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- The Porter Diamond Model identifies four main determinants that shape the competitive advantage of a nation12:
- Factor conditions: These include a country's resources, infrastructure, and skilled labor.
- Demand conditions: The level of demand for products or services within a country.
- Related and supporting industries: The presence of complementary industries that support a particular sector.
- Firm strategy, structure, and rivalry: The competitive environment and how companies operate within it.
Learn more:✕This summary was generated using AI based on multiple online sources. To view the original source information, use the "Learn more" links.The model consists of four main determinants that shape the competitive advantage of a nation: factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry. Example Let’s consider the automobile manufacturing industry in Germany as an example to illustrate the Porter Diamond.quickonomics.com/terms/porter-diamond/Key Takeaways
- The four factors contributing to competitive advantage in an industry are firm strategy, structure, and rivalry; related and supporting industries; factor conditions; and demand conditions.
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The national context in which companies operate largely determines how companies are created, organized and managed: it affects their strategy and how they structure themselves. Moreover, domestic rivalry is instrumental to international competitiveness, since it forces companies to develop unique … See more
Factor conditions in a certain country refer to the natural, capital and human resources available. Some countries are for example very rich in natural resources such as oil for example (Saudi Arabia). This explains why Saudi Arabia is one of the largest exporters … See more
The presence of related and supporting industries provides the foundation on which the focal industry can excel. As we have seen with the … See more
The role of the government in Porter’s Diamond Model is described as both ‘a catalyst and challenger‘. Porter doesn’t believe in a free market where the government leaves … See more
The home demand largely affects how favorable industries within a certain nation are. A larger market means more challenges, but also creates opportunities to grow and become better as a company. The presence of sophisticated demand conditions from local … See more
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WEBSep 3, 2024 · The Porter Diamond Model visually resembles the points of a diamond and includes the factors of strategy, structure and rivalry, related industries, demand conditions, and factor conditions.
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