...The diamond model by Michael Porter 3 1.1 Introduction 3 1.2 Diamond model Theory 4 1.2.1 Factor Condition 4 1.2.2 Demand conditions 5 1.2.3 Firm strategy, structure and rivalry 5 1.2.4 Related and supported industries 6 1.2.5 The role of Government 6 1.3 Criticism of the framework 7 1.4 Practical Example 7 1.5 Conclusion 8 1 2 3 4 5 6 7 8 9 1. The diamond model by Michael Porter 1 1.1 Introduction According to Recklies (2001), increasingly corporate strategies have to be seen in global context and even if an organization does not plan to import or to export has to look at an international business environment, in which actions of competitors, buyers, sellers, new entrants of providers of substitutes may influence the domestic market and information technology has been reinforcing this trend. The classical models and theories related to international trade before Michael Porter’s Diamond theory, mainly proposed that the comparative advantage resides in the factors endowments that a country may be fortunate enough to inherit and these factors mainly consisted of land, natural resources, labour and the size of the local population but Porter argued though his diamond model that a nation can create new advanced factor endowments such as skilled labor, a strong technology and knowledge and knowledge base, government support and culture, in short Porter used a diamond shaped...
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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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...discussions', 'critical discussions'] - “The contribution by Porter (1990) on the competitive advantage of nations has led to an extensive discussion among academics and practitioners on the sources of international competitiveness (Grant, 1991; Gray, 1991). However, in order to understand why so much emphasis is placed on the diamond framework in the management literature, this essay will discuss Porter’s concept of the Diamond and the factors that contribute to the development of national competitive advantage. This paper will begin with a theoretical approach followed by the reception of different authors and schools of thoughts who disagreed with his management thinking, and then goes on to consider empirical issues which have arisen subsequently, followed by a conclusion.” Theoretical Discussions (explain the 'main theory' [such as 'Late/Early industrialization', 'Managerial enterprise', 'Weber's theory about impacts of culture'] in this question) - “Porter’s theory of national competitive advantage is based upon a study of the characteristics of the national environment which identifies four sets of variables, and an additional two, which influences a company’s ability to establish and maintain competitive advantage within international markets. These interacting determinants are: factor conditions; demand conditions; related and supporting industries; and firm strategy, structure and rivalry and form what Porter refers to as the “national diamond.” The four main...
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...Creating Shared Value. (Michael E. Porter & Mark R. Kramer) * What is your reaction to this article? Critically evaluate its content based on your personal and professional experiences and any additional research you might like to do. The article starts with a description of the cynicism surrounding capitalism and management, and also some of the reasons for such cynicism. My life’s first attitude towards capitalism and management was also marked by distrust and skepticism. I grew up in a small town that is surrounded by big factories that manufactured products such as steel, cement, flour and so on. Our town was victim of companies’ strategy to relocate their production plants where labor was cheaper. Article provides three concrete steps that management can take to achieving what they have dubbed as Shared Value, which is an attempt to meld together societal and economic progress, so that it creates societal value for the community in terms of making relevant contributions to their social realities, but not at the expense of economic value to the business. The three steps are as follows: 1) Reconceiving products and markets; 2) Redefining productivity in the value chain; and 3) Enabling local cluster development. In brief, reconceiving products and markets entails meeting needs in often underserved markets through redesigning products and/or distribution methods. The authors cite microfinance as an...
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...opportunities. Correspondingly, concepts like this also provide insightful information for explaining the location choices which organisations have already made. One such framework is the so called Diamond Model introduced by Michael Porter in 1990. This essay tries to determine its advantages and disadvantages as a tool for the examination of firm‟s home and host location decisions by focusing on two major MNEs: the world‟s second-largest high-street retailer –French Carrefour and UK‟s famous Marks & Spencer Porter s Diamond Model(1990: 73) argues that “nation‟s competitiveness depends on the capacity of its industry to innovate and upgrade” and therefore is determined by a nation‟s level of productivity. From an organisational perspective this means that national competitive advantage depends on the nations ability to provide a home base for companies to sustainably improve their products and services in terms of quality, features, technology and so to successfully compete in highly productive industries internationally. Hence, the advantage of the framework is that it identifies four important, interrelated factors that create and illustrate the essential national environment where companies are born, grow and build sustainable competitive advantages (Porter, 1990: 78). The concept is then quite useful for companies to perform the necessary research and identify which countries would be most suitable for internationalisation. The first determinant, factor conditions, are...
