What is Porter Diamond?

Porter Diamond is a diagram created by Michael E. Porter to illustrate primary factors that affect the national advantage of the country. This diamond illustration was originally explained and published in his book The competitive advantage of nations . This book of fiction provides both details about the diamond and more examples of its use in the corporate strategy, both in the production and service industry. The elements that determine this advantage can be inherited and created. Companies that decide to take advantage of Porter Diamond to create a corporate strategy can experience increased innovation and income. Each of them applies to a different one, causing the whole structure to strengthen. When each aspect is improved, each of them is positively affected. These include natural resources, qualified work and government supervision. Companies that want to create and sell a product that requires a resource that is rare in their country can be forced to overcome this limitation through innovation. This krEativeness may include material goods and employees.

One example is a company that improves and sells oil and works in the Middle East, which would have a huge advantage on the petrol market over a company that attempts the same work in a country with limited access to oil. This second company could then choose to innovate and create fuel alternatives for gasoline, drawing on sources to which the company already has access.

6 They can either improve or damage the primary corporation through their own competitive advantage and global strategies. In an example of a company that begins to produce alternative fuel sources for cars, the related industry could include a factory that benefits components of this source, and an automatic manufacturer who decides to establish its other car around this alternative source. Strong support industryThey increase the national advantage of the country.

The last two components of Porter Diamond are the conditions of demand and strategies , which are influenced by local business circumstances. Demand conditions are used to indicate qualities on the local market on which the company operates. Companies offering high -level products tend to produce and sell them more professionally than companies that try to import them. The company producing an alternative source of cars will usually work harder to improve this technology when cars that use this new source are created and sold in the home country of this company. This company often experiences a global advantage over other manufacturers of similar fuel sources because of the attention of the product in its initial phases.

The company strategy includes all aspects of the company's internal structure and its external opponents. Business structure is often determinedovershadowed by the social conventions of the country in which it is created. For example, Japanese companies can appreciate honor and collective or team, mentality. Local rivalry can also serve to improve the quality of the produced and sold product.