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The Porter Diamond model is a strategic economic model that attempts to explain why one nation-state is more successful than another for a particular industry. According to the model, for an industry to have a national competitive advantage, four determinant factors must be present. These four factors are: Factor conditions; Demand conditions pink diamond models. likes. pink diamond models is a bbw/ssbbw modeling company and magazine. an online modeling group @ChadDiamondX
WhatsApp Group Invite. This information can then explain the relative strength of one business against another.
It also explains why some industries are more advantageous than others in a particular region. In the Diamond Model, the answers to these questions are the determinants of competitive advantage.
According to the model, there are four factors that determine national competitive advantage. Porter represented these four determinants as a diamond. You can think of the four determinants as being the playing field for the industries of a particular nation.
The four determinants are:. These are the major determinants in the model, but they are not the only ones.
The model also shows that there are two extra determinants that can influence any or all of the four determinants. Factor conditions refer to the different types of resources that may or may not be present within a nation.
Resources include such things as human resources, capital resources, natural resources, infrastructure, and knowledge resources. To understand the role of factor conditions we need to distinguish between basic and advanced factor conditions. Basic factors include natural resources and unskilled labor.
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Advanced factors include skilled labor, specialist knowledge, and capital, amongst others. Porter argues that basic factors do not generate competitive advantage as they can be obtained by any company.
Only advanced factor conditions can generate competitive advantage. As an example of an advanced factor, MIT produces graduates with very high computing skills.
This, in turn, feeds a software competitive advantage for the United States. Another advanced factor for the US is having a large pool of venture capital seeking to invest in technology startups.
This further builds competitive advantage in this industry. The main factor of demand conditions is home market demand. To have a competitive advantage for an industry there must be a strong home market demand for the product or service.
In fact, the more demanding home market customers are, the greater the pressure on companies to innovate and improve.