![]() One internationally successful industry may lead to advantages in other related or supporting industries. A good example is the discussion on the ethics of genetic engineering and cloning that will influence knowledge capital in this field in North America and Europe. Political initiatives, technological progress or socio-cultural changes, for instance, may shape national factor conditions. Porter points out that these factors are not necessarily nature-made or inherited. This explains the existence of so-called lowcost-countries (low costs of labor), agricultural countries (large countries with fertile soil), or the start-up culture in the United States (well developed venture capital market). Each country has its own particular set of factor conditions hence, in each country will develop those industries for which the particular set of factor conditions is optimal. These national factors often provide initial advantages, which are subsequently built upon. ![]() They also include factors like quality of research on universities, deregulation of labor markets, or liquidity of national stock markets. These factors can be grouped into human resources (qualification level, cost of labor, commitment etc.), material resources (natural resources, vegetation, space etc.), knowledge resources, capital resources, and infrastructure. The situation in a country regarding production factors, like skilled labor, infrastructure, etc., which are relevant for competition in particular industries. This home base provides basic factors, which support or hinder organizations from building advantages in global competition. It suggests that the national home base of an organization plays an important role in shaping the extent to which it is likely to achieve advantage on a global scale. This model of determining factors of national advantage has become known as Porters Diamond. Michael Porter introduced a model that allows analyzing why some nations are more competitive than others are, and why some industries within nations are more competitive than others are, in his book The Competitive Advantage of Nations. Information technology is reinforcing this trend. Even if an organization does not plan to import or to export directly, management has to look at an international business environment, in which actions of competitors, buyers, sellers, new entrants of providers of substitutes may influence the domestic market. Increasingly, corporate strategies have to be seen in a global context. Last updated on November 24th, 2019 at 11:37 am
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |