors. Abundance of such factors may actually undermine competitive advantage! He introduces a concept called "clusters" or groups of interconnected firms, suppliers, related industries, and institutions, that arise in certain locations.
Porter Diamond Nations
According to Porter, as a rule competitive advantage of nations is the outcome of 4 interlinked advanced factors and activities in and between companies in these clusters. These can be influenced in a pro-active way by government.
PORTER argued that a nation can create new advanced factor endowments such as skilled labor, a strong technology and knowledge base, government support, and culture. PORTER used a diamond shaped diagram as a basis of a framework to illustrate the determinants of national advantage. The diamond represents the national playing field that the countries establish for their
Porters Generic Competitive Strategies: The relative position of a company within its industry concludes whether the profitability of the firm is above or below the industry’s average. The above average profitability of the firm is fundamentally showing the sustainable competitive advantage in its long run. According to Michael Porter, competitive advantages originate from the value of a firm and there are two types of competitive advantages, which a company can own. These are low cost or differentiation. For any company, in
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 section aims to elucidate the concept of industrial clusters, reaching a concise definition of the term for the purpose of this paper. It then proceeds to provide a brief overview of the advantages and potential disadvantages of clustering.
The issue and concept addressed in the case study is trade theories such as competitive advantages and also the benefits and costs brought by international trade and its related government policies.
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.
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.
Strong government support created competitive advantages in the aircraft industry and led Embraer to become a global player. As a factor condition in the determination of national competitive advantage by Porter (Exhibit 1), the government established an environment where Embraer was able to procure raw materials easily through no tax or duty on imports.
“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
According to Michael Porter, “Every industry has an underlying structure, or a set of fundamental economic and technical characteristics, that give rise to these competitive forces” (Porter 1998:23). The forces mentioned above are: industry rivalry, threat of new entrants, threat of substitute products, bargaining power of suppliers and bargaining power of buyers. Additionally, Porter mentioned that: “Knowledge of these underlying sources of competitive pressure provides the groundwork for a strategic agenda or action” (Porter 1998:22).
Competitive advantage is explained by Mahoney and Pandian (1992) as the function of industry analysis, organizational governance and the firm’s effects in the form of resource advantages and strategies. In order for a firm to be competitive it must adapt to the volatile business environment and through strategic management decisions establish a competitive advantage that will ultimately produce superior performance relative to its competitors (Akimova 2000).
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.
2. The industry and competitors : analysed by Porters 5 forces framework with critical success factors and strategic groupings
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