...Porter’s Diamond Theory The diamond model is an economical model developed by Michael Porter in his book The Competitive Advantage of Nations, where he published his theory of why particular industries become competitive in particular locations. Porter believes that the following factors can decide a country’s competitiveness:- * Factor conditions are human resources, physical resources, knowledge resources, capital resources and infrastructure. Specialized resources are often specific for an industry and important for its competitiveness. Specific resources can be created to compensate for factor disadvantages. * Demand conditions in the home market can help companies create a competitive advantage, when sophisticated home market buyers pressure firms to innovate faster and to create more advanced products than those of competitors. * Related and supporting industries can produce inputs that are important for innovation and internationalization. These industries provide cost-effective inputs, but they also participate in the upgrading process, thus stimulating other companies in the chain to innovate. * Firm strategy, structure and rivalry constitute the fourth determinant of competitiveness. The way in which companies are created, set goals and are managed is important for success. But the presence of intense rivalry in the home base is also important; it creates pressure to innovate in order to upgrade competitiveness. Apart from the above mentioned four...
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...Main Aspects of Porter’s Five Forces Analysis • The rivalry between existing sellers in the market. • The power exerted by the customers in the market. • The impact of the suppliers on the sellers. • The potential threat of new sellers entering the market. • The threat of substitute products becoming available in the market. Understanding the nature of each of these forces gives organizations the necessary insights to enable them to formulate the appropriate strategies to be successful in their market (Thurlby, 1998). Force 1: The Degree of Rivalry The intensity of rivalry, which is the most obvious of the five forces in an industry, helps determine the extent to which the value created by an industry will be dissipated through head-to-head competition. The most valuable contribution of Porter's “five forces” framework in this issue may be its suggestion that rivalry, while important, is only one of several forces that determine industry attractiveness. • This force is located at the centre of the diagram; • Is most likely to be high in those industries where there is a threat of substitute products; and existing power of suppliers and buyers in the market. Force 2: The Threat of Entry Both potential and existing competitors influence average industry profitability. The threat of new entrants is usually based on the market entry barriers. They can take diverse forms and are used to prevent an influx of firms into an industry whenever profits, adjusted for...
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...RELATE M. PORTER’S DIAMOND OF NATIONAL ADVANTAGE TO INTERNATIONAL BUSINESS The national home base of an organisation plays an important role in shaping the extent to which it is likely to achieve advantage on a global scale. This paper seeks to identify how national competition can help businesses compete globally, hence relating M. Porter’s ‘diamond of national advantage’ to international business. International Business comprises all commercial transactions (private and governmental, sales, investments, logistics, and transportation) that take place between two or more regions, countries and nations beyond their political boundaries. Usually, private companies undertake such transactions for profit; governments undertake them for profit and for political reasons. It refers to all those business activities which involve cross border transactions of goods, services, resources between two or more nations. The Diamond Model of M. Porter for the competitive advantage of Nations, offer a model that can help understand the comparative position of a nation in global competition, PORTER says that sustained industrial growth has hardly ever been built on basic inherited factors. Abundance of such factors may actually undermine competitive advantage! He introduces a concept called "clusters" or groups of interconnected firms, suppliers, related industries, and institutions that arise in certain locations. PORTER argued that a nation can create new advanced factor endowments...
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...In Porter’s competitive forces model, the strategic position of the firm and its strategies are determined not only by competition with its traditional direct competitors but also by four other forces in the industry’s environment one of which is customers. As the book states, a profitable company depends in large measure on its ability to attract and retain customers (while denying them to competitors). The book also states that the power of the customer grows if they can switch between competing products or if they can cause companies to compete on price alone in a transparent market. This is where technology has given a lot of power back to the customer. The books used the example of used books online and how there are multiple suppliers for just about any college book your looking for which in turn means the consumer can easily take business elsewhere if the price of the product does not sub-come to their liking. With that being said technology has as been able to been companies in only the same manner. Take sale phone for example: Apple comes out with a new phone almost every couple of years like clockwork. Why is this? To keep up with what their consumer base is asking for, they do this because they understand that the consumer is fickle with there brand loyalty now of days (due in part thanks to the internet) because there are so many other produces out there and consumers have been given the ability to express there likes and dislikes on a world wide level (which can...