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...2/27/12 Generic Competitive Strategies - eNotes.com Generic Competitive Strategies Generic Competitive Strategies Three of the most widely read books on competitive analysis in the 1980s were Michael Porter's Competitive Strategy, Competitive Advantage, and Competitive Advantage of Nations. In his various books, Porter developed three generic strategies that, he argues, can be used singly or in combination to create a defendable position and to outperform competitors, whether they are within an industry or across nations. Porter states that the strategies are generic because they are applicable to a large variety of situations and contexts. The strategies are (1) overall cost leadership; (2) differentiation; and (3) focus on a particular market niche. The generic strategies provide direction for firms in designing incentive systems, control procedures, and organizational arrangements. Following is a description of this work. OVERALL COST LEADERSHIP STRATEGY Overall cost leadership requires firms to develop policies aimed at becoming and remaining the lowest-cost producer and/or distributor in the industry. Company strategies aimed at controlling costs include construction of efficient-scale facilities, tight control of costs and overhead, avoidance of marginal customer accounts, minimization of operating expenses, reduction of input costs, tight control of labor costs, and lower distribution costs. The low-cost leader gains competitive advantage by getting...
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...Ones and Dilchert’s article: the creation of organizational cultures. Here, we will develop the idea of how culture, value creation, and competitive advantage are linked to environmental sustainability. We will briefly illustrate our arguments with findings from our case-study research in the hospitality industry in 13 Iberoamerican countries.1 1. Ours is research in progress, based on qualitative and mixed research methods. It aims to analyze the role of sustainability in the hospitality sector in Iberoamerica: Spain, Portugal, and Latin America (concretely, in Chile, Brazil, Peru, Argentina, Mexico, Colombia, Venezuela, Uruguay, Costa Rica, Nicaragua, and the Dominican Republic). Organizational culture and sustainability Sustainability and Organizational Culture There is a nascent body of literature that aims to understand how companies can embed sustainability in their organizational cultures (Howard-Grenville & Bertels, 2012). For these authors, culture has been conceptualized as shared norms or values (reinforced through the role of leaders and ‘‘champions,’’ the allocation of resources, the use of incentives, and the existence of corporate policies), as a frame or filter (that is, as recursive connections between people’s day-to-day actions and the meanings associated with them), and as a toolkit (made malleable by individual actors who use cultural resources in new ways). Among the myriad of conceptualizations available, Ulrich and Brockbank...
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...Assignment The Value Chain in Your Life Write a (minimum two but no more than three page) paper (not including title and reference pages) describing the value chain in your life. There is an already APA formatted template in Doc Sharing for you to use as your starting point for this assignment. If you use references in your paper to support your content, be sure to apply the APA in-text reference citation format. Any item listed on the References page must also be applied and cited within the paper. If you use verbatim quotes, put them within quotation marks, cite the reference and include a page number. This assignment is an opportunity for you to relate what you learned about the value chain in Unit 1 to your own life. For example, one element of a value chain is the focus on competitive advantage, so you might wish to elaborate on this aspect. Submit your completed paper into the Unit 1 Dropbox. Value Chain Analysis - Problem-Solving Training from MindTools.com You are here: > Home > Strategy Tools > Value Chain Analysis ... Value Chain Analysis is a useful tool for working out how you can create the greatest ..... Personal Goal Setting: Planning to live your life your way · How Good Is Your Time ...www.mindtools.com/pages/article/newTMC_10.htm Value Chain Analysis Achieving Excellence in the Things That Really Matter Value should be added at each link. © iStockphoto/melhi Value Chain Analysis is a useful tool...
