The double diamond model economics essay

These interlinked advanced factors for Competitive Advantage for countries or regions in Porters Diamond framework are: Related Supporting Industries Spatial proximity of upstream or downstream industries facilitates the exchange of information and promotes a continuous exchange of ideas and innovations 4.

Using this matrix shows that if BHP converts its new businesses from "question marks' to "stars', without creating "dogs', this will lead to rapid growth.

Porter’s Diamond Theory of National Advantage

Because these factor endowments can hardly be influenced, this fits in a rather passive inherited view towards national economic opportunity. Micheal Porter gave the diamond theory of national advantage, which states that the features of home country are crucial for the success of an organization in the international markets.

Toyota Motor Corporation is the world largest car company seated in Tokyo, Japan. They have done this by appointing a network of regional corporate representatives and a corporate general manager, international.

All of these criteria would have scored highly. This theory is called the diamond theory, as it is depicted in the shape of a diamond framework. As a rule Competitive Advantage of nations has been the outcome of 4 interlinked advanced factors and activities in and between companies in these clusters.

This model can also be used for other major geographic regions. The scores for each determinant of all three diamonds are summarized in Table 5.

Varies from country to country. BMW, Mercedes-Benz and Audi would not be such successful brands if they did not have to compete against each other. For the international size of demand, I use market size as variable. For example, Japan has developed a competitive global economic presence beyond the country's inherent resources, in part by producing a very high number of engineers that have helped drive technological innovation by Japanese industries.

However, also the presence of intense rivalry makes companies competitive: All of these changes are designed to facilitate international growth, in an entrepreneurial way, without jeopardising the traditional operating divisions, or "cash cows' as in the BCG matrix shown in figure 3.

Both are leading car companies concerning future technologies. As Japan has the higher amount with 3. Demand conditions Demand conditions, located in the right-hand box of the Porter Diamond model, involve such factors as early home demand, market size, market growth and sophistication.

Information asymmetries between management on one side and owners, workers, unions, customers and competitors on the other are resolved through these respective markets. They must encourage companies to raise their performance, stimulate early demand for advanced products, focus on specialized factor creation and to stimulate local rivalry by limiting direct cooperation and enforcing anti-trust regulations.

For example, South Korea lacks natural resources, but have specialized engineers. The basic factors to carry out a business include natural resources and labor; whereas, advanced factors include infrastructure, such as communication systems.

Japan is stronger in information and communication technologies, Germany strikes in physical infrastructure. Porter introduced this model in his book: These four determinants can also be called as the dimensions of the diamond model that help in contributing to the national advantage.

For instance, the growth and development of the automobile industry would enhance the growth opportunities of the steel industry. Diversification of markets is explained through the ratio of numbers of countries of sales over the two year average of total export amount.

Power is an independent group, drawing on the skills of the Mining and Petroleum divisions where necessary. The government of a country can either promote or hinder export.

Determining the other corners of the diamond Toyota performs better. These characteristics can help companies create competitive advantage, for instance when sophisticated home market buyers pressure firms to innovate faster and to create more advanced products than those of foreign competitors.

In this paper, there would be an evaluation of the usefulness of Michael Porter’s Diamond model as a tool for analysis by international business managers in strategic decision-making. There would be specification of the kind of strategic decisions that international business managers will make using Porter’s Diamond model.

Essay Lucent Technologies BACKGROUND InAT&T decided to split into three different companies. These new companies were the new AT&T, NCR, and Lucent Technologies. Lucent Technologies is one of the leading designers, developers, and manufacturers of telecommunications systems, software, and products.1 They are beginning to emerge as a Fortune 40 company.

Rugman and Verbeke () adapted the double diamond framework to a generalized double diamond which works well for analysing all small economies. the generalized double diamond model (Moon et al. / International Business Review 7 () – economy.

Porter Diamond

). ). Rugman A M Dcruz J R The double diamond model of international from BBA at North South University. Find Study Resources. Main Menu; Essay. Uploaded By Mahiyan. Pages 8 Ratings. % TAGS Economics, International Trade, %(1). Category: Economics; Title: Porter's Diamond Model.

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. The German Model in the face of globalization - Ralf Segeth - Essay - Economics - Case Scenarios - Publish your bachelor's or master's thesis, dissertation, term paper or essay.

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The double diamond model economics essay
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Summary of Diamond model - Michael Porter. Abstract