CRITICALLY ANALYSE PORTER'S DIAMOND THEORY.APPLY IT TO EXPLAIN THE INTERNATIONAL COMPETITIVENESS OF AN INDUSTRY OF YOUR HOME COUNTRY.
Overview of Porter’s theoretical perspective
The theory of Porter is a study which works as a tradition that is related to the neo-classical economics with the nature of self adjusting nature of markets. The theory of Porter places innovation and industrialisation of geographic which is one of the number of theories for competitive advantages which aims at the process and development (O’Connell et al., 1997). The industries which work within the nations are focused by the Porter’s theory. Competitive advantage is given by the home nation with certain characteristics and concentration of geographic and this process is enhanced by the rivalries. The systemic character of the Porter’s Diamond Model is shown in Figure 1 which outlines the components of it. Although, determinant of diamond theory interact each other but the systemic natures variable in diamond theory. The arguments on two elements are raised by the Porter which are – concentration of industry geographic and the domestic rivalry and these two elements has simply a great power to make a system by changing this diamond. It promotes the entire national diamond upgrading because of this domestic rivalry. The Porter theory translates it into system because of its magnifying principle of the interactions in the geographic concentration. The final stage of the Diamond Porter’s Model is the linkage between the industries and it promotes clustering to the systemic nature (Clancy et.al., 1999).
Figure 1: Porter’s Diamond Theory
Competitive Advantage, Marketing and Porter:
Any firm which achieve success is known as Competitive advantage which is not a domain of any of the single academic discipline in it. Thus through a review which reveals that marketing plays a central role in building up a competitive advantage. A number of popular approaches include: strong market positions with products and services are not easily substituted, entry- barriers, strong bargaining position, balanced portfolios; mobility barriers; core competencies, innovation and speed or time based competition (Eccles and Nohria, 1992). Here security in market positions, maintains the stable flow and enhance the emphasis of predominance. As per within the organisations, competitive advantages is first related to the marketing function. The work of Michael Porter exaggerated marketing as an extensive in order to address “competitive advantage.” Porter’s “five model” (Porter, 1985) provides the basis for structural analysis of industries in most texts (Baker, 1992; Bradley, 1995). The domain of macro- economists was aimed in such a way that was highly popularised by the Porter’s model, mainly the study of competitiveness. This shows that the study of firm advantage needs to take place in the context of a national environment. The name Diamond was tagged for four determinants (and 2 exogenous variables) which was conceptualised by the national environment. Thus, increasingly, marketing courses and texts incorporate the diamond as part of the analysis of industry (Baker, 1992). The important innovation in Porter’s work for business researchers across various sectors is a translation into a framework of ideas and concepts from different fields. The dynamic and evolutionary view represents the model as the creation of firm advantage depending upon a number of traditions; for example- the theory is based upon the resource and industrial organisational economics. Porter not only provides a point of reference for analysing the research but also a model for strategy research.
Analysis with Porter’s Diamond Framework:
The enabling environment providing the competitiveness only helps the firms to leverage its competitive advantage whose are supporting the activities of the firms. Porter’s Diamond theory reflected all these fundamental concepts in its model and in every...
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