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The concept of "Competitive Advantage of Nations" was popularized by economist Michael Porter in his book "The Competitive Advantage of Nations" published in 1990. Porter's theory suggests that the competitiveness of a nation is influenced by a combination of factors that go beyond just a company's competitive advantage. These factors can create a favorable or unfavorable environment for businesses operating within that nation. Here are some key elements of competitive advantage at the national level:
Factor Conditions: This refers to a nation's endowment of factors of production, including Natural Resources, human resources (such as labor and skills), capital, and infrastructure. The quality and availability of these factors can impact a nation's competitive advantage.
Demand Conditions: The nature and size of the domestic market can influence a nation's competitiveness. A strong, sophisticated, and demanding domestic market can encourage companies to innovate and improve their products and services.
Related and Supporting Industries: The presence of strong, competitive industries in related or supporting sectors can benefit a nation's overall competitiveness. These industries can provide a supportive ecosystem, including suppliers, service providers, and infrastructure.
Firm Strategy, Structure, and Rivalry: The way companies are organized and compete within a nation can affect their ability to innovate and improve. Intense domestic competition can encourage companies to be more innovative and efficient.
Government Policies and Actions: Government policies, regulations, and actions can significantly impact a nation's competitiveness. Supportive policies, investments in education and infrastructure, and effective regulation can enhance competitiveness.
Chance: External events, such as technological breakthroughs, economic crises, or natural disasters, can have a significant impact on a nation's competitiveness. Being able to adapt to these chance events is important.
National Culture: Cultural factors, including attitudes toward risk, entrepreneurship, and work ethics, can influence a nation's competitiveness. A culture that values innovation and entrepreneurship can be a competitive advantage.
Innovation and Technology: The level of investment in research and development, as well as a nation's capacity for innovation and technological advancement, is critical for maintaining competitiveness in industries that rely on innovation.
Infrastructure: The quality and availability of infrastructure, including transportation, communication, and energy, are essential for efficient business operations and can be a competitive advantage.
Education and Workforce: The level of education and skills of the workforce can affect a nation's ability to compete in industries that require advanced knowledge and expertise.
Porter's theory suggests that a nation's competitive advantage is not solely determined by individual companies or industries but is influenced by a complex interplay of these factors. Governments, industries, and other stakeholders can work together to create a favorable environment that fosters competitiveness on a national level. Understanding and leveraging these elements can help nations enhance their competitive advantage in the global economy.
mankapil734
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∙ 14y agodescribes how nations acquire international trade advantages by developing specific skills, technologies, and industries.
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What is the meaning of Michael porter's diamond which he presented in his 1990 book the competitive advantage of nations?
good show
How can a company create a competitive advantage?
The best way that a company can create a competitive advantage would be to differ in what services they provide compared to similar companies. This gives them an edge and will draw in more customers by having this advantage.
How can coca cola gain competitive advantage in marketing?
This question is not precise enough. What is a competitive advantage in marketing? Economies of scale? Getting the right message across that captures the customer?
How companies differentiate and position their products for maximum competitive advantage Answer?
the companies differentiate and position their products as a competitive advantage through products,product packing,pricing,after sales services.
How information can help an organization gain competitive advantage?
it can't.
Competitive advantage of nations and its implications of implications on international business?
When businesses have a competitive advantage, then others will look to them to perform the work in international business. This will help improve the economies of developing nations.
What is the meaning of Michael porter's diamond which he presented in his 1990 book the competitive advantage of nations?
good show
Where does competitive advantage come from?
Competitive advantage can come from products, employees and operations. When a firm has a competitive advantage, they are able to operate as a leader within their industry.
What is the Competitive advantage of GM?
Differentiation advantage
What does competitive advantage mean and what is one means of identifying?
A competitive advantage is something that allows one company to outperform competitors. One way to identify a competitive advantage is comparing profits. If one competitor has higher average profits, then it has some kind of competitive advantage.
What is mean by fit drives both competitive advantage and sustainability?
fit drives both competitive advantage and sustainability?
How and why did Outsourcing originate?
The idea of outsourcing started with Adam Smith's book " The Wealth of Nations " where competitive advantage is discussed, on how wealthier nations can cut down costs by hiring cheaper labor in less developed countries.
What does competitive advantage have to do with strategic planning?
Competitive Advantage is vital to Strategic planning. Strategic planning identifies strengths and weaknesses and visions and missions for the future. Competitive advantage relys on the benefits of the companies strengths and act upon them to turn them into competitive advantage. Other firms can't duplicate strategy or competivness that they don't have.
What are the Building blocks of competitive advantage?
1- Efficiency 2- Quality 3- Innovation 4- Customer responsiveness = Competitive advantage
How do E-business and IT help organizations in achieving sustainable competitive advantage?
e-business and IT help organizations in achieving sustainable competitive advantage?
What is Pepsi's competitive advantage?
According to statistics, in 2010, Pepsi had 11.5% of the global soft drink market.
What are the sources of the firm's market power?
The source of a firm's market power is its competitive advantage. When a business has a competitive advantage they can use that to make significant changes in the industry.
