Purdue University Porters Diamond Theory Presentation

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Business Finance

Purdue University


Porter’s diamondtheory deals with the competitive advantages of nations.  Select two to five countries and prepare a comparative analysis of the four points of the diamond, as well as the recent roles of government and chance, in those nations.  Conclude your presentation by exploring the associated competitive advantages that may accrue to foreign firms that choose to operate in each of those countries.  A minimum of 3 references with corresponding citations throughout the essay, are required.  Citations should be on the slides where your audience can read them. 

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Explanation & Answer

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Student’s Name
Professor’s Name
Course Title

Porter’s Diamond Theory

• The competitiveness of a nation/ organization depends on its
innovation ability.
• Pressure and challenges in business are the main causes of company’s
engagement on innovation and upgrade.
• Competitiveness in a country has different patterns (Porter, 1990).

Success of Companies in International
• The best companies in the international market differ in different
perspectives and aspects.
• Successful companies employ their own special strategies.

The Diamond of National Advantage
• This theory underlines the capability of different companies.
• The reason why companies involve themselves in ruthless
improvements and innovation.
• The ability of nations to overcome barriers to innovation and
organizational change.

Porter’s Diamond Theory
• The Porter Diamond theory of National Advantage was designed by
Michael Porter.
• It helps in understanding the competitive advantages owned/
possessed by nation.
• The theory helps in explaining how the government acts as a catalyst
in National development.
• It also explains improvement of a country’s competitive advantage in
the world competitive environment.

• The features of a nation are vital for its success in the international
• The theory depicts the shape of a Diamond framework.
• The theory describes the factors that lead to success of a country’s
organization in the world market.

Determinants of the National Advantage
• They are;
1. The Factors of production
2. The demand conditions
3. The related and the supporting industries
4. The Firm, Strategy, Structure and Rivalry.

Factors of Production
• Involve the raw materials and inputs for production.
• Inputs are divided into;
a) Specialized factors
b) Advanced factors
c) Basic factors
• Endorsement with all these factors enables a country succeed in
global market.

Demand Conditions
• Demand is all about customer’s nature and size.
• Increased demand for a company’s products increased its likelihood
to succeed in global market.
• Strong demand increases the chances of improved quality in the
products produced.

Related and Supporting Industries
• These are the company’s in a county which lead in production of
certain products.
• The industries determine the fate of the other companies.
• Growth of one company leads to growth of another related one.

Organizational Strategy, Structure and Rivalry
• These vary in different countries.
• Strategy helps in goal setting.
• Structure aid in operational management.
• Rivalry aids in creativity and innovation of ideas.

Other factors
• They include; the government role and chance (Mahmud).
• The government acts as a catalyst in national success and also a
• Chance simply defines an opportunity for maximization.

Criticism/limitation of the theory
• Ignorance of the role of a country/ state.
• Ignorance of the history influence.

The four determinants- conclusion
• They can also be called d...

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