The Diamond Model by Michael Porter Essay

The Diamond Model by Michael Porter Essay

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Michael Porter developed Porter’s Diamond, also known as The Diamond Model, in 1990 in his book ‘The Competitive Advantage of Nations’. The four determinants of Porter’s diamond must operate as a system rather than individually. It provides the answers to ‘Why does nation achieve international success in a particular industry?’ (Porter, 1998:71). Despite the universal application of Porter’s diamond framework, many critics argued that the model is flawed. This essay aims to discuss the different critiques drawn to the diamond network. Firstly, an overview of Porter’s Diamond model will be entailed. Thereafter, focus will be on the many criticisms of the model. For example, many criticized the lack of consideration of the influence of the government and the role of chance in the nation. Some also critique on the inaptness of the framework to small economies, while others comment on the lack of historical perspective of the framework and lastly, the neglecting of national culture in the framework.
Porter’s Diamond Model
The Diamond Model (figure 1) outlines the ‘four broad attributes of a nation that shape the environment, in which local firms compete that promote or impede the creation of competitive advantage’ (Porter, 1998:71). It helps to understand the competitive position of nation in global competition. The four determinants of national advantage are 1) factor conditions, 2) demand conditions, 3) related and supporting industries and 4) firm strategy, structure and rivalry.







FIGURE 1: Porter’s Diamond (Adapted from Porter, 1990)


Factor conditions refers to factors of production; the inputs that are necessary to compete in any industry, these include labor, land, natural resources, capital and infrastruct...


... middle of paper ...


...millan.

Redding S.G., Competitive Advantage in the Context of Hong Kong, in The Competitive Advantages of Far Eastern Business, edited by Fitzgerald, R. (1994)
Porter, M (1990). The Competitive Advantage of Nations. New York: Palgrave Macmillan.

Rostow, W.W (1960). The Stages of Economic Growth. London: Cambridge University Press.

Rugman, A.M and D'Cruz, J.R. (1993). The "Double Diamond" Model of International Competitiveness: The Canadian Experience. MIR: Management International Review. 33, 17-39.

Van den Bosch. F. (1994). Government's Impact on the Business Environment and Strategic Management. Journal of General Management. 19 (3), 50-59.

Van den Bosch. F, Van Prooijen. A. (1992). The Competitive Advantage of European Nations: The Impact of National Culture - a Missing element in Porter's Analysis. European Management Journal. 10 (2), 173-77.

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