Diamond Model of national advantage

E718427

The Diamond Model of national advantage is Michael Porter's framework that explains how a nation's competitive success in particular industries arises from the interaction of factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry.

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Statements (49)

Predicate Object
instanceOf competitive advantage framework
economic theory
international business framework
strategic management model
aimsTo explain why certain nations succeed in particular industries
alsoKnownAs Porter Diamond NERFINISHED
Porter’s Diamond Model NERFINISHED
appliesTo export competitiveness
international trade
location advantages of nations
assumes firms compete internationally through innovation and upgrading
author Michael E. Porter NERFINISHED
contrastsWith classical trade theories
comparative advantage based solely on factor endowments
critiquedFor limited applicability to developing countries
underestimating role of multinational enterprises’ internal networks
describedIn The Competitive Advantage of Nations NERFINISHED
emphasizes dynamic competition
innovation
interaction of national conditions
explains national competitive advantage in specific industries
field economic geography
international economics
strategic management
focusesOn industry-level competitiveness
hasAdditionalInfluence chance
government
hasComponent demand conditions
factor conditions
firm strategy, structure, and rivalry
related and supporting industries
hasDeterminant demand conditions
factor conditions
firm strategy, structure, and rivalry
related and supporting industries
hasShape diamond
influenced national competitiveness policies
influencedBy observations of successful national industries
publicationYear 1990
relatedTo cluster theory
national innovation systems
states national environment shapes firm competitive advantage
usedBy consultants
governments
multinational enterprises
usedIn cluster analysis
economic policy analysis
international business strategy
visualizedAs four interrelated determinants arranged in a diamond

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Michael Porter knownFor Diamond Model of national advantage