1) Michael Porter's Diamond Model analyzes factors of production, demand conditions, related and supporting industries, and firm strategy/rivalry that contribute to a nation's competitive advantage. 2) Examples include India's BPO sector benefiting from skilled labor and Japan's auto industry improving through domestic rivalry. 3) International strategies include multi-domestic, with decentralized control tailored to local needs, global with standardized products worldwide, and transnational seeking both global efficiency and local responsiveness.

1. INTERNATIONAL BUSINESS LEVEL
STRATEGY
INTERNATIONAL CORPORATE LEVEL
STRATEGY

2. MICHAEL PORTER'S NATIONAL
DIAMOND

3. FACTOR OF PRODUCTION
• A country creates its own important factors such as skilled
resources and technological base.
• The stock of factors at a given time is less important than the
extent that they are upgraded and deployed.
• Local disadvantages in factors of production force innovation.
Adverse conditions such as labor shortages or scarce raw
materials force firms to develop new methods, and this
innovation often leads to a national comparative advantage.
EXAMPLES:
• Indian BPO sector
• Japan's relative lack of raw materials

4. DEMAND CONDITIONS
• When the market for a particular product is larger locally than
in foreign markets, the local firms devote more attention to
that product than do foreign firms, leading to a competitive
advantage when the local firms begin exporting the product.
• A more demanding local market leads to national advantage.
• A strong, trend-setting local market helps local firms
anticipate global trends.

5. DEMAND CONDITIONS
EXAMPLE:
• we can take the case of Germany which has some of the
world's premier automobile companies like
Mercedes, BMW, Porsche.
• German auto companies have dominated the world when it
comes to the high-performance segment of the world
automobile industry.
• General electric
• In Indian BPO sector

6. RELATED AND SUPPORTING
INDUSTRIES
• When local supporting industries are competitive, firms enjoy
more cost effective and innovative inputs.
• This effect is strengthened when the suppliers themselves are
strong global competitors.
EXAMPLE:
• Silicon Valley in the USA and Silicon Glen in the UK are techno
clusters of high-technology industries which includes
individual computer software & semi-conductor firms.
• In Germany, a similar cluster exists around chemicals, synthetic
dyes, textiles and textile machinery.

7. FIRM STRATEGY STRUCTURE
& RIVALRY
• Local conditions affect firm strategy
• In Porter's Five Forces model, low rivalry made an industry
attractive. While at a single point in time a firm prefers less
rivalry, over the long run more local rivalry is better since it
puts pressure on firms to innovate and improve. In fact, high
local rivalry results in less global rivalry.
• Local rivalry forces firms to move beyond basic advantages
that the home country may enjoy, such as low factor costs.

8. FIRM STRATEGY STRUCTURE
& RIVALRY
Examples:
 As an example, the Japanese automobile industry with 8
major competitors
(Honda, Toyota, Suzuki, Isuzu, Nissan, Mazda, Mitsubishi, and
Subaru) provide intense competition in the domestic
market, as well as the foreign markets in which they compete.
 Local rivalry have forced firms to move beyond basic
advantages.
examples INFOSYS , WIPRO AND TCS [ TATAS]

9. EXAMPLES
• Japanese factor conditions: Japan has a relatively high
number of electrical engineers per capita.
• Japanese demand conditions: The Japanese market was
very demanding because of the written language.
• Large number of related and supporting industries with
good technology, for example, good miniaturized
components since there is less space in Japan.
• Domestic rivalry in the Japanese fax machine industry
pushed innovation and resulted in rapid cost reductions.

10. INTERNATIONAL CORPORATE
LEVEL STRATEGY
• MULTI DOMESTIC STRATEGY
• GLOBAL STRATEGY
• TRANSACTIONAL STRATEGY

11. MULTI DOMESTIC STRATEGY
Multi domestic Strategy and operating decisions are
decentralized to strategic business units (SBU) in each country
EXAMPLES
• One of the nation's most popular hamburger chains is an
example of a multi domestic strategy. The company
researches each country’s local customs and foods before
creating its menu items and opening up a store. For
example, the restaurant's stores in India do not sell any
sandwiches made with beef, since the Indian culture sees
cows as sacred.

12. GLOBAL STRATEGY
• Global Strategy Products are standardized
across national markets
EXAMPLE
• GE, Apple, Sony and Gillette pursue a global strategy by
competing in all markets, providing the same product for each
market, strong centralized control, identifying customer needs
and wants across international borders, and locating value
adding activities where they can achieve the lowest cost.
• Boeing’s global R&D network
– UK, Italy, (collobration)
– Spain, Australia, Russia (FDI)

13. TRANSACTIONAL STRATEGY
Transnational Strategy Seeks to achieve both global efficiency
and local responsiveness
EXAMPLE
• A very well-known cola soft drink is one example of a
transnational product. This company's beverage recipe is kept
secret and has not changed in many years. The product is sold
in over 200 countries worldwide, and this beverage company
retains exactly the same beverage formulation in each
country. The bottle’s label may reflect the local language, but
the logo and contents remain the same.