Critical Review of the ‘Competitiv Advantage of a Nation’

Critical Review of the ‘Competitiv Advantage of a Nation’

  • Submitted By: Anna1984
  • Date Submitted: 11/19/2008 11:34 AM
  • Category: Business
  • Words: 1928
  • Page: 8
  • Views: 1085

Why in the international competition some nations succeed and other fail?
Is the one of most frequently asked questions in economic, because competition has become one of the most important thing of government and industry in every nation.
Everybody is wondering why for example United States is the greatest economic success of other trading nations.
They are trying to explain why Germany is very success in the home base of printing presses, chemical, cars? Why such small countries like Switzerland in the best in international pharmaceuticals, chocolate, why America is better then other countries in software, computers and movies?
This all about central concern to firms that compete in internationals markets.
A company must realise that home nation determining ability or inability to create a competitive advantage in international terms.
The theory of company value chains was developed by Michael Porter.
He did lots of research studies about competition and business structure in many different industries and then he supported the creation of called 5 forces. To evaluate a company’s position in the industry Porter with other people used his methods. This evaluation helped the companies to design products, strategy and analyze market opportunities.
Later he discovered that these methods alone were not enough to analyze how nations compete within industries.
Porter’s team did lots of research and studied a huge number of companies in different industries on the globe. All these research were documented in “The competitive Advantage of Nations”
That book analyzes 4 different dynamics of nation called The Diamond- 4 Determinants of national competitive advantage:
• Factor conditions
• Demand conditions
• Related and supporting industries
• firm strategy, structure and rivalry
Each of these determinants helps to achieve the success of a company or industry in the national context. But to achieve the success the company cannot depend or understand one...

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