You will prepare and submit a term paper on Porter’s Diamond of National Competitiveness. Your paper should be a minimum of 2250 words in length. Porter’s arguments on factor conditions go to the other extreme as well. He suggests that a lack of resources would not act as a hindrance to development, e.g. Switzerland. His demand conditions are equally loaded with such positivities as a sophisticated domestic market and its implications in guaranteeing a competitive edge in international markets to the country concerned, e.g. the wine industry of France. His related and supporting industries argument parenthetically emphasizes the technology-related benefits (Rao, & Holt, 2005). The spill-over effects of main industries lead to the creation of supporting industries and next to the cyclical effect goes on and on to bring about a very positive outcome in competitive advantage, e.g. Italy’s leather shoe industry. Finally, his firm strategy, structure, and rivalry related posture focuses on capital markets, individuals’ career choices, management structures and strategic competitive environment in domestic markets.
Competitive advantage in international trade is defined as “the nation’s capacity to entice firms (both local and foreign) to use the country as a platform from which to conduct business” (Paulson, & Wilber, 2002). The sectoral strength/weakness analysis of a nation’s economy to determine competitive advantage in international trade by Porter is a revolutionary idea that gathered some more momentum during the post-1998 period. While many economists have doubted the efficacy of Porter’s conceptual framework of the “diamond of national competitiveness” basically owing to its many shortcomings in structural coherence, others agree that .its theoretical underpinnings have stronger relevance to modern international trade context.
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