I need help creating a thesis and an outline on Porter’s Diamond. Prepare this assignment according to the guidelines found in the APA Style Guide. An abstract is required. The importance of a nation in competitiveness can be better appreciated when we understand that the external environments have a decisive role in defining the company strategy. These factors described as the five forces by Porter (1985) and improved upon with a sixth force by Wheelen and Hunger (2002), amply demonstrate that a company has to adapt itself to these external factors as it cannot control them. To this add the PESTEL factors that are even more dominant in determining policy and strategies that impact the company. Looking at the larger perspective, the competencies of the nation overshadow the competencies of the individual company that necessarily has to factor in these environments to devise its own strategy. Although it is possible that some exceptional venture can defy this logic, yet this is the substantial fact that cannot be denied. It is these national competencies that are the drivers of the competitive advantage of the companies of that nation in varying degrees according to their own individual competencies.
Let us define competencies further. When products or services are rare, have value, are difficult to imitate and the institutions of the state are capable of managing these competencies, competitive advantage is established on a national scale. On the individual scale the first three criteria remain the same but the fourth institution is replaced by skilled managers and workers who have the ability to use the other three factors to develop a competitive edge over rivals.
Mercantilism is a 16th century theory that symbolizes gold as wealth and propagates that exports should be subsidized to meet competition and imports should be penalized with tariffs to protect the home industry. This severely limits the benefits and is a zero-sum game. .
The Absolute advantage theory was originated by Adam Smith, the father of modern Economics, and he proposed that one should produce in a place where one can be most efficient and should trade where production is marked by inefficiency.
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