Michael Porter’s Diamond Model
ADMS1010 – Summer 2012 – Troy Young
Reading – Porter Diamond – May 10 2012
- Porter's diamond model suggests that there are inherent reasons why some
nations, and industries within nations, are more competitive than others on a
global scale - the argument is that the national home base of an organization
provides organizations with specific factors, which will potentially create
competitive advantages on a global scale.
Four Determinants of National Advantage
- Factor conditions
o Includes factors that can be exploited by companies in a given nation.
o Can be seen as advantageous factors found within a country that are
subsequently build upon by companies to more advanced factors of
o Factors not usually seen as advantageous, such as workforce shortage,
can also be seen as a factor potentially strengthening competitiveness,
because this factor may heighten companies’ focus on automation and
o Example factor conditions:
Highly skilled workforce.
Linguistic abilities of workforce.
Rich amount of raw materials.
- Demand conditions
o If the local market for a product is larger and more demanding at home
than in foreign markets, local firms potentially put more emphasis on
improvements than foreign companies.
This will potentially increase the global competitiveness of local
o A more demanding home