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...IN AN article entitled “Strategy and the Internet” published in the March 2001 edition of the Harvard Business Review, Michael Porter outlined six principles that he believes companies need to follow if they want to establish and maintain a distinctive strategic position in the market place. Since the internet is a business platform with low barriers to entry, these six strategic principles are particularly relevant to any company that wants to be profitable online: 1. Stand for something In order for a company to develop unique skills, build the right assets, and establish a strong reputation it is important to define what the company stands for so that the company will have continuity of direction. 2. Focus on profitability This point seems obvious, however many internet based companies have instead focused on “unique visitors” and “page views” as measures of performance. At the end of the day, sustainable profits will only be possible where goods or services can be provided at a price which exceeds the cost of production. 3. Offer consumers a unique set of benefits Good strategy involves being able to provide a distinct set of benefits to a particular group of consumers. Trying to please every consumer will not give a company a sustainable competitive advantage. 4. Perform core activities differently If a company is able to establish a distinctive value chain by performing key activities differently from its competitors, then this will help...
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...Kudler Fine Foods Sonia Shelby MMPBL 502 January 15, 2012 Dr. Patricia Anderson Abstract In the wake of growth, expansion, and overcoming temporary closing some departments for renovations, Kudler Fine Foods (Kudler) made the right business decisions to renovate its store sequentially; thereby eliminating the need to downsize its workforce. Management temporarily relocated affected employees to one of the other stores not under renovation offered the best solution for its customers, employees, and the community. This paper will discuss how changes in technology have created business opportunities for Kudler; the generic strategy Kudler is pursuing and how Kudler management should constantly scan the fine foods industry for ideas that will allow it to update its strategy. Table of Contents Introduction……………………………………………………………….…..4 Technology and Business Opportunities……………………………………...4 Generic Business Strategy…………………………………………………….6 Multiple Business Strategies…………………………………………………..7 Conclusion………………………………………………………………….....8 References………………………………………………………………….....9 Kudler Fine Foods Kudler Fine Foods (Kudler) is the vision of Kathy Kudler, founder and owner. She was certain that combining the convenience of one-stop shopping with reasonable prices would be a recipe for success because gourmet food shops are rare in the San Diego metropolitan area. Kudler represents the finest ingredients for gourmet cooking. Kudler opens its first store on June 18, 1998...
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...Transien Achieving a sustainable competitive edge is nearly impossible these days. A playbookfor strategy in a highvelocity world by Rita Günther McGrath 62 Harvard Business R ARTWORK Tara Donovan, Untitted (Styrofoam Cups), aoo8, Styrofoam cups •and glue, installation dimensions variable SPOTLIGHT ON STRATEGY FOR TURBULENT TIMES Each month we illustrate our Spotlight package with works from an accomplished artist. We hope that the lively, cerebral creations of these photographers, painters, and installation artists will infuse the pages with additional energy and intelligence and amplify what are often complex and abstract concepts. This month we showcase Tara Donovan, a Brooklynbased artist known for her large sculptures and installations. Donovan, whose work is composed of everyday objects like pencils and toothpicks, has explained, "It's all about perceiving this material from a distance and close up and how the light interacts with it." View more of the artist's work at pacegaUery.com. S R T G IS STUCK. For too long the business world an inflection point. Thefieldof strategy needs to acT AE Y has been obsessed with the notion of building a sus- knowledge what a multitude of practitioners already tainable competitive advantage. That idea is at the know: Sustainable competitive advantage is now the core of most strategy textbooks; it forms the basis exception, not the rule. Transient advantage is the of Warren Buffett's investment strategy; it's central new...
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...Rogers’ Chocolates Formulation and Implementation in Single Business Firms 1. Strategic issue or problem statement With the mission of committing towards the production and marketing of fine products that reflect/maintain excellence and quality, Roger’s chocolate company has an opportunity to attain this in the premium chocolate market which has been growing annually at a rate of 20%. The success determinant of the premium market is quality and brand market, prerequisites (excellence, quality and brand) which Roger’s has the ability to meet this criterion. 2. Explanation of the Strategic issue or problem statement Identification of opportunities has been considered by various scholars, Shane & Venkatraman (2000), Gaglio & Katz (2001) and Ardichvili, Cardozo & Ray (2003) as a fundamental component in business formulation and implementation strategy. In addition, opportunity is identified in form of unsolved problems, creation of opportunities via ingenuity and creativity, inefficient processes or unmet needs. In Rodgers’ Chocolates case, opportunity exists in form of unmet needs. As indicated, even though premium chocolates are more like the imported roses in the sense that they are not considered as life’s necessities, more people still want them. Such is the case of Canada,( the major Rogers market share) where more people appreciate chocolates hence increasing the premium chocolate market share by 20% each year with a market size amounting to millions (US$ 167) in year 2006...
