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Chilean Wine Industry

In: Business and Management

Submitted By rmarley20
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Chilean Wine Industry’s National Competitiveness
Using Porters National Diamond.
Part 1:
Porters National Diamond model is used to analyse a firm’s ability to compete in a home market, their ability to compete in a foreign international market and to recognise the particular country and market within that, which a firm would be suited to expanding into. In doing so it analyses the viability of a nation to compete in any given market. The model is described by Ozlem Oz (1999) as “a dynamic system which all elements interact and reinforce each other”. The elements to which this refers are; Factor Conditions, Demand Conditions, Firm Strategy, Structure and Rivalry, and Related and Supporting Industries. These main elements are supplemented with Political and Chance factors which influence all of them. The model explains the relationship between related industries and how this helps successful development. Porter believed that a healthy competition would drive the firms to be innovative. With a competitive market, people have more choice and this provides great market research availability to find out what people want.

Fig.1, Michael Porter, Porter’s National Diamond (1990)
Throughout this report an analysis of the Chilean wine industry’s competitiveness at an international level will be carried out. Care will also be taken when considering how well the company in question will be suited to expanding into this market. The diagram above, figure 1, displays Porters National Diamond which will be the main focus for the analysis.

Figure 2 shown below shows Porter’s National Diamond adapted to suit the Chilean wine industry.

Fig.2 (Ayala, 2013)
Chile has a market-oriented economy characterized by a high level of foreign trade and a reputation for strong financial institutions and sound policy. According to the CIA World...

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