P3 video sample Porter # 39; Diamond
The classical theories of international trade suggest that comparative advantage lies in factor endowments that a country can have the chance to inherit land include the factor endowments, natural resources, labor and the size of the local population.
Michael E Porter argued that a nation can create new endowments advanced factors such as skilled labor, solid technology and knowledge base, government support and growing Porter used a diagram Diamondbacks as the basis of a framework to illustrate the determinants of national advantage the diamond represents the national field game that countries set for their industries.
Individual points on the diamond and the diamond as a whole affect four ingredients that lead to a national comparative advantage These ingredients are.
Information that companies use to decide which opportunities to pursue with the resources and skills.
The points of the diamond are described as follows.
A country creates its own important factors such as skilled resources and technological base.
Factors of the stock at any given time is less important than the extent they are upgraded and deployed.
Local disadvantages of stressors production innovation adverse conditions such as labor shortages or force companies to scarce raw materials to develop new methods, and this innovation often leads to a national comparative advantage.
When the market for a particular product is higher locally and in foreign markets, local companies devote more attention to this than to foreign companies, which leads to a competitive advantage when local companies started exporting the product.
A more demanding local market led to national advantage.
A strong, local market trend allows local companies setting anticipate global trends.
When local industry support are competitive, companies benefit from more cost effective and innovative inputs.
This effect is enhanced when the providers themselves are strong global competitors.
Local conditions affecting corporate strategy For example, German companies tend to be Italian hierarchical societies tend to be smaller and are run more like extended families Such a strategy and structure to determine in what types 'industrial companies in a country will excel.
In the five forces model Porter, low rivalry has an attractive While the industry at a specific point in time a company prefers less rivalry on the long-term local rivalry is better because it puts pressure on companies to innovate and improve actually, local high results in the rivalry within global competition.
Forcing local rivalry companies to go beyond the basic benefits that the country can enjoy, such as low factor costs.
The effect of a point depends on others, for example, the disadvantages of the factors do not lead companies to innovate unless there is sufficient competition.
Diamond is also a self-reinforcing system, for example, a high level of rivalry often led to the formation of unique specialized factors.
Encourage companies to increase their performance, for example by applying strict standards of products.
Stimulate local rivalry by limiting direct cooperation and the application of antitrust regulations.
Industry Japanese facsimile shows the diamond of national advantage of Japanese companies reached domination is this industry for the following reasons.
Japanese factor conditions Japan has a relatively high number of electrical engineers per capita.
Japanese demand conditions The Japanese market was very demanding because of the written language.
A large number of related industries and support with good technology, for example, good miniaturized components because there is less space in Japan.
Domestic rivalry in Japanese fax machine industry has driven innovation and led to a rapid reduction of costs.
Government support - NTT telecommunications company owned by the state changed its cumbersome approval requirements for each installation to a more general type approval.
Porter, Michael E The competitive advantage of nations.
In this work of 800 pages, Michael Porter presented his diamond national advantage and self-perpetuating nature of the diamond It then applies to examples in both manufacturing and services, and uses the value chain to explain the growing role of services the book concludes with implications for company strategy and national programs.
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Diamond Advantage National Wear, Wearing diamond, national advantage.