[removed]
The Competitive Advantage
of Nations
Michael E. Porter
Harvard Business Review
90211
HBR
MARCH±APRIL 1990
The Competitive Advantage of Nations
Michael E. Porter
National prosperity is created, not inherited. It does of the patterns of competitive success in ten leading
trading nations, contradict the conventional wisdomnot grow out of a country's natural endowments, its
labor pool, its interest rates, or its currency's value, that guides the thinking of many companies and na-
tional governments— and that is pervasive today inas classical economics insists.
Anation'scompetitivenessdependsonthecapacity the United States. (For more about the study, see the
insert “ Patterns of National Competitive Success.” )of its industry to innovate and upgrade. Companies
gain advantage against the world's best competitors According to prevailing thinking, labor costs, inter-
est rates, exchange rates, and economies of scale arebecause of pressure and challenge. They benefit from
having strong domestic rivals, aggressive home-based the most potent determinants of competitiveness. In
companies, the words of the day are merger, alliance,suppliers, and demanding local customers.
In a world of increasingly global competition, na- strategic partnerships, collaboration, and suprana-
tional globalization. Managers are pressing for moretions have become more, not less, important. As the
basis of competition has shifted more and more to government support for particular industries. Among
governments, there is a growing tendency to experi-the creation and assimilation of knowledge, the role
of the nation has grown. Competitive advantage is ment with various policies intended to promote na-
tional competitiveness— from efforts to managecreated and sustained through a highly localized pro-
cess. Differences in national values, culture, eco- exchange rates to new measures to manage trade to
policies to relax antitrust— which usually end upnomic structures, institutions, and histories all
contribute to competitive success. There are striking only undermining it. (See the insert “ What Is Na-
tional Competitiveness?” )differences in the patterns of competitiveness in
every country; no nation can or will be competitive These approaches, now much in favor in both
companies and governments, are flawed. They funda-in every or even most industries. Ultimately, nations
succeed in particular industries because their home mentally misperceive the true sources of competi-
tive advantage. Pursuing them, with all their short-environment is the most forward-looking, dynamic,
and challenging. term appeal, will virtually guarantee that the United
States— or any other advanced nation— neverThese conclusions, the product of a four-year study
achieves real and sustainable competitive advantage.
We need a new perspective and new tools— an ap-
Harvard Business School professor Michael E. Porter is the author proach to competitiveness that grows ...
This document provides an overview and analysis of various international trade theories, from early mercantilism to modern theories. It summarizes key aspects of theories such as absolute advantage, comparative advantage, Heckscher-Ohlin, product life cycle, new trade theory, and Porter's diamond framework. The last part discusses global strategic rivalry theory and Porter's national competitive advantage theory.
The document discusses strategies and organizational structures of multinational corporations operating across international markets. It covers topics such as the impact of internationalization on industry structure and competition, frameworks for analyzing competitive advantage in an international context, and how national influences can shape competitiveness. It also examines the evolution of multinational strategies from early decentralized structures to more centralized and integrated approaches.
The document discusses strategies for multinational corporations operating internationally. It covers topics such as the international location of production, modes of foreign market entry, implications of internationalization on industry analysis, and developing competitive advantage within an international context. National influences on competitiveness are also examined.
International business third sem-unit-3.pptx(1)Manisha Rajan
International trade theories aim to explain why trade occurs between countries. Classical theories focused on country advantages like absolute advantage and comparative advantage. New theories examine how natural advantages, government policies, and industry characteristics enable trade. Porter's diamond of national advantage analyzes how factor conditions, demand conditions, related/supporting industries, and firm strategy/rivalry determine a country's competitive advantage.
InstructionsWrite a paper about the International Monetary Syste.docxvanesaburnand
Instructions
Write a paper about the International Monetary System that addresses each of the following issues:
· Define the International Monetary System and outline the history of the system.
· Describe and provide examples of what is meant by “currency regimes,” and define selected types of regimes and form an argument for selecting fixed exchange rate and arguments for selecting flexible exchange rates.
· Describe and define the creation of the Euro and discuss the benefits as well as the problems associated with the creation of this currency.
Support your paper with at least five (5) resources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included. Your paper should demonstrate thoughtful consideration of the ideas and concepts that are presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards.
Length: 5-7 pages (not including title and reference pages).
Eiteman, D., Stonehill, M., & Moffett, M. (2016). Multinational business finance. Boston, MA: Prentice-Hall.
Read Chapters 1, 2
This is a major resource, however, I think the assignment can be accomplished without it. I can’t seem to be able to download the book.
The global company's challenge.
Authors:
Dewhurst, Martin1
Harris, Jonathan2
Heywood, Suzanne
Aquila, Kate
Source:
McKinsey Quarterly. 2012, Issue 3, p76-80. 5p.
Document Type:
Article
Subject Terms:
*International business enterprises
*Emerging markets
*Economies of scale
*Contracting out
*Risk management in business
*Business models
*Executives
*Financial leverage
*Globalization
*Research & development
Developing countries
Company/Entity:
International Monetary Fund DUNS Number: 069275188
Aditya Birla Management Corp. Pvt. Ltd.
International Business Machines Corp. DUNS Number: 001368083 Ticker: IBM
NAICS/Industry Codes:
919110 International and other extra-territorial public administration
928120 International Affairs
541712 Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
541711 Research and Development in Biotechnology
Abstract:
The article focuses on the management of risks, costs, and strategies by international businesses in emerging markets. It states that the International Monetary Fund reported that the ten fastest-growing economies after 2012 will all be in developing countries. It mentions that technology company International Business Machines expects by 2015 to earn 30 percent of revenues in emerging markets compared to 17 percent in 2009, while Indian multinational conglomerate Aditya Birla Group earns over half of its revenue outside India and has operations in 40 nations. It talks about the benefit of economies of scale in shared services enjoyed by large global companies and comments that the ability to outsource business services and manufacturing is benefiting local busine.
D
A
N
IE
LA
G
U
G
LI
E
LM
E
T
T
I
or more than a century, the game was domi-
nated by the usual suspects: Europe, North
America, and Japan. But in recent decades the
competitive landscape has changed. Cham-
pions coming from emerging markets have risen to
leadership positions in a wide range of global indus-
tries, and they have done it not by defeating the es-
tablished giants in their own game, but by changing
the rules to create a new game altogether. In cement,
it is not longer Europe that heads the list, but an ag-
gressive multinational –Cemex– with headquarters
in Monterrey, Mexico. The fastest growing appliance
maker in the world –Haier– hails from neither Japan
nor Europe, but Qingdao in China. Another Chinese
F
by Alejandro Ruelas-Gossi and Donald N. Sull
november 2006 2
The Key to Agility on the
Global Stage
The new global champions coming from
emerging markets are not finding better
answers to old strategic questions. They
are changing the question itself –no longer
thinking in how to optimize traditional value
chains, but in how to create and coordinate
networks to seize opportunities that others
don’t see.
Orchestration
Strategy
Published in Harvard Business Review América Latina, November 2006
upstart –Galanz– leads the world market in micro -
wave ovens. The world’s biggest brewer by volume
–InBev– is a joint-venture between a Belgian and a
Brazilian brewer. The world’s leading steel company
–Mittal Steel– began less than 30 years ago as a small
mini-mill in Indonesia.
At first, the explosive advance of these and other
emerging champions fall somewhere between un-
likely and miraculous. Most emerging market compa-
nies face a high cost of capital and limited availability
of funding; their domestic customers often have low
disposable income but are still discerning consum-
ers; firms must fight a two-front war against domestic
competitors at the low-end and multinationals at the
high-end; and they lack resources such as technology
and brand at the scale afforded by established leaders
in developed economies.
What explains, then, that these upstarts from
emerging markets have managed to carve out global
leadership positions in such a short period of time?
Why have the incumbent players relinquished market
share to competitors coming from developing regions
such as China, India and Latin America? We believe
that the problem for many incumbent firms has been
that their managers have been asking the wrong ques-
tions. In North America, Japan and Europe, manag-
ers are still obsessing over the question of how they
can optimize their established business models. This
question assumes that there is only one best way to
compete –often embodied in the notion of a value
chain. It leads executives to ask what other competi-
tors are doing and then benchmark one another to
mindlessly ape the most successful. It leads them to
ask existing customers if they are satisfied with th ...
This document outlines and compares the trade policies of Australia's major political parties - Labor, the Coalition, and the Greens. Labor emphasizes sharing the benefits of trade liberalization domestically and internationally, while also providing short-term support for workers and sectors adjusting to trade. The Coalition focuses on increasing exports through fast-tracking free trade agreements in Asia to increase foreign investment. The Greens prioritize fairness and democracy in trade and assisting developing countries. The parties differ in their stances on issues like labor rights, healthcare, intellectual property and more. Implications of each party winning the election are discussed.
This document provides an overview and analysis of various international trade theories, from early mercantilism to modern theories. It summarizes key aspects of theories such as absolute advantage, comparative advantage, Heckscher-Ohlin, product life cycle, new trade theory, and Porter's diamond framework. The last part discusses global strategic rivalry theory and Porter's national competitive advantage theory.
The document discusses strategies and organizational structures of multinational corporations operating across international markets. It covers topics such as the impact of internationalization on industry structure and competition, frameworks for analyzing competitive advantage in an international context, and how national influences can shape competitiveness. It also examines the evolution of multinational strategies from early decentralized structures to more centralized and integrated approaches.
The document discusses strategies for multinational corporations operating internationally. It covers topics such as the international location of production, modes of foreign market entry, implications of internationalization on industry analysis, and developing competitive advantage within an international context. National influences on competitiveness are also examined.
International business third sem-unit-3.pptx(1)Manisha Rajan
International trade theories aim to explain why trade occurs between countries. Classical theories focused on country advantages like absolute advantage and comparative advantage. New theories examine how natural advantages, government policies, and industry characteristics enable trade. Porter's diamond of national advantage analyzes how factor conditions, demand conditions, related/supporting industries, and firm strategy/rivalry determine a country's competitive advantage.
InstructionsWrite a paper about the International Monetary Syste.docxvanesaburnand
Instructions
Write a paper about the International Monetary System that addresses each of the following issues:
· Define the International Monetary System and outline the history of the system.
· Describe and provide examples of what is meant by “currency regimes,” and define selected types of regimes and form an argument for selecting fixed exchange rate and arguments for selecting flexible exchange rates.
· Describe and define the creation of the Euro and discuss the benefits as well as the problems associated with the creation of this currency.
Support your paper with at least five (5) resources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included. Your paper should demonstrate thoughtful consideration of the ideas and concepts that are presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards.
Length: 5-7 pages (not including title and reference pages).
