Development of a Firm's International Competitiveness

Global Marketing

François Trouillet

The decision whether to internationalize Chap 4: Development of the firm’s international competitiveness

Learning objectives (1)
• Define the concept international competitiveness in a broader perspective from a macro level to a micro level
• Discuss the factors influencing the firm’s international competitiveness
• Present the Porter’s competitive-based five forces model

Learning objectives (2)
• Explore the idea behind the competitive triangle • Analyse the basic sources of competitive advantage • Explain the steps in competitive benchmarking • Explain how a company can create customer value by the use of Blue Ocean Strategy

Development of a firm’s international competitiveness

• Macro level: Analysis of national competitiveness • Meso level: Competition analysis in an industry • Micro level: Value chain analysis

Development of a firm’s international competitiveness

Porter’s diamond
• The characteristics of the home base play a central role in explaining the international competitiveness of the firm. • The explaining elements consist of several areas.

Analysis of national competitiveness (Porter diamond)

Chance

Firm strategy, structure, and rivalry

Factor conditions Demand conditions Related and supporting industries

Government

Factor conditions in Porter’s diamond
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Climate
Physical infrastructure
Natural resources
Educational system
Human resources
Technological infrastructure
Capital

Demand conditions in Porter’s diamond
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Nature of home demand
Size of home demand
Economies of scale
Transportation costs
Buyer sophistication

Development of a firm’s international competitiveness

Competition analysis in an industry (Porter’s 5 forces model) New entrants
Industry level

Market
Competitors
Suppliers

Market level

Buyers

Intensity of rivalry

Substitutes