Diamond Model of Porter Essay Example | Topics and Well Written Essays - 2250 words - 11

Diamond Model of Porter - Essay Example This paper illustrates that Porter was able to introduce the diamond model of national competitive advantage for purposes of providing an explanation on the reasons which make a number of countries to be more competitive, in comparison to other countries. Furthermore, this model was introduced for purposes of providing an explanation of the reasons that make a variety of business systems within a particular economy to be more competitive. This model, developed by Porter gives a proposal that the national home base of a given industry plays a crucial task in achieving a competitive advantage on a wide scale. This home base, of the given industry, would make a contribution on some essential factors that will help in supporting the business systems within the industry, to build an effective and efficient strategy that can help them compete efficiently on a global perspective. Porter manages to identify four major determinants that play a role in making a country to achieve a national co mpetitive advantage. He thereafter makes a conclusion that by combining these four determinants within a given economy or country, then, they would provide a big influence on the competitive ability of the business systems that are located within the economy under consideration. In defending his points, Porter explains that a competitive industry would take the nature of a specialized cluster of industries that are found at home. These clusters are able to correlate with each other through vertical relations. Examples include managing to integrate with suppliers. Clusters are also able to correlate with each other, through horizontal relations. Horizontal relationships normally occur through distribution channels, technology, skills, and customers. Through these specialized clusters, Porter explains that a given economy would manage to develop a business system that has the capability of achieving a competitive advantage over its rivals, hence leading to economic success. The automo bile industry of Japan and the semiconductor industry of United States to the diamond model of Porter.