Porter Diamond Theory Case Study: German Car Industry
Abdullahi Miriam 0917517 PO3034 The EU and the Global Economy
PORTER DIAMOND THEORY Case study: German car industry
Date of submission: 16 November 2009
The luxury cars industry is one of the most prestigious mass-production industries in Germany. The country is recognised by many as the native land of the automobile; in fact in 1901 900 vehicles a year were already produced.
Throughout the century the sector turned out to be the pillar of the national economy. Germany's famous premier brands such as Porsche, Audi, Volkswagen, Mercedes-Benz and BMW are enviable all around the world (ACEA, European Automobile Manufacturers Association 2008).
We are now going to tackle the question of why Germany is the home base for so many successful international competitors in the automotive cars industry.
Porter's Diamond Model will be used in analysing the key factors that led these firms to be both nationally and globally competitive, and the nation to become one of the three leading automobile-producer together with the USA and Japan.
Michael Porter focused for four years in ten important trading nations and then discovered four interlinked advanced factors for competitive advantage for countries or region which are: factor conditions, demand conditions, related and supporting industries, firm strategy, structure and rivalry
To these four key elements the author added the role of government and the role of chance (Porter, M. 1990).
German car manufacturers and suppliers are world leaders in innovation with more than 3,500 registered patents every year. With 47 OEM[1] components and assembly plants, 32 industry-related innovative clusters and Europe’s most experienced workforce, Germany is the primary location for technology-driven companies active in all stages of the
PORTER DIAMOND THEORY Case study: German car industry
Date of submission: 16 November 2009
The luxury cars industry is one of the most prestigious mass-production industries in Germany. The country is recognised by many as the native land of the automobile; in fact in 1901 900 vehicles a year were already produced.
Throughout the century the sector turned out to be the pillar of the national economy. Germany's famous premier brands such as Porsche, Audi, Volkswagen, Mercedes-Benz and BMW are enviable all around the world (ACEA, European Automobile Manufacturers Association 2008).
We are now going to tackle the question of why Germany is the home base for so many successful international competitors in the automotive cars industry.
Porter's Diamond Model will be used in analysing the key factors that led these firms to be both nationally and globally competitive, and the nation to become one of the three leading automobile-producer together with the USA and Japan.
Michael Porter focused for four years in ten important trading nations and then discovered four interlinked advanced factors for competitive advantage for countries or region which are: factor conditions, demand conditions, related and supporting industries, firm strategy, structure and rivalry
To these four key elements the author added the role of government and the role of chance (Porter, M. 1990).
German car manufacturers and suppliers are world leaders in innovation with more than 3,500 registered patents every year. With 47 OEM[1] components and assembly plants, 32 industry-related innovative clusters and Europe’s most experienced workforce, Germany is the primary location for technology-driven companies active in all stages of the
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