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...Porter’s Five Forces Model The below framework analyzes the level of competition within the investment banking industry and the competitive advantage of Mayberry Ltd. within. Availability of Substitutes Availability of Substitutes Bargaining Power of Suppliers Bargaining Power of Suppliers Bargaining Power of Buyers Bargaining Power of Buyers Rivalry among Competitors in the Investment Banking Rivalry among Competitors in the Investment Banking Threat of New Entrants Threat of New Entrants Threat of other Shareholders Threat of other Shareholders Competitive Force | Risk | Rationale | * Threat of New Entrants | Low | To operate in the banking and investing industry in Jamaica, there are a number of regulations which the company must be in line with along with the requisite license and certification. This places a low risk of potential new entrants into the industry. | * Bargaining Power of Suppliers | High | The company’s main source of investment opportunities comes from BOJ. With the control that the government has over its debt exposure and the numerous government trade regulations, the risk of supplier’s bargaining power is very high within this industry. | * Bargaining Power of Buyers | Medium | Within the investment industry, buyers do have the power to negotiate the prices given that they can choose amongst a wide variety of competitors with which to invest. This reduces the power of the market players given that they also seek to...
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...Case study on | Strategic Analysis | Of Dell Inc. | | mujeeb | [Pick the date] | | Introduction: The purpose of this report is to analyze the strategic position of Dell Inc. Headquarter in Round Rock, Texas; Dell computer was founded in 1984 by Michael Dell who was then an undergraduate student at the University of Texas. From very inception the company is providing superior value to its target market by providing latest technology at competitive prices around the world. Dell is cited as the largest player of the personal computer market. The company follows unique selling policy that is known as Dell Model—selling computers and other equipments directly to customer and build-to-order strategy thereby eliminating the intermediary margins and inventory costs. The mission statement of Dell has been divided into three parts customer satisfaction that states “We are an established company striving to satisfy customers by meeting their demands of quality, responsiveness, and competitive pricing. Each customer is #1” , team satisfaction that states, “Management and employees are committed to cooperating as a team for the purpose of profitability and gratification of a job well done” and community satisfaction “We will provide jobs in a clean, safe, environmentally sound atmosphere and be an active participant in community affairs” (Dell, 2010). 1. External Analysis: The primary industry of Dell is personal computer and computer equipments that are evolving...
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...PANGO CASE REVIEWED Sobal J, Stunkard AJ: Socioeconomic status and obesity: a review of the literature. Psychol Bull 1989, 105:260-275 Danielzik S, Czerwinski-Mast M, Langnase K, Dilba B, Muller MJ: Parental overweight, socioeconomic status, and high birth weight are the major determinants of overweight and obesity in 5–7 year old children: baseline data of the kiel obesity prevention (KOPS). Int J Obes Relat Metab Disord 2004, 28:1494-1502 Zhao Y, Wang SF, Mu M, Sheng J: Birth weight and overweight/obesity in adults: a meta-analysis. Eur J Pediatr 2012, 171:1737-1746 BACKGROUND OF THE STUDY The study was all about escalating numbers of children affected with overweight and obesity. This study set out firstly to examine the effect of socioeconomic background on the relationship between height SDS and three measures of obesity, and secondly to determine the relationship between high birth weight and obesity in children. The aim of this study is to explore the interactions between SES, height and obesity and test the hypothesis that the height-obesity association is greater in school-age children from a high socioeconomic background. It also explores the relationship between high birth weight and overweight/obesity. PARTICIPANTS A total of 557 participants, 173 from rural and 384 from urban of ages 5 to 12 years and were recruited from both private and public schools selected at random which are school children in the North West Region of Cameroon. Socioeconomic...
