Highlights of the national diamond weapons
Strategic analysis generally focuses on two points of view of the organization of industry-based view and RBV resources These views analyze the organization without taking into consideration relationship between strategic choice organizations ie Porter generic strategies and institutional frameworks National diamond is a tool for analyzing the organization of the national diamond work environment that emphasizes strategic choices should not be only a function of the industry structure and resources a business, it should also be based on the constraints of the institutional framework of institutional analysis as the national diamond becomes increasingly important as companies enter new operating environments and operate in new institutional frameworks.
The national framework Michael Porter diamond the result of a study of comparative advantages between industrialized models It works to integrate a lot of previous work of Porter's theory of the five competitive forces, its value chain framework as well his theory of competitive advantage in a consolidated framework basis that looks at the sources of competitive advantage sourcable the national context, it can be used both to analyze the ability of a company to operate in a national market, as well as analyze the capacity of a national market to competition in an international market.
It recognizes four pillars of research factor conditions, demand conditions, related industries and support, firm structure, strategy and rivalry that should be done in the analysis of the viability of a nation competition on a particular international market, but it can also be used as a comparative analysis tool to identify which country a particular company is adapted to the expansion.
Two of the pillars mentioned above focus on the national environment of macroeconomics to determine if the request is present, and the factors necessary to say production two extreme ends of the other pillar value chain focuses on relationships specific support for industries with specific industry business nation being studied last pillar, he examines the company's strategic response microeconomics needing strategy, taking into account the structure of the industry and rivalry see five forces in this way, it attempts to highlight the areas of competitive advantage and the competitive weakness, looking at a nation adequacy companies to the particular conditions of a particular market.
A graphical representation of Porter's Diamond National.
For the analysis of national competitiveness, we need to focus on business performance The role of the national environment provides a context in which companies develop their identity, resources, capabilities, and management styles.
For a country to maintain a competitive advantage in a particular sector of the industry requires dynamic advantage companies must expand and extend the basis of their competitive edge through innovation and improved dynamic conditions that influence innovation and upgrading are much more important than the initial endowment of resources to determine national competitiveness trends.
The four components of the framework are.
Factor endowments can be classified into two forms.
Resources locally grown highly specialized resources.
For example, in the Hollywood film production analysis preeminence, Porter said the local concentration of skilled labor, including different schools of cinema UCLA USC also in the region, resource constraints can encourage development of alternative capabilities; relative lack of raw materials from Japan spurred miniaturization and manufacturing zero defect.
For many companies, the presence of related industries and support is crucial for the growth of this industry A key concept here is that national competitive forces tend to be associated with clusters of industries, for example , Silicon Valley in the US and Silicon Glen UK are techno groups of high-tech industries that includes individual software and semiconductor companies in Germany, a similar group exists around chemicals, dyes synthetic textiles and textile machines.
Demand conditions in the domestic market are the main driver of growth, innovation and quality improvement The principle is that a strong internal market stimulates the company to be a start-up to a little wider and the organization as an illustration, we can take the case of Germany, which some have dominated the world regarding the segment high performance of the global automotive industry, however, their position on the market, cars mass produced good leading auto enterprise market as Mercedes BMW Porsche German car manufacturers of the world is much smaller This can be linked to a domestic market that has always required a high level of performance also engineering, transport infrastructure in Germany, with its Autobahn tends to favor high-performance automobiles.
National performance in specific areas is inevitably linked to the strategies and business structure in this sector competition plays a big role in driving innovation and subsequent upgradation competitive advantage Since the domestic competition is more direct and impacts earlier that the measures taken by foreign competitors, the stimulus provided by them is higher in terms of innovation and efficiency, for example, the Japanese auto industry with 8 major competitors Honda Suzuki Toyota Isuzu Nissan Mazda Mitsubishi and Subaru offer strong competition in the domestic market and foreign markets which they compete.
The role of government in Porter's Diamond model acts as a catalyst and challenger; it is to encourage - or even push - companies to raise their aspirations and move to higher levels of competitive performance They must encourage companies to increase their performance, stimulate early demand for advanced products, focus on the creation of specialized factors and to stimulate local rivalry by limiting direct cooperation and enforce anti-trust regulations.
Criticism of the national Porter diamond model resolves around a number of assumptions that underlie as described by Davies and Ellis.
Sustainable prosperity can be achieved without a nation become strong diamonds focused on innovation are not in place the foundations of the house many industries and internationally successful foreign direct investment does not mean a lack competitiveness or low national productivity.
Porter widespread North American, European and Japanese experiences; for developing countries, in the presence of the now developed regions, the model may need to reconsider.
Robert M Grant 1991 competitive advantage Wear Nations Assesement A Strategic Management Journal 12, 535-48.
Robert M Grant 2005, Contemporary Strategy Analysis Blackwell Publishing.
Kenichi Ohmae 1985 Triad Power Shape of Global Competition came from New York Free Press.
Michael E Porter 1990 The competitive advantage of the United Nations New York Free Press.
Howard Davies Paul Ellis 2000, Porter competitive advantage of nations for the time final judgment Journal of Management Studies, 37 1188-1213.
National Diamond, National, diamond, companies increase their.