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...Essay: Value chain analysis Value chain analysis (VCA) refers to the process whereby a firm determines the costs associated with organizational activities from purchasing raw material to manufacturing products to marketing those products. Further, according to Porter he stated that “a firm’s value chain and the way it performs individual activities are a reflection of its history, its strategy, its approach to implementing its strategy, and the underlying economics of the activities themselves.” There are two major types’ activities of a company’s value chain describe by Porter: primary activities and support activities. Primary activities are the transforming of inputs into outputs further to delivery and after-sales support. On the other hand, support activities support primary activities and other supporting activities that are undertaken to aid individuals and groups of these activities. The importance of using the VCA in strategic decision-making is to analyze, coordinate and optimize linkages between activities in the value chain, by focusing on the interdependence between these activities. VCA is a mechanism which facilitates the optimization and coordination of interdependent activities in the value chain, which may cross organizational boundaries and accounting information is an important constituent of value chain analysis. The main idea of the analysis is to break up the chain of activities which avoid basic raw materials to end-use customers into strategically...
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...IT STRATEGIC PLANNING “You’ve got to be very careful if you don’t know where you are going, because you might not get there.” Yogi Berra BACKGROUND Henry Mintzberg, former president of the Strategic Management Society, points out that “strategy can not be planned because planning is about analysis and strategy is about synthesis.” 1 Failure to recognize this basic distinction accounts for the frequent failure of such exercises, as does an excessive focus on technical detail, lack of suitable leadership, and perhaps most important, failure to align technology to institutional mission and priorities. Strategic planning involves a structure or framework, a set of procedures (both formal and informal), and of course content. Beyond these basic elements, the underlying assumptions about strategic planning are that the future can be anticipated, forecasted, managed or even controlled, and that the best way to do so is to have a formal and integrated plan about it in place. The process of planning itself may turn out to be more important than the results, and that process requires, as Mintzberg suggests, both analysis and synthesis. Planning simply introduces a formal “discipline” for conducting long-term thinking about an institution, and for recognizing opportunities in and for minimizing risks from the external and internal environments. Among the hundreds available, perhaps the most well-know model of strategic planning has the SWOT (for strengths, weaknesses, opportunities...
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...Introduction 1.1 Briefly describe of company Amway is a one of the America multinational direct-selling company selling most variety of product such as heath, beauty and home care needs. 2.1 The General Environment 2.1.1Pestles Environmental factor are 2.1.2 Application to the company 2.2 The competitive environment 2.2.1 Poter 5 forces 2.2.2Applicable to the company 2.3 Internal Analysis 2.3.1 Value Chain Activities The Real Estate Value chain (REIT), which can be extract more activities that list in these 5 step which is Holding/Ownership, Finance, Construction, Transaction(Buy/Sell) and Use. Residential- Housing, society, apartment etc commercial- offices, complex, hotel, hospital industrial- Factory plant 2.3.1 Resources based view 2.3.3Assessing Organization Performance 2.4 Resources based view 2.4.1 Core competences 2.4.2 Distinctive Capabilities 2.4.3 Resources, Capablelities and strategy formulation 2.4.4 Sustainable Competitive Advantages 2.4.5 Application to the company 2.5 Assessing performance organization 2.5.1 Contesting Profit maximization 2.5.2Application to the company 3.0 Strategy formulation 3.1 Business Level Strategy 3.1.1 Genetic competitive strategy 3.1.2Resources Based Approach 3.2 Corporate level strategy 3.2.1 Ansoff strategy 3.2.2 Application to the company 4.0 Strategy implementation 4.1.1 Ghoshal (1987) 4.1.2 International Strategy 4.1.3 Entry Mode Strategy 4.1.4 The diamond of national Advantages 4...
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