Eiteman, D., Stonehill, M., & Moffett, M. (2016). Multinational business finance. Boston, MA: Prentice-Hall.
Read Chapters 1, 2
This is a major resource, however, I think the assignment can be accomplished without it. I can’t seem to be able to download the book.
The global company's challenge.
Authors:
Dewhurst, Martin1
Harris, Jonathan2
Heywood, Suzanne
Aquila, Kate
Source:
McKinsey Quarterly. 2012, Issue 3, p76-80. 5p.
Document Type:
Article
Subject Terms:
*International business enterprises
*Emerging markets
*Economies of scale
*Contracting out
*Risk management in business
*Business models
*Executives
*Financial leverage
*Globalization
*Research & development
Developing countries
Company/Entity:
International Monetary Fund DUNS Number: 069275188
Aditya Birla Management Corp. Pvt. Ltd.
International Business Machines Corp. DUNS Number: 001368083 Ticker: IBM
NAICS/Industry Codes:
919110 International and other extra-territorial public administration
928120 International Affairs
541712 Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
541711 Research and Development in Biotechnology
Abstract:
The article focuses on the management of risks, costs, and strategies by international businesses in emerging markets. It states that the International Monetary Fund reported that the ten fastest-growing economies after 2012 will all be in developing countries. It mentions that technology company International Business Machines expects by 2015 to earn 30 percent of revenues in emerging markets compared to 17 percent in 2009, while Indian multinational conglomerate Aditya Birla Group earns over half of its revenue outside India and has operations in 40 nations. It talks about the benefit of economies of scale in shared services enjoyed by large global companies and comments that the ability to outsource business services and manufacturing is benefiting local busine.
D
A
N
IE
LA
G
U
G
LI
E
LM
E
T
T
I
or more than a century, the game was domi-
nated by the usual suspects: Europe, North
America, and Japan. But in recent decades the
competitive landscape has changed. Cham-
pions coming from emerging markets have risen to
leadership positions in a wide range of global indus-
tries, and they have done it not by defeating the es-
tablished giants in their own game, but by changing
the rules to create a new game altogether. In cement,
it is not longer Europe that heads the list, but an ag-
gressive multinational –Cemex– with headquarters
in Monterrey, Mexico. The fastest growing appliance
maker in the world –Haier– hails from neither Japan
nor Europe, but Qingdao in China. Another Chinese
F
by Alejandro Ruelas-Gossi and Donald N. Sull
november 2006 2
The Key to Agility on the
Global Stage
The new global champions coming from
emerging markets are not finding better
answers to old strategic questions. They
are changing the question itself –no longer
thinking in how to optimize traditional value
chains, but in how to create and coordinate
networks to seize opportunities that others
don’t see.
Orchestration
Strategy
Published in Harvard Business Review América Latina, November 2006
upstart –Galanz– leads the world market in micro -
wave ovens. The world’s biggest brewer by volume
–InBev– is a joint-venture between a Belgian and a
Brazilian brewer. The world’s leading steel company
–Mittal Steel– began less than 30 years ago as a small
mini-mill in Indonesia.
At first, the explosive advance of these and other
emerging champions fall somewhere between un-
likely and miraculous. Most emerging market compa-
nies face a high cost of capital and limited availability
of funding; their domestic customers often have low
disposable income but are still discerning consum-
ers; firms must fight a two-front war against domestic
competitors at the low-end and multinationals at the
high-end; and they lack resources such as technology
and brand at the scale afforded by established leaders
in developed economies.
What explains, then, that these upstarts from
emerging markets have managed to carve out global
leadership positions in such a short period of time?
Why have the incumbent players relinquished market
share to competitors coming from developing regions
such as China, India and Latin America? We believe
that the problem for many incumbent firms has been
that their managers have been asking the wrong ques-
tions. In North America, Japan and Europe, manag-
ers are still obsessing over the question of how they
can optimize their established business models. This
question assumes that there is only one best way to
compete –often embodied in the notion of a value
chain. It leads executives to ask what other competi-
tors are doing and then benchmark one another to
mindlessly ape the most successful. It leads them to
ask existing customers if they are satisfied with th ...
This document outlines and compares the trade policies of Australia's major political parties - Labor, the Coalition, and the Greens. Labor emphasizes sharing the benefits of trade liberalization domestically and internationally, while also providing short-term support for workers and sectors adjusting to trade. The Coalition focuses on increasing exports through fast-tracking free trade agreements in Asia to increase foreign investment. The Greens prioritize fairness and democracy in trade and assisting developing countries. The parties differ in their stances on issues like labor rights, healthcare, intellectual property and more. Implications of each party winning the election are discussed.
The document discusses Michael Porter's Diamond Model, which analyzes the competitive advantages of nations and industries. The model identifies four key attributes that determine national advantage: factor conditions, related and supporting industries, demand conditions, and firm strategy/rivalry. It provides an example analysis of the mobile telecommunications industry using the Diamond Model framework. The model can help organizations identify national-level factors that build advantages and inform internationalization strategies.
Learning Activity 1In the readings for this week we learned about .docxjesseniasaddler
Learning Activity 1
In the readings for this week we learned about the Demand Model that was introduced by Professor Michael Porter. According to the model, the ability of the firms in an industry whose origin is in a particular company to be successful in the international arena is shaped by four factors (1) their home country’s demand conditions, (1) their home country’s factor conditions, (3) related and supporting industries within their home country, and (4) strategy, structure, and rivalry among domestic competitors.
Learning Activity
Respond to the following questions:
(1)
Which of the four elements of the diamond model do you believe has the strongest influence on a firm’s fate when it competes in international markets?
(2)
Provide an example of a company that demonstrates this ability to compete internationally and how this company demonstrates this ability.
(3)
Which of the three types of International Strategies that were discussed in our readings does this company demonstrate? Provide a justification for your strategy choice.
Learning Activity 2
Multinational Organizations
1. International firms or multinational corporations are organizations that conduct business operations across national borders.
2. The strategic-management process is conceptually the same for multinational firms as for purely domestic firms, although the process is more complex for international firms due to more variables and relationships.
3. More time and effort are required to identify and evaluate external trends and events in multinational organizations than in domestic corporations.
4. Multinational corporations face unique and diverse risks, such as expropriation of assets, currency losses through exchange rate fluctuations, unfavorable foreign court interpretations of contracts and agreements, social/political disturbances, import/export restrictions, tariffs, and trade barriers.
5. Before entering international markets, firms should scan relevant journals and patent reports, seek the advice of academic and research organizations, participate in international trade fairs, form partnerships, and conduct extensive research to broaden their contacts and diminish the risk of doing business in new markets.
The Global Challenge
1. Few companies can afford to ignore the presence of international competition. Firms that seem insulated and comfortable today may be vulnerable tomorrow.
a. How to gain and maintain exports to other nations
b. How to defend domestic markets against imported goods.
2. America's economy is becoming much less American, as a world economy and monetary system are emerging. More and more countries around the world are welcoming foreign investment and capital. As a result, labor markets have steadily become more international.
3. Many countries became more protectionist during the recent global economic recession. Protectionism refers to countries imposing tariffs, taxes, and regulations on firms outside the country to favor.
The document discusses several theories of international trade:
1. Mercantilism held that a nation's wealth depended on accumulating gold and silver through trade surpluses. It advocated subsidies for exports and tariffs/quotas on imports.
2. Adam Smith's absolute advantage theory argued that countries should specialize in goods they produce most efficiently and trade for other goods. Both countries can benefit through specialization and trade.
3. David Ricardo's comparative advantage theory extended this, showing that trade can benefit both sides even if one country is more efficient overall. Countries should import goods they have a comparative - not absolute - disadvantage in.
4. Later theories examined factors like differences in factor endowments
This document provides an overview of global economic environment and international competition. It discusses various international trade theories such as absolute advantage, comparative advantage, and Porter's Diamond model of national competitive advantage. The theories explore factors that determine a country's trade patterns and competitive strengths in global trade, including factor endowments, demand conditions, related/supporting industries, and firm strategy/rivalry. The presentation aims to analyze the underlying factors contributing to competitive success in international markets and how nations can develop globally competitive industries.
Learning Activity 1In the readings for this week we learned abou.docxSHIVA101531
Learning Activity 1
In the readings for this week we learned about the Demand Model that was introduced by Professor Michael Porter. According to the model, the ability of the firms in an industry whose origin is in a particular company to be successful in the international arena is shaped by four factors (1) their home country’s demand conditions, (1) their home country’s factor conditions, (3) related and supporting industries within their home country, and (4) strategy, structure, and rivalry among domestic competitors.
Learning Activity
Respond to the following questions:
(1) Which of the four elements of the diamond model do you believe has the strongest influence on a firm’s fate when it competes in international markets?
(2) Provide an example of a company that demonstrates this ability to compete internationally and how this company demonstrates this ability.
(3) Which of the three types of International Strategies that were discussed in our readings does this company demonstrate? Provide a justification for your strategy choice.
Learning Activity 2
Multinational Organizations
1. International firms or multinational corporations are organizations that conduct business operations across national borders.
2. The strategic-management process is conceptually the same for multinational firms as for purely domestic firms, although the process is more complex for international firms due to more variables and relationships.
3. More time and effort are required to identify and evaluate external trends and events in multinational organizations than in domestic corporations.
4. Multinational corporations face unique and diverse risks, such as expropriation of assets, currency losses through exchange rate fluctuations, unfavorable foreign court interpretations of contracts and agreements, social/political disturbances, import/export restrictions, tariffs, and trade barriers.
5. Before entering international markets, firms should scan relevant journals and patent reports, seek the advice of academic and research organizations, participate in international trade fairs, form partnerships, and conduct extensive research to broaden their contacts and diminish the risk of doing business in new markets.
The Global Challenge
1. Few companies can afford to ignore the presence of international competition. Firms that seem insulated and comfortable today may be vulnerable tomorrow.
a. How to gain and maintain exports to other nations
b. How to defend domestic markets against imported goods.
2. America's economy is becoming much less American, as a world economy and monetary system are emerging. More and more countries around the world are welcoming foreign investment and capital. As a result, labor markets have steadily become more international.
3. Many countries became more protectionist during the recent global economic recession. Protectionism refers to countries imposing tariffs, taxes, and regulations on firms outside the country to favor th ...
The document summarizes several theories of international trade:
- It describes mercantilism and identifies its inherent flaws in assuming trade is zero-sum and constraining production.
- Absolute and comparative advantage theories are explained, showing how specialization allows nations to produce more.
- Factor proportions theory links a nation's exports to its abundant resources and imports to scarce resources.
- International product life cycle theory ties a product's exports and investment over its lifetime.
- New trade theories examine increasing returns to scale, first-mover advantages, and national competitive advantage from clusters of related industries.
