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...
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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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