Answer to Question #62890 in Economics for Hadel

Question

Good Morning
I am a Business Economics Student. Today I need to know the real meaning of the Diamond of National Advantage as I have a project about. When we talk about it , should we talk about a specified country as a whole or only about a specific company ?


Thanks for your time

Answer 1

Michael Porter's National Diamond framework resulted from a study of patterns of comparative advantage among industrialized nations. It works to integrate much of Porter's previous work in his competitive five forces theory, his value chain framework as well as his theory of competitive advantage into a consolidated framework that looks at the sources of competitive advantage sourcable from the national context. It can be used both to analyze a firm's ability to function in a national market, as well as analyse a national markets ability to compete in an international market.
It recognizes four pillars of research (factor conditions, demand conditions, related and supporting industries, firm structure, strategy and rivalry) that one must undertake in analyzing the viability of a nation competing in a particular international market, but it also can be used as a comparative analysis tool in recognizing which country a particular firm is suited to expanding into.