Chapter 5 How Managers Use Balance of Payments Data – p.213Do.docxrobertad6
Chapter 5: How Managers Use Balance of Payments Data – p.213
Do some research on the items in the table below and see if you see a pattern with the various country’s economies:
1. What is the G7?
2. What is the E7?
G7 Countries
Continent where the country lies
GDP
Ease of Doing Business
1.
2.
3.
4.
5.
6.
7.
NOTE: When you find the GDP (Gross National Product) note the year – you may not have 2018 statistics. That is okay –find the latest data available. You may need to search for the Ranking of Ease of Doing Business – and then find the countries that make up the G7 or the E7.
NEXT PAGE!
E7 Countries
Continent where the country lies
GDP
Ease of Doing Business
1.
2.
3.
4.
5.
6.
7.
A. Compare the 2 groups of countries – explain your findings.
Globalization Effects on Country Institutions, People and Business
Chapter 3
Key Points for the Chapter
Economic development comprises positive economic growth and entails changes in a country’s political, economic, and cultural institutions, as well as in individual values, attitudes, and behaviors.
Economic development requires resources from public and private sectors, both internal and external.
Technology transfers by international corporations comprise manufacturing technologies, management organizations, and marketing know-how.
Intro: The Economic Development Process
Economic development is the progress countries make in living standards as they experience positive economic growth and the changes occurring in societal and cultural institutions and values as nations move toward more advanced stages of industrialization.
Economic progress demonstrates human progress, and more pragmatically, it keeps politicians in power, companies busy, and consumers (and voters) optimistic about the future.
Technology Transfers
International trade, investments, and global media have opened world markets up to a variety of modernizing influences.
In general terms, technology transfers occur as corporations enter new markets with products, technologies, lifestyles, and business methods developed in their home and other international markets.
Technology transfers first affect urban segments of developing countries where there are developed infrastructures and pocket of economically significant customers.
As media become commercialization and distribution channels are built into rural areas, greater proportions of developing-country populations come into contact with modernization influences.
4
Positive Effects
Positive effects occur as societies are exposed to broad varieties of products that make lives easier.
Convenience products such as packaged foods, and consumer durables such as refrigerators, radios, televisions, and stoves have positive effects on consumer lifestyles.
New technologies in manufacturing and distribution make products cheaper and more widely available. They provide employment opportunities for lo.
This document provides an overview of theories of international trade, beginning with mercantilism and including absolute advantage, comparative advantage, factor proportions, product life cycles, new trade theory, and national competitive advantage. It discusses key aspects of each theory, such as how mercantilism aimed to accumulate wealth through trade surpluses while exploiting colonies, and how comparative advantage shows that trade benefits both parties even if one country is less efficient. Theories have evolved over time to better explain patterns of trade.
1. The document discusses how industries are increasingly global and permeable, with blurred borders between nations, competitors, collaborators, and different industries.
2. Industries can be described in various ways like by the products/services, value, durability, or cyclical usage, but they are all becoming more global in characteristics.
3. The degree of globalization can be examined by factors like the trade ratio, percentage of overseas sales, and classification on a scale from multidomestic to fully global.
1) The document discusses foreign direct investment and multinational enterprises. It provides reminders and questions for an assignment on government intervention in international trade and investment.
2) It discusses the perspectives of neo-liberal economists who argue against government intervention, and Marxist economists who support intervention. Students are asked to address the arguments from both perspectives.
3) The document also provides questions for a mid-semester quiz on topics like how a host government's political ideology could influence negotiations with multinational enterprises, theories of foreign direct investment, and whether firms should invest abroad or focus on creating domestic jobs.
Stretagies that fit Emerging Markets,
International Business Strategies which are suitalbe for developing countries to attract the international investors
Globalization has increased competition by allowing easier movement of goods, services, capital and information across borders. This has led companies to expand internationally to access new markets and resources. There are several approaches for entering foreign markets including exporting, joint ventures, and foreign direct investment. Companies must analyze political, economic, social, technological and other factors in foreign markets and adapt their marketing strategies to local conditions. Success requires understanding local consumer needs and regulations while maintaining a consistent brand image. International expansion can increase sales and profits but also presents challenges in managing operations across diverse and distant markets.
This document provides an overview and syllabus for a course on global competitiveness and strategic alliances. The course covers various topics related to competitiveness including frameworks for assessing competitiveness, developing competitiveness through quality, productivity, policy, technology and innovation. It also covers the global competitiveness of the Indian industry, strategic alliances and internationalization of Indian businesses. The first unit defines competitiveness in terms of productivity and discusses macroeconomic and business strategy perspectives as well as approaches to assessing competitiveness at international and national levels.
Study to understand the management strategies of new multinationals from the ...Charm Rammandala
The purpose of this study is to understand how the emerging multinational companies from emerging economies such as BRIC countries, Middle East and developing countries like Thailand and Malaysia challenging the traditional multinational companies who have strong roots to developed countries. Using various strategies and business models such as alliances, joint ventures and in some cases wholly owned subsidiaries, newly emerging multinationals have made their presence felt in the world market. This study will take an in-depth look in to the management strategies in place to overcome the barriers and accelerate the growth.
Impact Of Venture Capital and Research Institute on Entrepreneurialecosystemâ...inventionjournals
This document examines the impact of venture capital and research institutions on entrepreneurial ecosystems by analyzing foreign companies listed on NASDAQ and NYSE. It finds:
1) Venture capital availability is a significant determinant of listings on NASDAQ, suggesting it supports startups, while financial sophistication alone is not sufficient.
2) Innovation variables like the quality of research institutions, university-industry collaboration, and government procurement of technology are significantly associated with NASDAQ listings.
3) Neither financial nor innovation variables show a significant association with NYSE listings, indicating NASDAQ better represents entrepreneurial capitalism requiring venture capital and research support.
Michale Porter developed an approach for understanding global competitiveness that relates the success of nations to the competitiveness of their home industries. His theory argues that industry clusters, or geographic concentrations of related industries that share resources, are the main drivers of jobs, income, and exports. Porter's approach requires identifying key industry clusters in a region and assessing how local resources provide those clusters a competitive advantage in global markets. His theory transformed thinking about national competitiveness and has influenced economic development policies.
This document discusses organizational development and the impact of globalization. It contains the following information:
- Defines organizational development as a critical, science-based process aimed at building an organization's capacity for change and achieving greater effectiveness through developing strategies, structures, and processes.
- Defines globalization as the spread of products, technology, information, and jobs across national borders, fostered through free trade. Globalization creates opportunities for businesses but also greater competition and awareness of customer needs.
- Discusses how globalization and innovation are related, noting that exposure to different cultures and perspectives can drive innovation, and global challenges may require different innovative solutions. Globalization allows ideas to spread more widely.
5 marketing strategy and marketing performance does strategy affect performa...INFOGAIN PUBLICATION
This article surveys marketing management literature to find out the positive impact that a good market and marketing can have on marketing performance at the marketplace. The marketplace in this contest can be either a country or even a continent since the companies are multinational and also have diversified holdings which help them to spread their tentacles to every nook and cranny of the globe. Locally based companies are not left out since they all use marketing strategies to do their marketing. Companies or multinationals of U.S. and U.K. parentage will be used a lot. Does the literature attest to the positive impact of very good marketing strategies on a company’s marketing performance? This is going to be investigated to come out with the justify opinion. Coming out with a very good marketing strategy to pilot or direct a company’s marketing assault is not very easy. It is plainly herculean. Implementation, monitoring, controlling and evaluating marketing strategies are equally herculean. Top marketing management do not have it easy with formulating, managing, and evaluating marketing strategies. Marketing performance measurement is tackled in this piece. It is essential to point out that marketing is not the pressure of only those in marketing (pan–marketing). It is very general managerial with all corporate functional players all actively involved.
Introduction Ideally, program andor policy interventio.docxMargenePurnell14
Introduction Ideally, program and/or policy interventions must seek to address an identified challenge/gap in a given sector/segment of society (McDavid & Hawthorn, 2013). To enable stakeholders make informed decisions on what program/policy choices to make there is the need for information and such information can be gathered through a process known as evaluation – the outcome of an evaluation process creates/provides information and this information influences policy choices and/or programmatic interventions (McDavid & Hawthorn, 2013). In this post, I briefly describe the Mentoring Gang Involved-Youth Project with is being implemented by Roca Inc, a Massachusetts-based nonprofit working with young male adults from Boston, Chelsea, and Springfield Massachusetts. I also explain the type of evaluation employed in evaluating the Project and the kind of data used for the evaluation and I indicate whether comparisons were used. Description of the project According to the Justice Center: Council of State Governments (2012), the Mentoring-gang Involved-Youth Project, targets young male adults between the ages of 17 and 24 who are suffering from substance abuse and are in detention. The primary objective of the Project is to reduce incarceration rates and enhance the ability of participants to retain employment (Roca, 2016). Under the Project, it is recognized that participants lack healthy relationships that will help them say away from criminal and/or antisocial behavior hence under the program three types of mentoring support are offered (Justice Center: Council of State Governments, 2012). The Justice Center: Council of State Governments (2012) informs its readers that mentoring support, under the Project, extends to supporting participants get jobs and remain employed. The project proceeds under the philosophy that keeping participants occurred by positive activities steers them away from antisocial criminal behavior (Justice Center: Council of State Governments, 2012). Some of the mentors under the Project have served jail time and successfully reintegrated into the community and are deemed to be role models hence using them to mentor participants is seen as offering participants with real life examples of persons who were just like them and have managed to emancipate themselves from the hands of criminal/antisocial conduct and are living better lives. Cognitive-restructuring is the objective of the Project and it seeks to achieve this through skills development and behavioral change for/of participants (Roca, 2016). Where this Project successfully restructures the cognitive behavior of participants and they acquire skills and get employment, their economic situation will change and this will translate into economic development. According to Roca (2016) the Project runs for four years - the first two years focus on inculcating into participants behavioral change whilst the remaining period focuses on sustaining the positive ch.
INTRO TO PUBLIC ADMINISTRATIONCase Study 11 Who Brought Bern.docxMargenePurnell14
INTRO TO PUBLIC ADMINISTRATION
Case Study 11: Who Brought Bernadine Healy Down? Case Study 11: Who Brought Bernadine Healy Down? Questions for Case study 11 1.Identify and discuss the public service culture present in the case and explain why Wise argue that public service motivation is found more in the government than in private sector. 2.Discuss if the Healy’s motivation for accepting the Red Cross presidency is in line with the public service motives? 3.Discuss what the case study indicates about the modern complexities of professional personnel in the public setting? 4.Does the Wise reading offer some specific answers to contemporary problems of public personnel motivation? If so, how?
