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Porter (1990)Management > Global Marketing Management > Lectures > Independent Research > Porter > The diamond
The DiamondPorter sought to understand the fundamental reasons as to why certain countries gained particular competitive advantage. He took the dates, 1971, 1978, and 1985, and used them to measure how these advantages had changed over time. Countries each have formal and informal rules about how they manage
their firms. 1. Factor Conditions. Resources, infrastructure or skilled labour. The rate at which a country creates is more important than its stock. A country also needs a scientific/research base to continually improve, as they are more difficult to sustain and imitate. Anyone can have a skilled workforce. If a country is lacking in something, then this can stimulate it into innovative action. One example is Japan, which is known not to have many resources, but has created the “just-in-time” method of manufacturing, which is a major innovation. 2. Demand Conditions of the home country. If there is a high demand from home markets, particularly if the consumers’ tastes have become more sophisticated owing to foreign competition, then there is more pressure to innovate. This will also be the case if there are a number of domestic competitors. The larger market segments receive the most attention from the country’s biggest industries. “A nation’s companies can anticipate global trend if the nation’s values are spreading that it, if the country is exporting its values and tastes as well as its products”. US fast-food chains, which reflect the US’s desire for convenience and also the spread of these tastes round the globe. Nations spread their values and tastes through media, training foreigners, political influence and the foreign activities of their
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