preview

Porter's Framework Of Competitive Advantage

Better Essays
There are many things that make some countries consistently seek for improvements and capable of consistent innovation, Innovation is important for companies in order to achieve competitive advantage and to sustain this competitive advantage it needs to be followed with consistent improvements. Porter had made a framework to understand the competitiveness of nations and address why certain companies are always looking for more sophisticated source of competitive advantage. As porter stated a nation gain competitive advantage if its firms are competitive, a company become competitive through innovation and improvements. The Framework consist of four attributes that, they together form porter diamond of national advantage model, these attributes are: Factor condition, Demand condition, Related and supporting industries, and Strategy, structure and rivalry. These factors create the national environment where organizations compete. Each attribute affect the competitive advantage of the nation. Competitive advantage is a result for nations that create factors and then work to upgrade them. First attribute is the Factor condition, the nation creation of factors of production, natural recourses, skilled labor, Capital,…show more content…
Disadvantages in factors, for instance, will not lead to innovation except if there was intense rivalry. The diamond form a system with two elements, Domestic rivalry which promotes developments in all other factors, and geographic concentration which locate the interaction of the four factors, for example, an intense domestic rivalry will lead to formatting unique factors if the rivalry are located in the same region, moreover, domestic rivals can raise the domestic demand in a specific industry. Also domestic rivalry upgrades the formation of related and supporting
Get Access