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...the concept that there are five forces which ascertain the competitive intensity of the market (Porter, 2008). Figure 1.1 shows a diagram of the five forces model, (Flesicher, 2007) Porter’s five forces model is quite useful and it provides a number of benefits , its most contribution is that it's a relevant tool to help organizations find the fundamental structuring components of their given business operation. It is the map showing where the company is and where they hope or want to be (Flesicher, 2007).Further more Schmidt (p.82, 2010) adds that “The model help to identify where the power is in the present business situation, This is important both in understanding the might of a company’s current competitive situation and the power of a position that the company wants to move to.”By understanding where the intensity is, the model can be used to identify the areas of strength, to improve failings and prevent mistakes; also strategic analysts often use the theory to know if new products or services are potentially profitable (Roy, 2011). The five forces model is a tool for analysising the competitive environment as Henry (p.70, 2008) states that “It allows an organization to determine the attractiveness or profit potential of a given market by examining the interaction of the Porter’s five forces .” it’s the altogether power of these five forces that eventually determines an organization’s return on investment or the profit potential within a given market. Porter (2008)...
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...Michael Porter’s theory on National Competitive Advantage, is the best theory to utilize when an internationalising firm wants to select one country over another for new entry The globalization has become a ubiquitous and potent symbol of the age since the early 1980s. The term globalization was used to describe strengthening interactions of people from various countries, which resulted from the emergency of numerous new technologies (Daniel, Radenbaugh & Sullivan, 2002). As the popularization of globalization, more firms prefer to enter the emerging markets, like China, to search for the higher return. However, resulted from the studies segment, there is not an exact theory or study can be regarded as guidelines for these internationalizing firms. Overall, Michael Porter’s theory on national completive advantage is a better theory to be adopted by the international firms which want to select a better country for new entry. The dominance of Porter’s theory are its comprehensiveness, the dynamic Diamond theoretical system and analysis form both inductive and deductive sides. Meanwhile, it is at a disadvantage in its assumption. Thus, this essay will explore both sides of Porter’s theory. Porter's model includes four key elements. The Diamond model is depicted as figure 1, where the four forces jointly constitute a firm's global competitiveness in a given industry ( Porter,1990) Source: Porter (1990) The Competitive Advantage of Nations. The first element...
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...In the following document I will be discussing the Porter’s five-force model and how it is used in order to develop an international strategy. As with any group that forms with a common goal, any organization that wishes to be successful must have a strategy in place that guides the different functional aspects of the organization not only as a whole, but at a granular level. Organizations that perform business, especially on a global scale, create a plan that defines what the organization will accomplish in the next year or more along with directions and responsibilities for each part of the organization. In developing the strategic plan, the team must take into account multiple perspectives, approaches, the nature and complexity of the organization, and team expertise in order to have the best impact in the end result desired (McNamara, C., n.d.). As the result of the organization’s end result will be dependant on many external forces, a model was created by Michael Porter in order to define these forces and how they change according to the current environment. In the interest of having an advantage over its competitors, all organizations should be familiar with Mr. Porter’s five force model. Porter defined five forces that affect the profitability; these forces define the rivalry that will be experienced by the organization when conducting business. One of these forces, the degree of rivalry is influenced by factors such as how much product is available on the market,...
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...Essays By Mashell Chapeyama Porter’s five forces Effectiveness of generic strategies The study of strategic management is quite stimulating. It gives a person insight in a lot of leadership and managerial roles. One such aspect I have come across is that of generic strategies. This has been quite stimulating to me as it relates to some questions I have had in the past. The question related to the effectiveness of applying human resources systems and strategies across many companies in various continents. After a long time of studying such a scenario, I concluded that having human resources systems that are used the world over would not be effective because of the diverse cultures that are found in the world. But in some field such as accounting there are standards that are applied world over. So what about generic strategies? Can these really be effective across industries, across continents and in varying business sizes and scope? This essay will answer these questions in a very simple way. The first thing to understand is what a generic strategy is. Generic strategy refers to the use of predetermined strategy, based on some basic principles and assumptions, that if applied would lead to business success. A generic strategy is an outline of what a firm must or can do so as to be successful, disrespectful of the industry or nature of business of that firm. The question is could all industries and firms be able to use prescriptions of a generic strategy and be successful...