.
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Similar to [removed]The Competitive Advantageof NationsMichael E.
The document discusses Michael Porter's Diamond Model, which analyzes the competitive advantages of nations and industries. The model identifies four key attributes that determine national advantage: factor conditions, related and supporting industries, demand conditions, and firm strategy/rivalry. It provides an example analysis of the mobile telecommunications industry using the Diamond Model framework. The model can help organizations identify national-level factors that build advantages and inform internationalization strategies.
Learning Activity 1In the readings for this week we learned about .docxjesseniasaddler
Learning Activity 1
In the readings for this week we learned about the Demand Model that was introduced by Professor Michael Porter. According to the model, the ability of the firms in an industry whose origin is in a particular company to be successful in the international arena is shaped by four factors (1) their home country’s demand conditions, (1) their home country’s factor conditions, (3) related and supporting industries within their home country, and (4) strategy, structure, and rivalry among domestic competitors.
Learning Activity
Respond to the following questions:
(1)
Which of the four elements of the diamond model do you believe has the strongest influence on a firm’s fate when it competes in international markets?
(2)
Provide an example of a company that demonstrates this ability to compete internationally and how this company demonstrates this ability.
(3)
Which of the three types of International Strategies that were discussed in our readings does this company demonstrate? Provide a justification for your strategy choice.
Learning Activity 2
Multinational Organizations
1. International firms or multinational corporations are organizations that conduct business operations across national borders.
2. The strategic-management process is conceptually the same for multinational firms as for purely domestic firms, although the process is more complex for international firms due to more variables and relationships.
3. More time and effort are required to identify and evaluate external trends and events in multinational organizations than in domestic corporations.
4. Multinational corporations face unique and diverse risks, such as expropriation of assets, currency losses through exchange rate fluctuations, unfavorable foreign court interpretations of contracts and agreements, social/political disturbances, import/export restrictions, tariffs, and trade barriers.
5. Before entering international markets, firms should scan relevant journals and patent reports, seek the advice of academic and research organizations, participate in international trade fairs, form partnerships, and conduct extensive research to broaden their contacts and diminish the risk of doing business in new markets.
The Global Challenge
1. Few companies can afford to ignore the presence of international competition. Firms that seem insulated and comfortable today may be vulnerable tomorrow.
a. How to gain and maintain exports to other nations
b. How to defend domestic markets against imported goods.
2. America's economy is becoming much less American, as a world economy and monetary system are emerging. More and more countries around the world are welcoming foreign investment and capital. As a result, labor markets have steadily become more international.
3. Many countries became more protectionist during the recent global economic recession. Protectionism refers to countries imposing tariffs, taxes, and regulations on firms outside the country to favor.
The document discusses several theories of international trade:
1. Mercantilism held that a nation's wealth depended on accumulating gold and silver through trade surpluses. It advocated subsidies for exports and tariffs/quotas on imports.
2. Adam Smith's absolute advantage theory argued that countries should specialize in goods they produce most efficiently and trade for other goods. Both countries can benefit through specialization and trade.
3. David Ricardo's comparative advantage theory extended this, showing that trade can benefit both sides even if one country is more efficient overall. Countries should import goods they have a comparative - not absolute - disadvantage in.
4. Later theories examined factors like differences in factor endowments
This document provides an overview of global economic environment and international competition. It discusses various international trade theories such as absolute advantage, comparative advantage, and Porter's Diamond model of national competitive advantage. The theories explore factors that determine a country's trade patterns and competitive strengths in global trade, including factor endowments, demand conditions, related/supporting industries, and firm strategy/rivalry. The presentation aims to analyze the underlying factors contributing to competitive success in international markets and how nations can develop globally competitive industries.
Learning Activity 1In the readings for this week we learned abou.docxSHIVA101531
Learning Activity 1
In the readings for this week we learned about the Demand Model that was introduced by Professor Michael Porter. According to the model, the ability of the firms in an industry whose origin is in a particular company to be successful in the international arena is shaped by four factors (1) their home country’s demand conditions, (1) their home country’s factor conditions, (3) related and supporting industries within their home country, and (4) strategy, structure, and rivalry among domestic competitors.
Learning Activity
Respond to the following questions:
(1) Which of the four elements of the diamond model do you believe has the strongest influence on a firm’s fate when it competes in international markets?
(2) Provide an example of a company that demonstrates this ability to compete internationally and how this company demonstrates this ability.
(3) Which of the three types of International Strategies that were discussed in our readings does this company demonstrate? Provide a justification for your strategy choice.
Learning Activity 2
Multinational Organizations
1. International firms or multinational corporations are organizations that conduct business operations across national borders.
2. The strategic-management process is conceptually the same for multinational firms as for purely domestic firms, although the process is more complex for international firms due to more variables and relationships.
3. More time and effort are required to identify and evaluate external trends and events in multinational organizations than in domestic corporations.
4. Multinational corporations face unique and diverse risks, such as expropriation of assets, currency losses through exchange rate fluctuations, unfavorable foreign court interpretations of contracts and agreements, social/political disturbances, import/export restrictions, tariffs, and trade barriers.
5. Before entering international markets, firms should scan relevant journals and patent reports, seek the advice of academic and research organizations, participate in international trade fairs, form partnerships, and conduct extensive research to broaden their contacts and diminish the risk of doing business in new markets.
The Global Challenge
1. Few companies can afford to ignore the presence of international competition. Firms that seem insulated and comfortable today may be vulnerable tomorrow.
a. How to gain and maintain exports to other nations
b. How to defend domestic markets against imported goods.
2. America's economy is becoming much less American, as a world economy and monetary system are emerging. More and more countries around the world are welcoming foreign investment and capital. As a result, labor markets have steadily become more international.
3. Many countries became more protectionist during the recent global economic recession. Protectionism refers to countries imposing tariffs, taxes, and regulations on firms outside the country to favor th ...
The document summarizes several theories of international trade:
- It describes mercantilism and identifies its inherent flaws in assuming trade is zero-sum and constraining production.
- Absolute and comparative advantage theories are explained, showing how specialization allows nations to produce more.
- Factor proportions theory links a nation's exports to its abundant resources and imports to scarce resources.
- International product life cycle theory ties a product's exports and investment over its lifetime.
- New trade theories examine increasing returns to scale, first-mover advantages, and national competitive advantage from clusters of related industries.
Chapter 5 How Managers Use Balance of Payments Data – p.213Do.docxrobertad6
Chapter 5: How Managers Use Balance of Payments Data – p.213
Do some research on the items in the table below and see if you see a pattern with the various country’s economies:
1. What is the G7?
2. What is the E7?
G7 Countries
Continent where the country lies
GDP
Ease of Doing Business
1.
2.
3.
4.
5.
6.
7.
NOTE: When you find the GDP (Gross National Product) note the year – you may not have 2018 statistics. That is okay –find the latest data available. You may need to search for the Ranking of Ease of Doing Business – and then find the countries that make up the G7 or the E7.
NEXT PAGE!
E7 Countries
Continent where the country lies
GDP
Ease of Doing Business
1.
2.
3.
4.
5.
6.
7.
A. Compare the 2 groups of countries – explain your findings.
Globalization Effects on Country Institutions, People and Business
Chapter 3
Key Points for the Chapter
Economic development comprises positive economic growth and entails changes in a country’s political, economic, and cultural institutions, as well as in individual values, attitudes, and behaviors.
Economic development requires resources from public and private sectors, both internal and external.
Technology transfers by international corporations comprise manufacturing technologies, management organizations, and marketing know-how.
Intro: The Economic Development Process
Economic development is the progress countries make in living standards as they experience positive economic growth and the changes occurring in societal and cultural institutions and values as nations move toward more advanced stages of industrialization.
Economic progress demonstrates human progress, and more pragmatically, it keeps politicians in power, companies busy, and consumers (and voters) optimistic about the future.
Technology Transfers
International trade, investments, and global media have opened world markets up to a variety of modernizing influences.
In general terms, technology transfers occur as corporations enter new markets with products, technologies, lifestyles, and business methods developed in their home and other international markets.
Technology transfers first affect urban segments of developing countries where there are developed infrastructures and pocket of economically significant customers.
As media become commercialization and distribution channels are built into rural areas, greater proportions of developing-country populations come into contact with modernization influences.
4
Positive Effects
Positive effects occur as societies are exposed to broad varieties of products that make lives easier.
Convenience products such as packaged foods, and consumer durables such as refrigerators, radios, televisions, and stoves have positive effects on consumer lifestyles.
New technologies in manufacturing and distribution make products cheaper and more widely available. They provide employment opportunities for lo.
This document provides an overview of theories of international trade, beginning with mercantilism and including absolute advantage, comparative advantage, factor proportions, product life cycles, new trade theory, and national competitive advantage. It discusses key aspects of each theory, such as how mercantilism aimed to accumulate wealth through trade surpluses while exploiting colonies, and how comparative advantage shows that trade benefits both parties even if one country is less efficient. Theories have evolved over time to better explain patterns of trade.
1. The document discusses how industries are increasingly global and permeable, with blurred borders between nations, competitors, collaborators, and different industries.
2. Industries can be described in various ways like by the products/services, value, durability, or cyclical usage, but they are all becoming more global in characteristics.
3. The degree of globalization can be examined by factors like the trade ratio, percentage of overseas sales, and classification on a scale from multidomestic to fully global.
1) The document discusses foreign direct investment and multinational enterprises. It provides reminders and questions for an assignment on government intervention in international trade and investment.
2) It discusses the perspectives of neo-liberal economists who argue against government intervention, and Marxist economists who support intervention. Students are asked to address the arguments from both perspectives.
3) The document also provides questions for a mid-semester quiz on topics like how a host government's political ideology could influence negotiations with multinational enterprises, theories of foreign direct investment, and whether firms should invest abroad or focus on creating domestic jobs.
Stretagies that fit Emerging Markets,
International Business Strategies which are suitalbe for developing countries to attract the international investors
Globalization has increased competition by allowing easier movement of goods, services, capital and information across borders. This has led companies to expand internationally to access new markets and resources. There are several approaches for entering foreign markets including exporting, joint ventures, and foreign direct investment. Companies must analyze political, economic, social, technological and other factors in foreign markets and adapt their marketing strategies to local conditions. Success requires understanding local consumer needs and regulations while maintaining a consistent brand image. International expansion can increase sales and profits but also presents challenges in managing operations across diverse and distant markets.
This document provides an overview and syllabus for a course on global competitiveness and strategic alliances. The course covers various topics related to competitiveness including frameworks for assessing competitiveness, developing competitiveness through quality, productivity, policy, technology and innovation. It also covers the global competitiveness of the Indian industry, strategic alliances and internationalization of Indian businesses. The first unit defines competitiveness in terms of productivity and discusses macroeconomic and business strategy perspectives as well as approaches to assessing competitiveness at international and national levels.
