Case Scenario:
Porter and a team of researchers In 1990, attempted to determine why some nations succeed and others fail in international competition. The task was to explain why a nation achieves international success in a particular industry, such as Japan in the automobile industry and Germany in the chemical industry. Porter theorizes that four factors of a nation lead to shaping the competitive advantage:
Porter's Diamond:
In 1990, Michael Porter and a team of researchers attempted to determine why some nations succeed and others fail in international competition. The task was to explain why a nation achieves international success in a particular industry, such as Japan in the automobile industry and Germany in the chemical industry.
Porter theorizes that four factors of a nation lead to shaping the competitive advantage:
1. Factor Endowments: Clearly identify the basic factors and advanced factors of the chosen industry and country: Clearly identify the demand conditions for the industry's product in the chosen country.
2. Demand Conditions: Relate to the chosen industry and country
3. Relating and Supporting Industries: Identify the related industries and supported industries that lends support to the chosen industry having national advantages and are internationally competitive.
4. Firm Strategy, Structure, and Rivalry: Clearly identify the strategy or strategies that make the chosen industry competitive. Gives an explanation of structure of firms in creating competitive advantages. Identify the domestic rivalry aspects that are competitive advantages for the chosen industry in the chosen country.
Give an example of an industry (I have 2 choices (1) the Textiles and Clothing industry or (2) IT industry) and a country (I have 2 choices (1) India or (2) Japan) and relate each of the four factors of the Diamond to this example, giving special attention to the highlighted and underline sections of the diamond above. Answer the following question in your analysis:
How has that industry succeeded or failed according to the Diamond strategy?
Please provide a conclusion section to your analysis.