PORTER’S DIAMOND

Group-7
Rajesh Singh
Naveen Kumar
Mrutunjay Kumar
Alok Pradhan
Vibhor Saxena
Outline of the presentation
• What is porter’s diamond?
It is a concept of six influences (factor
conditions, demand conditions, related and
supporting industries, industry structure &
competitions, role of chance & role of
Government) which are relevant in
determining the national competitiveness,
but it also can be used as a comparative
analysis tool in recognizing which country a
particular firm is suited to expanding into.
Theory of national competitive
advantage
The theory attempts to analyze the reasons for
a nation's success in a particular industry
Porter studied 100 industries in 10 nations for
purpose of his analysis
 The determinants of competitive advantage of a
nation were based on four major attributes
Factor endowments
Demand conditions
Related and supporting industries
Firm strategy, structure and
competitiveness
Porter’s Diamond
Success occurs where these attributes
exist.
More/greater the attribute, the higher
chance of success
The diamond is mutually reinforcing

chanc
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Govt
.
Factor endowment/ condition
Basic factors
--Natural resources
– Climate
– Geographic location
– Demographics
• Labor – technical, skilled
• Land
• Resources- Raw Materials, Machinery
• Capital- finance
• Infrastructure- core, communication etc
• Disadvantage- strategically/ location
• Advanced factors: Are the result of investment by people,
companies, government and are more likely to lead to
competitive advantage
• If a country has no basic factors, it must invest in advanced
factors
Demand conditions
Demand: Total Demand
 creates capabilities
 creates sophisticated and demanding
consumers

Demand impacts quality and innovation

Growth rate
Technology
Stages of product life cycle
 Related and supporting
industries
• No of players
• Size of clusters-Creates clusters of supporting
industries that are internationally competitive
• Technology
• R&D
• Extent
• Communication
• Networking
Firm Strategy, Structure and
Rivalry
• Management style- Long term corporate vision
is a determinant of success
• Management ‘ideology’ and structure of the
firm can either help or hurt you
• Strategy
• Innovation & risk
• Market share and investment
• Presence of domestic rivalry improves a
company’s competitiveness
Role of chance
Chance: major technological
discontinuities, wars, political decision by
foreign govt, changes in global financial
market , exchange rate,
Role of Government
Stable government
Macro Policies- FDI, Social Sector, Capital
Market , Monetary polices etc
Regulatory environment and statutory
requirement-Legal system
Others
thanks………………