Study to understand the management strategies of new multinationals from the ...Charm Rammandala
The purpose of this study is to understand how the emerging multinational companies from emerging economies such as BRIC countries, Middle East and developing countries like Thailand and Malaysia challenging the traditional multinational companies who have strong roots to developed countries. Using various strategies and business models such as alliances, joint ventures and in some cases wholly owned subsidiaries, newly emerging multinationals have made their presence felt in the world market. This study will take an in-depth look in to the management strategies in place to overcome the barriers and accelerate the growth.
Impact Of Venture Capital and Research Institute on Entrepreneurialecosystemâ...inventionjournals
This document examines the impact of venture capital and research institutions on entrepreneurial ecosystems by analyzing foreign companies listed on NASDAQ and NYSE. It finds:
1) Venture capital availability is a significant determinant of listings on NASDAQ, suggesting it supports startups, while financial sophistication alone is not sufficient.
2) Innovation variables like the quality of research institutions, university-industry collaboration, and government procurement of technology are significantly associated with NASDAQ listings.
3) Neither financial nor innovation variables show a significant association with NYSE listings, indicating NASDAQ better represents entrepreneurial capitalism requiring venture capital and research support.
Michale Porter developed an approach for understanding global competitiveness that relates the success of nations to the competitiveness of their home industries. His theory argues that industry clusters, or geographic concentrations of related industries that share resources, are the main drivers of jobs, income, and exports. Porter's approach requires identifying key industry clusters in a region and assessing how local resources provide those clusters a competitive advantage in global markets. His theory transformed thinking about national competitiveness and has influenced economic development policies.
This document discusses organizational development and the impact of globalization. It contains the following information:
- Defines organizational development as a critical, science-based process aimed at building an organization's capacity for change and achieving greater effectiveness through developing strategies, structures, and processes.
- Defines globalization as the spread of products, technology, information, and jobs across national borders, fostered through free trade. Globalization creates opportunities for businesses but also greater competition and awareness of customer needs.
- Discusses how globalization and innovation are related, noting that exposure to different cultures and perspectives can drive innovation, and global challenges may require different innovative solutions. Globalization allows ideas to spread more widely.
5 marketing strategy and marketing performance does strategy affect performa...INFOGAIN PUBLICATION
This article surveys marketing management literature to find out the positive impact that a good market and marketing can have on marketing performance at the marketplace. The marketplace in this contest can be either a country or even a continent since the companies are multinational and also have diversified holdings which help them to spread their tentacles to every nook and cranny of the globe. Locally based companies are not left out since they all use marketing strategies to do their marketing. Companies or multinationals of U.S. and U.K. parentage will be used a lot. Does the literature attest to the positive impact of very good marketing strategies on a company’s marketing performance? This is going to be investigated to come out with the justify opinion. Coming out with a very good marketing strategy to pilot or direct a company’s marketing assault is not very easy. It is plainly herculean. Implementation, monitoring, controlling and evaluating marketing strategies are equally herculean. Top marketing management do not have it easy with formulating, managing, and evaluating marketing strategies. Marketing performance measurement is tackled in this piece. It is essential to point out that marketing is not the pressure of only those in marketing (pan–marketing). It is very general managerial with all corporate functional players all actively involved.
Similar to [removed]The Competitive Advantageof NationsMichael E. (20)
Introduction Ideally, program andor policy interventio.docxMargenePurnell14
Introduction Ideally, program and/or policy interventions must seek to address an identified challenge/gap in a given sector/segment of society (McDavid & Hawthorn, 2013). To enable stakeholders make informed decisions on what program/policy choices to make there is the need for information and such information can be gathered through a process known as evaluation – the outcome of an evaluation process creates/provides information and this information influences policy choices and/or programmatic interventions (McDavid & Hawthorn, 2013). In this post, I briefly describe the Mentoring Gang Involved-Youth Project with is being implemented by Roca Inc, a Massachusetts-based nonprofit working with young male adults from Boston, Chelsea, and Springfield Massachusetts. I also explain the type of evaluation employed in evaluating the Project and the kind of data used for the evaluation and I indicate whether comparisons were used. Description of the project According to the Justice Center: Council of State Governments (2012), the Mentoring-gang Involved-Youth Project, targets young male adults between the ages of 17 and 24 who are suffering from substance abuse and are in detention. The primary objective of the Project is to reduce incarceration rates and enhance the ability of participants to retain employment (Roca, 2016). Under the Project, it is recognized that participants lack healthy relationships that will help them say away from criminal and/or antisocial behavior hence under the program three types of mentoring support are offered (Justice Center: Council of State Governments, 2012). The Justice Center: Council of State Governments (2012) informs its readers that mentoring support, under the Project, extends to supporting participants get jobs and remain employed. The project proceeds under the philosophy that keeping participants occurred by positive activities steers them away from antisocial criminal behavior (Justice Center: Council of State Governments, 2012). Some of the mentors under the Project have served jail time and successfully reintegrated into the community and are deemed to be role models hence using them to mentor participants is seen as offering participants with real life examples of persons who were just like them and have managed to emancipate themselves from the hands of criminal/antisocial conduct and are living better lives. Cognitive-restructuring is the objective of the Project and it seeks to achieve this through skills development and behavioral change for/of participants (Roca, 2016). Where this Project successfully restructures the cognitive behavior of participants and they acquire skills and get employment, their economic situation will change and this will translate into economic development. According to Roca (2016) the Project runs for four years - the first two years focus on inculcating into participants behavioral change whilst the remaining period focuses on sustaining the positive ch.
INTRO TO PUBLIC ADMINISTRATIONCase Study 11 Who Brought Bern.docxMargenePurnell14
INTRO TO PUBLIC ADMINISTRATION
Case Study 11: Who Brought Bernadine Healy Down? Case Study 11: Who Brought Bernadine Healy Down? Questions for Case study 11 1.Identify and discuss the public service culture present in the case and explain why Wise argue that public service motivation is found more in the government than in private sector. 2.Discuss if the Healy’s motivation for accepting the Red Cross presidency is in line with the public service motives? 3.Discuss what the case study indicates about the modern complexities of professional personnel in the public setting? 4.Does the Wise reading offer some specific answers to contemporary problems of public personnel motivation? If so, how?
.
Introduction
GDD’s Results
Candidate’s Results
GDD/ Candidates Comparison
Recommendation
Purpose:
In the first assignment, students are given a scenario about Global Delivery Direct (GDD), a Norfolk, England medium-sized global delivery company that was started in 1968 by four college friends. . The purpose of this exercise is to see if you can identify the GDD leader in the potential candidates that will be hired to lead the new boutique services department.
Outcome Met by Completing This Assignment
use leadership theories, assessment tools, and an understanding of the role of ethics, values, and attitudes to evaluate and enhance personal leadership skills
Background:
Andrew Rockfish and the other owners have been looking for a competitive edge in the North American market that will translate well to the other divisions. A recent meeting of the owners resulted in the decision to target business organizations with custom services. The decision stems from recent feedback from customers that revealed that for GDD to anticipate the needs of their clients, suppliers and service vendors, the company needed to decrease the turnaround time in delivery and mailing of small packages and letters. Rockfish has decided to offer “boutique” services to its business customers. Catering to businesses will allow GDD to provide personal services that Fed Ex and UPS cannot offer. Customizing the services will allow GDD to increase prices while creating a new niche in the market. It was decided that the initial roll out of this idea would start in the US where an imminent threat from competition lies. Rockfish was on board with this idea and began a campaign among the rest of the company to find ideas that would help to encourage the new ‘Business First” strategic plan.
In response, a sales manager from the mid-west sales team brought this idea from their brainstorming session for Rockfish’s consideration. The sales manager proposed creating several mobile packing stores to bring customer service to businesses directly. GDD would not just pick up and deliver but they would also package. This model could be viewed as an UPS store on wheels. The team got the idea from a local delivery service that started a similar business as a Mail Store on Wheels and it seemed to be doing well. The mail company has five “Mail on Wheels” trucks and focuses on taking small business, not individuals away from the three local UPS and Kinko stores. After a financial review of the company, Rockfish decided to buy the business.
The mail business was started by a young entrepreneur, Adrian Cheng, who ran the business with the philosophy that “customers always get the best of our time and service”. Personal service, friendliness, and as much time as it takes to make the customer happy, was part of the mission statement. Employees were casually dressed and had no deadlines except those given by the customer. Cheng had about 45 employees and ran both.
IntroductionDefine the individual client or community populati.docxMargenePurnell14
Introduction
Define the individual client or community population.
This should be about 1-2 paragraphs that identify the client (or the organization).
In this section, for an A paper
, you will address the following elements:
Introduces the client or community population for whom the treatment or service plan is being developed,
Include cultural or diversity issues; also
Include the role of the social worker in supporting the client or population.
Include at least one reference that defines the importance of cultural sensitivity and the role of the social worker working with a client or organization.
Identified Issue/Situation
Describe the situation to be addressed that was identified by the client or the organization
In this section, for an A paper
, you will address the following elements:
Define the identifying issue, situation, or problem in a way that reflects client or community agency,
Discuss the cultural or diversity issues inherent in the client or community situation, and Reflects the interaction between the social worker and the client or community.
Include supporting literature from the course text or other related source.
Problem Statement
How did the client or the organization state the problem?
This should correspond to the Problem statement on the ASI Treatment Plan Template
Goals/Objectives to be Achieved
This should correspond to the Goals section of the ASI Treatment Plan Template.
In this section, for an A paper
, you will address the following elements:
Creates clearly defined objectives and goals with measurable outcomes that reflect the interaction between the social worker and the client or community.
Include literature that discusses how to define objectives and goals with measurable outcomes.
State the goals in measurable terms.
For example, “The client states a desire to quit smoking.” Or “The client states a desire to exercise more often.”
Measurable Goals
For example, the client who wants to quit smoking.
Measurable goals might be: To obtain a prescription for a nicotine patch by XXX date; to go for 3 days without a cigarette starting on XXX DATE; to call a hypnotherapist and find out about how to use hypnotherapy for changing cravings to smoke.”
Each goal should have a target completion date.
Interventions
Describe what the counselor will do to assist the client with achieving the defined goals.
Participation in Treatment Planning Process
What actions will the client (or organization) do to be involved in the plan of action?
Participation of Others in Goals and Plans
Who will the client (or organization) use to support their goals?
Indicators of Successful Completion
How will the client and counselor (or organization and manager) know that successful completion has occurred?
Parallels between Individual Treatment Plans
and Organizational Plans
Describe how an organizational plan would be the same or different from an individual treatment plan.
