The Diamond Model by Michael Porter Essay

The Diamond Model by Michael Porter Essay

Length: 1123 words (3.2 double-spaced pages)

Rating: Strong Essays

Open Document

Essay Preview

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 ...


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.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Competitive Advantage of Nations by Michael Porter Essay

- Does Porter’s ‘Diamond’ concept convincingly explain the achievements of major national business systems, or are their weaknesses, theoretically and empirically, in his arguments. In The Competitive Advantage of Nations, which was published in 1990, Michael Porter – who has dedicated most of his career to studying businesses and how they can develop a competitive advantage (Competitive Strategy, 1985) – the author offers a theoretical framework, which outlines the underlining factors that contribute to national competitiveness....   [tags: diamond concept, government, chance]

Strong Essays
2287 words (6.5 pages)

Criticism of Porter’s Model of National Competitive Advantage Essay

- This study focuses on discussing the criticism of Porter’s model of national competitive advantage. In order to fully discuss the limitations of Porter’s model of national competitive advantage, the determinants in Porter’s diamond model should be explained. Therefore Porter’s diamond model and its elements are analyzed in the first part of the study while rest of the study is explaining the limitations of the Porter’s diamond model that are late development theory, the role of the state, multinational enterprises, foreign direct investment, national competitiveness and history....   [tags: conditions, economy, policy]

Strong Essays
1266 words (3.6 pages)

Porter's Diamond Of Competitive Advantage Essay

- Introduction Since its publication in 1990, Michael Porter's book The Competitive Advantage of Nations has attracted much consideration. The main analytical tool of the book is the diamond of competitive advantage (figure 1). This model is based on four country specific "determinants" and two external variables. Porter's four determinants and two outside forces interact in a "diamond" of competitive advantage, with the nature of a country's international competitiveness depending upon the type and quality of these interactions....   [tags: Business Economics]

Free Essays
1584 words (4.5 pages)

What Is Rugman's Critique Of Porters Diamond Model? Essay

- What is Porter Diamond Model. It was known as a Diamond Model by anyone or public. The diamond model is one of the economic model developed by Porter's in 1990 in his own entitled. 'The Competitive Advantage' of Nation's, where he published herself on his theory. The theory was founded by Michael Porter's that has been used by certain industries only, where it will be more competitive in some specific location. The theory by Michael Porter is why the particular industries become a more competitive in some particular locations....   [tags: competitive advantage of nations]

Strong Essays
1605 words (4.6 pages)

What Is Rugman's Critique Of Porters Diamond Model? Essay

- What Is the Porter Diamond Model . He was recognized as a model by Diamond Anybody or layman . Diamond model is one of the economic model was awakened by Porter in 1990 in the titled itself, ' Excess Competition ' than this nation , in which he published himself in his theory . This theory has been founded by Michael Porter that has been used by certain industries sake only, where it will become more competitive in a particular location. By Michael Porter's theory of why particular industries become more competitive in certain locations....   [tags: business competition theories]

Strong Essays
1789 words (5.1 pages)

International Trade: Adam Smith and Michael Porter Essay example

- The extended economic recession we have been facing in the UK since the 2008 financial crisis, and the rising levels of unemployment here, have raised significant concern about what the government can and should be doing to help revitalize the economy. In this essay I analyse possible solutions to this from the viewpoint of two different economic philosophers, Adam Smith, based on his publication “The Wealth of Nations” and Michael Porter, based on his 1998 Harvard Business Review article “Clusters and The New Economics of Competition”....   [tags: Economic Philosophy, Role of Government]

Strong Essays
1810 words (5.2 pages)

Marco Porter Theory Essay example

- As of June 2009, USAID claimed working relationships with over 3,500 American companies and over 300 private volunteer organizations. In its effort to encourage economic growth and trade, USAID has the following components: a) Business Enabling which helps countries lower the cost and risks of doing business; b) upgrading commercial legal systems – USAID helps reform laws, revise policies; c) improving business regulation- with co-orperation from the World Bank’s “Doing Business” program; d) promotes the development of diverse and healthy institutions in order to help countries build projects and help poor the poor (   [tags: USAID, Partnerships]

Strong Essays
1012 words (2.9 pages)

Essay on Analyse the case study with reference to Michael Porter’s Theory

- Analyse the case study with reference to Michael Porter’s Theory of Competitive Advantage and answer the following question: Does America have competitive advantage in the textile and garment industry. Analyse the case study with reference to Michael Porter’s Theory of Competitive Advantage and answer the following question: Does America have competitive advantage in the textile and garment industry. You answer must include the following elements: 1. A clear outline of Porter’s theory with supporting references....   [tags: Business and Management Studies]

Free Essays
2553 words (7.3 pages)

Analysis Of Michael Porter 's Five Forces Model Essay

- Introduction Myra opened UMUC Haircuts in 1995 but has recently become aware of an increase in competition from numerous competitors. Lately, there has been news of a Hair Cuttery opening up within five miles making Myra anxious about how it might effect her business. She hopes her salon is able to remain and increase revenue by developing some aspect of her business. Five Forces Analysis The Five Forces Model, developed in 1979 by Michael Porter, is a useful business resource. It allows a business to determine if it can be profitable based on the industry and other competitors, in this case the competitor being Hair Cuttery....   [tags: Strategic management, Porter five forces analysis]

Strong Essays
737 words (2.1 pages)

Porter 's Five Forces Model Essay

- 1. Describe Michael Porter’s model and its components. Pick an industry and describe how the different components of the model relate to the industry. Porter 's Five Forces model, it named after Michael E. Porter. He identifies and analyzes five competitive forces that structure every industry, helps to determine an industry 's weaknesses and strengths. There are five components of Porter 's five forces model i. Potential of new entry into the industry ii. Rivalry among existing firms iii....   [tags: Strategic management, Porter five forces analysis]

Strong Essays
1090 words (3.1 pages)