Advantages And Disadvantages Of The Competitive Advantage Of Nations

754 Words4 Pages
The Competitive Advantage of Nations
Competitive advantage is a business concept which describes to us the characteristics necessary that allow an organisations to outperform its competitors. This can be achieved through many avenues such as providing consumers with greater value by either lowering prices or providing a product or services that justifies a higher cost .Prevailing attitude on this subject matter would suggest that factors like labour cost, interest and exchange rates and economies of scale are principal factors in determining national success. However, we learn from Porters article that real Competitive Advantage is developed by innovation applied to the Diamond Model or The Diamond of National Advantage, which in essence are four characteristics that both individually and as a system collectively form the Diamond of Nations. These Characteristics are: Factor conditions, demand conditions, related and supported industries firm strategy, structure and rivalry.
Factor Conditions:
This is a nation’s position on factors of production such as skilled labour force or infrastructure that is necessary in order to compete in a given industry. Porter however believes that it is important to go beyond the traditional factors of production in that the most important factors were not
…show more content…
The arrival of industry often motivates local supplies to develop and innovate in order to meet that industries production, marketing and distribution needs. Competition among local suppliers leads to lower prices and high quality products which then in turn strengths an industries competitive advantage in world markets. An example of this would be Hollywood in the film industry and its success due to the local availability of specialist input suppliers like special effect firms, casting directors, costume and set designers and stunt

More about Advantages And Disadvantages Of The Competitive Advantage Of Nations

Open Document