Question

How convincing is Porter’s model of national competitive advantage in explaining the characteristic and performance of the business systems of major economies?

Answer 1

Porter's model of national competitive advantage or Porter's diamond is a model that has been designed to explain the competitive advantage that nations possess due to certain resources or factors available with them. It also explains how governments can be helpful in improving a country's position globally.

Porter argues that the elements of factor conditions are more important in determining a country's comparative advantage than naturally inherited factors such as land and natural resources. Business organizations use Porter's diamond to check situations in different countries and accordingly plan their expansion strategies as well. Analyzing the factor conditions, related and supporting industries, demand conditions of a country helps in making future decisions.