This is to .
Introduction to Public SpeakingWeek 6 AssignmentIn.docxMargenePurnell14
Introduction to Public Speaking
Week 6 Assignment
Informative Speech
It’s time to take what you've learned from all of your prior presentations and add an element of research to create your Informative Speech. You have to be cautious when choosing an Informative topic, as it’s easy to confuse the Informative Speech and a Persuasive Speech as the same thing. However an Informative Speech JUST provides information. The most basic informative speech is the kind that teaches us (much in the way the Demonstration Speech taught us) something detailed about a topic with which we are already familiar. For instance, we know George Washington was our first President, but a lot of people don't know much about his life prior to the military or serving in office. That would make for an interesting Informative Speech.
With an informative Speech, you’ll want to establish credibility by referencing and citing your materials. For example: "In the July 13, 2007 edition of the New York Times, John Smith said that George Washington suffered from depression as a young boy." It is critical that you discuss where you found your information in order to maintain your credibility.
A few parameters:
1. Your speech should be 5-10 minutes in length.
2. Feel free to incorporate visual aids. This is not mandatory, but it makes for a better presentation, as we learned last week.
3. Cite a minimum of two different sources for your materials. Do NOT use Wikipedia as a source. Please copy and paste these sources into the ‘comments’ area when submitting or submit as a paper. I will evaluate your sources.
4. Be sure to have a good introduction, a body that contains at least three main points (with appropriate supporting evidence) and a conclusion that appropriately wraps everything up.
As always, you may draft your speech word for word, but be very careful not to simply read from your paper! We want eye contact and emotion! Good luck with this assignment and have fun!
.
Introduction about topic Intelligence phaseWhat is the .docxMargenePurnell14
Introduction about topic
Intelligence phase
:
What is the problem (opportunity)
Classify the problem (opportunity)
structurt ,unstructuer ,semi structur
i think our search structure
Decompose the problem (opportunity).
The effects of noise on student performance
The effects of temprutur on student performance
The effects of light on student performance
.
Introduction A short summary is provided on the case subject and.docxMargenePurnell14
Introduction
A short summary is provided on the case subject and discuss Effat University ICT infrastructure sustainability in 3 pillars (Planet, People, and Profit).
Analysis
(due April 16)
Study the ICT infrastructure of Effat University and provide an analysis of its performance in terms of Green Measures of Performance (Green MoPs).
.
Introduction Illiteracy is the inability to read and write a.docxMargenePurnell14
Introduction
Illiteracy is the inability to read and write at an adequate level of proficiency that is critical for communication. Illiterate adults are unable to use printed and written information to function in the society so as to achieve one’s goals and also to develop one’s potential.
According to an international nonprofit ProLiteracy in 2003, there are 36 million adults in the United States alone. This potential includes a broad range of information-processing skills that one can use daily in school and at the community as a whole. Adult illiteracy has become a societal problem because illiterate people can never fully utilize writing and reading skills to make use of their fully potential in the world. The thesis statement of adult illiteracy involves reasons why it identified as a societal problem; the solutions proposed to solve this problem and the statistical information of adult literacy as the global societal problem.
Different types of society exist. These types of illiteracy are technological illiteracy, mathematical illiteracy, visual illiteracy, school illiteracy, community illiteracy and personal illiteracy. All these types of illiteracy are caused by various reasons. These reasons are summarized in the following discussion.
Causes of Adult Illiteracy
People are usually mistaken about illiteracy. School illiteracy is overvalued to the extent that many adults have started to believe the act of reading and writing are the only important things in school. It is this type of reasoning that make many adults less interested in wanting to gain more knowledge and see things beyond the negative images. This has become one of the main reasons why adult illiteracy has increased in the world over the last few years.
Another reason for adult illiteracy is the misuse of groups. Some people tend to agree with the argument that can make one believe that he or she is weak as a reader and he or she won’t be able to achieve literacy even after finishing school. This type of thinking lowers someone’s self-esteem and self-confidence meaning that the person will not bother to seek literacy help. People’s reading attitude are influential in literacy behaviors. According to McKenna in 2001, reading attitudes are influenced by factors such as a person’s social experiences with reading, one’s personal experiences, the cultural norms about reading, cultural norms and the learner’s preferences about reading. Attitude is associated with unwillingness to read. Every learning experience that a child has in school will at some point determine how that child will determine to learn. The learners who have had negative experiences in school will come to view school and learning in total as a bad experience that. This disengagement spreads over to adults. An adult learner who has negative perceptions about school would not want to be associated with it. These learners never get interested in educational process because they don’t see it as valuabl.
Intro to Quality Management Week 3Air Bag Recall.docxMargenePurnell14
Intro to Quality Management Week 3
Air Bag Recall
Assignment
Review the article “Blow Out” from this week’s reading assignment. This article pertains to the recall of air bag products. Assume you are the manager for a large automotive company that will be using air bags in your products. What risk assessment tools will you use in order to ensure that the product being installed into your vehicles meets safety standards in order to avoid a recall? Use your course materials and outside research to generate a solid analysis on why these methods would be helpful. Your analysis should be supported by research.
Directions for obtaining the file: Login to the Grantham University library by clicking on the Resources tab from the main page. You will then log into EBSCOHost. Once you have accessed the database, simply copy and paste the title of the article and press enter to search and you should now have the file accessible to review.
The requirements below must be met for your paper to be accepted and graded:
•Write between 750 – 1,250 words (approximately 3 – 5 pages) using Microsoft Word in APA style, see example below.
•Use font size 12 and 1” margins.
•Include cover page and reference page.
•At least 80% of your paper must be original content/writing.
•No more than 20% of your content/information may come from references.
•Use at least three references from outside the course material, one reference must be from EBSCOhost. Text book, lectures, and other materials in the course may be used, but are not counted toward the three reference requirement.
•Cite all reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) in the paper and list on a reference page in APA style.
Article
Section:
Features
Business: Cars
Keywords: Safety; Automotive industry; Driving; Accidents; Brain; Congress; Design; Regulations; Vehicles; Weight; Fariello; Cars
Air bags are meant to save lives. Now a massive recall shows how they sometimes can turn deadly
Forensic Investigator Sal Fariello, whose job is to deconstruct car crashes, has witnessed a catalog of carnage caused by air bags over the past two decades. In his collection, there is a photo of a woman who has been horribly scarred by an inflating air bag. There's an X-ray of a driver's broken wrists snapped in the "fling zone" of an air bag that mashed both arms from a 10-and-2 position into the car's roof. He can cite numerous drivers who suffered torn aortas or lacerated brain stems, all the result of being "punched" by an air bag inflating at 200 m.p.h. (322 km/h). "What's sitting in the front of the steering wheel is an explosive device," explains Fariello, the author of Airbag Injuries: Causation & Federal Regulation. "Nasty, unexpected events can occur."
None have been nastier than the injuries and deaths caused by exploding inflators in air bags made by automotive supplier Takata Corp., based in Tokyo. Its air bags have .
Intro to Quality Management Week 3Air Bag RecallAssignment.docxMargenePurnell14
Intro to Quality Management Week 3
Air Bag Recall
Assignment
Review the article “Blow Out” from this week’s reading assignment. This article pertains to the recall of air bag products. Assume you are the manager for a large automotive company that will be using air bags in your products. What risk assessment tools will you use in order to ensure that the product being installed into your vehicles meets safety standards in order to avoid a recall? Use your course materials and outside research to generate a solid analysis on why these methods would be helpful. Your analysis should be supported by research.
Directions for obtaining the file: Login to the Grantham University library by clicking on the Resources tab from the main page. You will then log into EBSCOHost. Once you have accessed the database, simply copy and paste the title of the article and press enter to search and you should now have the file accessible to review.
The requirements below must be met for your paper to be accepted and graded:
•Write between 750 – 1,250 words (approximately 3 – 5 pages) using Microsoft Word in APA style, see example below.
•Use font size 12 and 1” margins.
•Include cover page and reference page.
•At least 80% of your paper must be original content/writing.
•No more than 20% of your content/information may come from references.
•Use at least three references from outside the course material, one reference must be from EBSCOhost. Text book, lectures, and other materials in the course may be used, but are not counted toward the three reference requirement.
•Cite all reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) in the paper and list on a reference page in APA style.
Article
Section:
Features
Business: Cars
Keywords: Safety; Automotive industry; Driving; Accidents; Brain; Congress; Design; Regulations; Vehicles; Weight; Fariello; Cars
Air bags are meant to save lives. Now a massive recall shows how they sometimes can turn deadly
Forensic Investigator Sal Fariello, whose job is to deconstruct car crashes, has witnessed a catalog of carnage caused by air bags over the past two decades. In his collection, there is a photo of a woman who has been horribly scarred by an inflating air bag. There's an X-ray of a driver's broken wrists snapped in the "fling zone" of an air bag that mashed both arms from a 10-and-2 position into the car's roof. He can cite numerous drivers who suffered torn aortas or lacerated brain stems, all the result of being "punched" by an air bag inflating at 200 m.p.h. (322 km/h). "What's sitting in the front of the steering wheel is an explosive device," explains Fariello, the author of Airbag Injuries: Causation & Federal Regulation. "Nasty, unexpected events can occur."
None have been nastier than the injuries and deaths caused by exploding inflators in air bags made by automotive supplier Takata Corp., based in Tokyo. Its air bags have been blamed for killing five motorists in.
INTERVIEW WITH AMERICAN INDIAN COMMUNITY PRACTITIONERSResourcesD.docxMargenePurnell14
INTERVIEW WITH AMERICAN INDIAN COMMUNITY PRACTITIONERS
Resources
Discussion Participation Scoring Guide
.
Interview With American Indian Community Practitioners
Interview with Betty Laverdure
LAUNCH INTERVIEW
|
Transcript
Interviews With American Indian Community Practitioners
Interview with Denise Levy
LAUNCH INTERVIEW
|
Transcript
Values, communication, beliefs, economics, clothing, assumptions, and interpretation are all part of cultural dynamics. Understanding this, review the interviews with American Indian community practitioners. Listen for their expectations toward culturally appropriate ways in which to communicate and work with tribal communities.
Provide a synopsis of the interviews and address the following questions.
How do cultural dynamics impact collaboration?
What are the cultural dynamics at play?
How will you use the information to better understand working with American Indian communities?
.
Interview Each team member should interview an educator about his.docxMargenePurnell14
Interview:
Each team member should interview an educator about his or her philosophy of education.
Consider
the following questions regarding the challenges facing education today:
Where do they think education is headed in the future?
How have their own life experiences shaped their current philosophy regarding education?
Ask 6 questions including the two above.
.