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...The Porter's Five Forces Tool The Porter's Five Forces tool is a simple but powerful tool for understanding where power lies in a business situation. This is useful, because it helps to understand both the strength of any organization’s current competitive position, and the strength of a position that the organization considering moving into. With a clear understanding of where power lies, organizations can take fair advantage of a situation of strength, improve a situation of weakness, and avoid taking wrong steps. This makes it an important part of organization’s planning toolkit. Conventionally, the tool is used to identify whether new products, services or businesses have the potential to be profitable. However, it can be very illuminating when used to understand the balance of power in other situations. Porter's 5 Forces are named after Michael E. Porter, this model identifies and analyzes 5 competitive forces that shape every industry, and helps determine an industry's weaknesses and strengths. The forces are, 1. Competition in the industry 2. Potential of New Entrants into Industry 3. Power of Suppliers 4. Power of Buyers 5. Threat of Substitute Products Readymade Garments(RMG) Industry of Bangladesh Bangladesh, the southern Asian country has a population of approximately 164 million people. The economy of Bangladesh is significantly dependent on agriculture. But it’s a great news for the country that, readymade garments (RMG) sector of Bangladesh...
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...Porter’s Generic Strategies Porter’s notion on “stuck in the middle” or “hole in the wall” is debatable, it being mutually exclusive. It might be true in some cases but not all the time. Even beyond Porter’s generic strategies, Toyota has been operating and already proven that it’s possible to be a low cost producer of a differentiated product. It was able to achieve leadership in North America, surpassing General Motors. They continuously find ways to reduce production costs and at the same optimize its process so that it could introduce new models faster than its competitors. They’re known for their Toyota Production System (TPS) which other vehicular companies were trying to mimic. This TPS is the main reason why there’s Just-In-Time (JIT) and Lean Manufacturing system in the manufacturing industry today. Toyota used these two manufacturing methods to gain competitive advantage over competitors. In JIT, Toyota build vehicles based on immediate market demands rather than anticipation on future market demands. There’s no overstocking. This strategy results in efficiency and quality. It is mentioned above that cost leadership gains competitive advantage through efficiency while differentiation gains its competitive advantage through quality. This is a proof that cost leadership and differentiation are not mutually exclusive. And so is true with Lean Manufacturing. Its concept is eliminating those processes that will not add value (differentiation) to the product that a customer...
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...Porter’s 5 Forces The ability rivalry has worked to enable the English Premier League to become one of the top clubs within the world and Europe, in order to attract the finest players worldwide. Strategy We aim to increase our revenue and profitability by expanding our high growth businesses that leverage our global community and marketing infrastructure. The key elements of our strategy are: * Expand our portfolio of global and regional sponsors: We are well positioned to continue to secure sponsorships with leading brands. Over the last few years, we have implemented a proactive approach to identifying, securing and supporting sponsors. In addition, we are focused on expanding a regional sponsorship model, segmenting new opportunities by product category and territory. As part of this strategy, we have opened an office in Asia and are in the process of opening an office in North America. These are in addition to our London and Manchester offices. * Further develop our retail, merchandising, apparel & product licensing business: We will focus on growing this business on a global basis by increasing our product range and improving distribution through further development of our wholesale, retail and e-commerce channels. Manchester United branded retail locations have opened in Singapore, Macau, India and Thailand, and we plan to expand our global retail footprint over the next several years. In addition, we will also invest to expand our portfolio of product...
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... * Health Care Foot reflexology rollers, pulse massagers, hand-held massagers, eye massagers, massaging hairbrushes, hot and cold gel packs, mechanical rotary toothbrushes and hearing aids fall under healthcare products. * Health Check The Group markets a range of diagnostic equipment like blood pressure monitors, pedometers, electronic weight and height measuring machines, digital thermometers and ear scan thermometers. OSIM also plans to market posters, literature, music compact discs and tapes on the theme of health and healthy living to provide a total health experience to customers. Question 2 Vission-The global leader in healthy lifestyle products. Mission-Bringing healthy lifestyle to you. Question 3 Question 4 Porter’s Theory | Factors elements that impact the company profit | Action could be take | Threat of new competition | 1) Natural barriers to entry in the global home health care industry include the need for capital investment, human resources, and technology and the importance of economies of scale. It also includes the role of contracting costs avoided by a close relationship between the vendor and its client, which in turn is related to the avoidance of opportunistic behaviour by either party. | | Threat of substitute product or services | | | Intensity of competitive rivalry | | | Bargaining power of customer | | | Bargaining...
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