IntroductionRisk management is critical to protect organization.docxMargenePurnell14
Introduction
:
Risk management is critical to protect organizational assets and to ensure compliance with laws and regulations. Many individuals and departments in organizations are involved in risk management; this is especially true when creating a risk management plan.
You, as an employee of YieldMore, are asked to create a risk management plan for the organization.
Scenario
:
In order to help protect the company and ensure it maintains compliance with laws and regulations, senior management at YieldMore has decided to develop a formal risk management plan.
As an employee of YieldMore, your team has been given the task of creating a risk management plan for the organization.
Tasks
:
You will initiate a kick-off meeting to discuss YieldMore’s risk management plan with your team.
Review the responsibilities associated with your assigned role.
Explain the specific responsibilities of your assigned role within the project.
Explain your role and the roles of the other team members to senior management.
.
Interview two different individuals regarding their positions in soc.docxMargenePurnell14
Interview two different individuals regarding their positions in society. Analyze their responses regarding:
Identify each person’s class, race, and gender.
What role has class, race, and gender played in their lives? How do you see these stratifiers as playing a role, even if the interviewee is unaware of it?
Apply one of the sociological perspectives (structural-functional, social-conflict, or symbolic-interaction) to the individuals’ lives. Why did you choose this particular perspective? How does it explain each person’s life and life choices?
What are some the benefits and limitations to using interview as a research methodology?
Analyze each person’s components of culture (language, symbols, material objects, and behaviors) and relate them to his/her stratified position in society.
Please post your completed paper in the
M5: Assignment 1 Dropbox
.
Assignment 1 Grading Criteria
Maximum Points
Described each person’s class, race, and gender.
40
Evaluated the role of social stratification.
.
Internet ExerciseVisit the homepage of Microsoft at www.micros.docxMargenePurnell14
Internet Exercise
Visit the homepage of Microsoft at www.microsoft.com. Access the annual report for 2012. Find the footnotes to the statements and read the disclosures in the note titled Contingencies. Regarding the events described, do you think Microsoft is providing adequate disclosure to its stockholders?
.
Interpersonal Violence Against Women, The Role of Men by Martin Schw.docxMargenePurnell14
Interpersonal Violence Against Women, The Role of Men by Martin Schwartz and Walter DeKeseredy.
Respond to questions 1-3 at the end of the reading.
1- How is ininate partner violence a "male" issue?
2- how dose a patriarchal society perpetuate violence against women?
3- what type of programming and interventions are necessary to stop violence against women?
.
Internet of Vehicles-ProjectIntroduction - what you plan t.docxMargenePurnell14
Internet of Vehicles-Project
Introduction - what you plan to accomplish and why, include an overview of the situation or
organization and what the situation/problem is that you intend to improve - usually 1-2 pages) Cite and support all content appropriately
o
Methodology is a research paper about Action Research, 2-3 pages (include reasons and justification for approach), minimum of five (5) professional references
Reserved for hifsa shaukat
.
Interview an ELL instructor from a Title I school about how assessme.docxMargenePurnell14
Interview an ELL instructor from a Title I school about how assessment is used for placement. You may interview one of the instructors that you have observed during your observations for this course. Inquire also about how placement is determined for both special education and gifted ELLs. Your questions might include (but should not be limited to) the following:
What are the indicators of exceptionality a classroom teacher should look for when a student also has a language barrier?
How can informal as well as formal assessment results factor into placement?
What role do parents and teachers have in placement?
What are some primary factors that are exhibited in underachievement that may not necessarily signal special education needs?
How are changes among individual ELL proficiency levels over the course of the school year accounted for?
How are diagnostic, formative, and summative assessments integrated for ELLs in mainstream classrooms?
What are the benefits of the SIOP protocol for native English speakers as well as those for whom English is an additional language?
Consolidate your findings in a 750-word essay, supporting your findings with at least three current sources from your readings and the GCU Library to support your reasoning.
.
INTERNATIONAL JOURNAL OF INFORMATION SECURITY SCIENCE Walid.docxMargenePurnell14
This document provides an overview of standards for information security risk management, highlighting challenges in implementing assessments and drivers for adopting standards. It analyzes frameworks including ISO 27001, ISO 27002, ISO 27005, ITIL, COBIT, Risk IT, Basel II, PCI DSS, and OCTAVE. While these frameworks provide guidance, there is no single best solution, and organizations face challenges selecting and properly implementing a framework given their unique needs and resources. The document concludes more research is needed to guide selection of the most appropriate framework.
International Finance Please respond to the followingBased on.docxMargenePurnell14
"International Finance"
Please respond to the following:
Based on the lecture and Webtext materials, address the following:
The IMF and World Bank are the world’s two leading lending institutions, but much of their monetary assistance disappears once it enters the banking systems of developing countries. Cite concrete evidence that supports the assertion that much assistance to developing countries is simply stolen by officials. Determine other main factors that account for the misuse of these funds.
.
This presentation was provided by Rebecca Benner, Ph.D., of the American Society of Anesthesiologists, for the second session of NISO's 2024 Training Series "DEIA in the Scholarly Landscape." Session Two: 'Expanding Pathways to Publishing Careers,' was held June 13, 2024.
Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...TechSoup
Whether you're new to SEO or looking to refine your existing strategies, this webinar will provide you with actionable insights and practical tips to elevate your nonprofit's online presence.
THE SACRIFICE HOW PRO-PALESTINE PROTESTS STUDENTS ARE SACRIFICING TO CHANGE T...indexPub
The recent surge in pro-Palestine student activism has prompted significant responses from universities, ranging from negotiations and divestment commitments to increased transparency about investments in companies supporting the war on Gaza. This activism has led to the cessation of student encampments but also highlighted the substantial sacrifices made by students, including academic disruptions and personal risks. The primary drivers of these protests are poor university administration, lack of transparency, and inadequate communication between officials and students. This study examines the profound emotional, psychological, and professional impacts on students engaged in pro-Palestine protests, focusing on Generation Z's (Gen-Z) activism dynamics. This paper explores the significant sacrifices made by these students and even the professors supporting the pro-Palestine movement, with a focus on recent global movements. Through an in-depth analysis of printed and electronic media, the study examines the impacts of these sacrifices on the academic and personal lives of those involved. The paper highlights examples from various universities, demonstrating student activism's long-term and short-term effects, including disciplinary actions, social backlash, and career implications. The researchers also explore the broader implications of student sacrifices. The findings reveal that these sacrifices are driven by a profound commitment to justice and human rights, and are influenced by the increasing availability of information, peer interactions, and personal convictions. The study also discusses the broader implications of this activism, comparing it to historical precedents and assessing its potential to influence policy and public opinion. The emotional and psychological toll on student activists is significant, but their sense of purpose and community support mitigates some of these challenges. However, the researchers call for acknowledging the broader Impact of these sacrifices on the future global movement of FreePalestine.
A Visual Guide to 1 Samuel | A Tale of Two HeartsSteve Thomason
These slides walk through the story of 1 Samuel. Samuel is the last judge of Israel. The people reject God and want a king. Saul is anointed as the first king, but he is not a good king. David, the shepherd boy is anointed and Saul is envious of him. David shows honor while Saul continues to self destruct.
Chapter wise All Notes of First year Basic Civil Engineering.pptxDenish Jangid
Chapter wise All Notes of First year Basic Civil Engineering
Syllabus
Chapter-1
Introduction to objective, scope and outcome the subject
Chapter 2
Introduction: Scope and Specialization of Civil Engineering, Role of civil Engineer in Society, Impact of infrastructural development on economy of country.
Chapter 3
Surveying: Object Principles & Types of Surveying; Site Plans, Plans & Maps; Scales & Unit of different Measurements.
Linear Measurements: Instruments used. Linear Measurement by Tape, Ranging out Survey Lines and overcoming Obstructions; Measurements on sloping ground; Tape corrections, conventional symbols. Angular Measurements: Instruments used; Introduction to Compass Surveying, Bearings and Longitude & Latitude of a Line, Introduction to total station.
Levelling: Instrument used Object of levelling, Methods of levelling in brief, and Contour maps.
Chapter 4
Buildings: Selection of site for Buildings, Layout of Building Plan, Types of buildings, Plinth area, carpet area, floor space index, Introduction to building byelaws, concept of sun light & ventilation. Components of Buildings & their functions, Basic concept of R.C.C., Introduction to types of foundation
Chapter 5
Transportation: Introduction to Transportation Engineering; Traffic and Road Safety: Types and Characteristics of Various Modes of Transportation; Various Road Traffic Signs, Causes of Accidents and Road Safety Measures.
Chapter 6
Environmental Engineering: Environmental Pollution, Environmental Acts and Regulations, Functional Concepts of Ecology, Basics of Species, Biodiversity, Ecosystem, Hydrological Cycle; Chemical Cycles: Carbon, Nitrogen & Phosphorus; Energy Flow in Ecosystems.
Water Pollution: Water Quality standards, Introduction to Treatment & Disposal of Waste Water. Reuse and Saving of Water, Rain Water Harvesting. Solid Waste Management: Classification of Solid Waste, Collection, Transportation and Disposal of Solid. Recycling of Solid Waste: Energy Recovery, Sanitary Landfill, On-Site Sanitation. Air & Noise Pollution: Primary and Secondary air pollutants, Harmful effects of Air Pollution, Control of Air Pollution. . Noise Pollution Harmful Effects of noise pollution, control of noise pollution, Global warming & Climate Change, Ozone depletion, Greenhouse effect
Text Books:
1. Palancharmy, Basic Civil Engineering, McGraw Hill publishers.
2. Satheesh Gopi, Basic Civil Engineering, Pearson Publishers.
3. Ketki Rangwala Dalal, Essentials of Civil Engineering, Charotar Publishing House.
4. BCP, Surveying volume 1
Beyond Degrees - Empowering the Workforce in the Context of Skills-First.pptxEduSkills OECD
Iván Bornacelly, Policy Analyst at the OECD Centre for Skills, OECD, presents at the webinar 'Tackling job market gaps with a skills-first approach' on 12 June 2024
Temple of Asclepius in Thrace. Excavation resultsKrassimira Luka
The temple and the sanctuary around were dedicated to Asklepios Zmidrenus. This name has been known since 1875 when an inscription dedicated to him was discovered in Rome. The inscription is dated in 227 AD and was left by soldiers originating from the city of Philippopolis (modern Plovdiv).
[removed]The Competitive Advantageof NationsMichael E.
1. [removed]
The Competitive Advantage
of Nations
Michael E. Porter
Harvard Business Review
90211
HBR
MARCH±APRIL 1990
The Competitive Advantage of Nations
Michael E. Porter
National prosperity is created, not inherited. It does of the
patterns of competitive success in ten leading
trading nations, contradict the conventional wisdomnot grow out
of a country's natural endowments, its
labor pool, its interest rates, or its currency's value, that guides
the thinking of many companies and na-
tional governments— and that is pervasive today inas classical
economics insists.
Anation'scompetitivenessdependsonthecapacity the United
States. (For more about the study, see the
2. insert “ Patterns of National Competitive Success.” )of its
industry to innovate and upgrade. Companies
gain advantage against the world's best competitors According
to prevailing thinking, labor costs, inter-
est rates, exchange rates, and economies of scale arebecause of
pressure and challenge. They benefit from
having strong domestic rivals, aggressive home-based the most
potent determinants of competitiveness. In
companies, the words of the day are merger, alliance,suppliers,
and demanding local customers.
In a world of increasingly global competition, na- strategic
partnerships, collaboration, and suprana-
tional globalization. Managers are pressing for moretions have
become more, not less, important. As the
basis of competition has shifted more and more to government
support for particular industries. Among
governments, there is a growing tendency to experi-the creation
and assimilation of knowledge, the role
of the nation has grown. Competitive advantage is ment with
various policies intended to promote na-
tional competitiveness— from efforts to managecreated and
sustained through a highly localized pro-
cess. Differences in national values, culture, eco- exchange
rates to new measures to manage trade to
policies to relax antitrust— which usually end upnomic
structures, institutions, and histories all
contribute to competitive success. There are striking only
undermining it. (See the insert “ What Is Na-
tional Competitiveness?” )differences in the patterns of
3. competitiveness in
every country; no nation can or will be competitive These
approaches, now much in favor in both
companies and governments, are flawed. They funda-in every or
even most industries. Ultimately, nations
succeed in particular industries because their home mentally
misperceive the true sources of competi-
tive advantage. Pursuing them, with all their short-environment
is the most forward-looking, dynamic,
and challenging. term appeal, will virtually guarantee that the
United
States— or any other advanced nation— neverThese
conclusions, the product of a four-year study
achieves real and sustainable competitive advantage.
We need a new perspective and new tools— an ap-
Harvard Business School professor Michael E. Porter is the
author proach to competitiveness that grows directly out of
of Competitive Strategy (Free Press, 1980) and Competitive Ad-
an analysis of internationally successful industries,vantage
(Free Press, 1985) and will publish The Competitive Ad-
without regard for traditional ideology or current in-vantage of
Nations (Free Press) in May 1990.
tellectual fashion. We need to know, very simply,Author's note:
Michael J. Enright, who served as project coordina-
tor for this study, has contributed valuable suggestions. what
works and why. Then we need to apply it.
Copyright q 1990 by the President and Fellows of Harvard
College. All rights reserved.
4. Patterns of National Competitive Success
To investigate why nations gain competitive advan- tries or
industry groups for detailed study; we examined
tage in particular industries and the implications for many more
in less detail. We went back as far as neces-
company strategy and national economies, I conducted sary to
understand how and why the industry began in
a four-year study of ten important trading nations: Den- the
nation, how it grew, when and why companies from
mark, Germany, Italy, Japan, Korea, Singapore, Sweden, the
nation developed international competitive advan-
Switzerland, the United Kingdom, and the United tage, and the
process by which competitive advantage
States. I was assisted by a team of more than 30 research- had
been either sustained or lost. The resulting case
ers, most of whom were natives of and based in the histories fall
short of the work of a good historian in
nation they studied. The researchers all used the same their
level of detail, but they do provide insight into
methodology. the development of both the industry and the
nation's
Three nations— the United States, Japan, and Ger- economy.
many— are the world's leading industrial powers. The We
chose a sample of industries for each nation that
other nations represent a variety of population sizes,
represented the most important groups of competitive
government policies toward industry, social philoso- industries
in the economy. The industries studied ac-
phies, geographical sizes, and locations. Together, the counted
for a large share of total exports in each nation:
ten nations accounted for fully 50% of total world ex- more than
20% of total exports in Japan, Germany, and
5. ports in 1985, the base year for statistical analysis. Switzerland,
for example, and more than 40% in South
Most previous analyses of national competitiveness Korea. We
studied some of the most famous and
have focused on single nation or bilateral comparisons.
important international success stories— German high-
By studying nations with widely varying characteristics
performance autos and chemicals, Japanese semi-con-
and circumstances, this study sought to separate the ductors and
VCRs, Swiss banking and pharmaceuticals,
fundamental forces underlying national competitive ad- Italian
footwear and textiles, U.S. commercial aircraft
vantage from the idiosyncratic ones. and motion pictures—
and some relatively obscure but
In each nation, the study consisted of two parts. The highly
competitive industries— South Korean pianos,
first identified all industries in which the nation's com- Italian
ski boots, and British biscuits. We also added a
panies were internationally successful, using available few
industries because they appeared to be paradoxes:
statistical data, supplementar y published sources, and Japanese
home demand for Western-character typewrit-
field interviews. We defined a nation's industry as inter - ers is
nearly nonexistent, for example, but Japan holds
nationally successful if it possessed competitive advan- a strong
export and foreign investment position in the
tage relative to the best worldwide competitors. Many industry.
We avoided industries that were highly depen-
measures of competitive advantage, such as reported dent on
natural resources: such industries do not form
profitability, can be misleading. We chose as the best the
backbone of advanced economies, and the capacity
indicators the presence of substantial and sustained ex- to
compete in them is more explicable using classical
6. ports to a wide array of other nations and/or significant theory.
We did, however, include a number of more
outbound foreign investment based on skills and assets
technologically intensive, natural-resource-related in-
created in the home country. A nation was considered dustries
such as newsprint and agricultural chemicals.
the home base for a company if it was either a locally The
sample of nations and industries offers a rich
owned, indigenous enterprise or managed autono- empirical
foundation for developing and testing the new
mously although owned by a foreign company or invest- theory
of how countries gain competitive advantage.
ors. We then created a profile of all the industries in The
accompanying article concentrates on the determi-
which each nation was internationally successful at nants of
competitive advantage in individual industries
three points in time: 1971, 1978, and 1985. The pattern and also
sketches out some of the study's overall impli-
of competitive industries in each economy was far from cations
for government policy and company strategy. A
random: the task was to explain it and how it had fuller
treatment in my book, The Competitive Advan-
changed over time. Of particular interest were the con- tage of
Nations, develops the theory and its implica-
nections or relationships among the nation's competi- tions in
greater depth and provides many additional
tive industries. examples. It also contains detailed descriptions
of the
In the second part of the study, we examined the nations we
studied and the future prospects for their
history of competition in particular industries to under-
economies.
stand how competitive advantage was created. On the —
Michael E. Porter
basis of national profiles, we selected over 100 indus-
7. 74 HARVARD BUSINESS REVIEW March–April 1990
cumbered by blinding assumptions or conventionalHow
Companies Succeed in
wisdom.International Markets
This is why innovators are often outsiders from a
different industry or a different country. Innovation
may come from a new company, whose founder hasAround the
world, companies that have achieved
international leadership employ strategies that differ a
nontraditional background or was simply not ap-
preciated in an older, established company. Or thefrom each
other in every respect. But while every
successful company will employ its own particular capacity for
innovation may come into an existing
company through senior managers who are new tostrategy, the
underlying mode of operation— the
character and trajectory of all successful compa- the particular
industry and thus more able to per-
ceive opportunities and more likely to pursue them.nies— is
fundamentally the same.
Companies achieve competitive advantage Or innovation may
occur as a company diversifies,
bringing new resources, skills, or perspectives to an-through
acts of innovation. They approach innova-
tion in its broadest sense, including both new other industry. Or
innovations may come from
8. another nation with different circumstances or dif-technologies
and new ways of doing things. They
perceive a new basis for competing or find better ferent ways of
competing.
With few exceptions, innovation is the result ofmeans for
competing in old ways. Innovation can be
manifested in a new product design, a new produc- unusual
effort. The company that successfully im-
plements a new or better way of competing pursuestion process,
a new marketing approach, or a new
way of conducting training. Much innovation is its approach
with dogged determination, often in the
face of harsh criticism and tough obstacles. In fact,mundane and
incremental, depending more on a cu-
mulation of small insights and advances than on a to succeed,
innovation usually requires pressure, ne-
cessity, and even adversity: the fear of loss oftensingle, major
technological breakthrough. It often
involves ideas that are not even “ new” — ideas that proves
more powerful than the hope of gain.
Once a company achieves competitive advantagehave been
around, but never vigorously pursued. It
always involves investments in skill and knowledge, through an
innovation, it can sustain it only through
relentless improvement. Almost any advantageas well as in
physical assets and brand reputations.
Some innovations create competitive advantage by can be
imitated. Korean companies have already
matched the ability of their Japanese rivals to mass-perceiving
9. an entirely new market opportunity or by
serving a market segment that others have ignored. produce
standard color televisions and VCRs; Brazil-
ian companies have assembled technology andWhen competitors
are slow to respond, such innova-
tion yields competitive advantage. For instance, in designs
comparable to Italian competitors in casual
leather footwear.industries such as autos and home electronics,
Japa-
nese companies gained their initial advantage by em-
Competitors will eventually and inevitably over-
take any company that stops improving and innovat-phasizing
smaller, more compact, lower capacity
models that foreign competitors disdained as less ing.
Sometimes early-mover advantages such as
customer relationships, scale economies in existingprofitable,
less important, and less attractive.
In international markets, innovations that yield technologies, or
the loyalty of distribution channels
are enough to permit a stagnant company to retaincompetitive
advantage anticipate both domestic and
foreign needs. For example, as international concern its
entrenched position for years or even decades. But
sooner or later, more dynamic rivals will find a wayfor product
safety has grown, Swedish companies
like Volvo, Atlas Copco, and AGA have succeeded to innovate
around these advantages or create a bet-
ter or cheaper way of doing things. Italian applianceby
anticipating the market opportunity in this area.
10. On the other hand, innovations that respond to con- producers,
which competed successfully on the basis
of cost in selling midsize and compact appliancescerns or
circumstances that are peculiar to the home
market can actually retard international competitive through
large retail chains, rested too long on this
initial advantage. By developing more differentiatedsuccess.
The lure of the huge U.S. defense market, for
instance, has diverted the attention of U.S. materials products
and creating strong brand franchises, Ger-
man competitors have begun to gain ground.and machine-tool
companies from attractive, global
commercial markets. Ultimately, the only way to sustain a
competitive
advantage is to upgrade it— to move to more sophisti-
Information plays a large role in the process of
innovation and improvement— information that ei- cated
types. This is precisely what Japanese auto-
makers have done. They initially penetrated foreignther is not
available to competitors or that they do
not seek. Sometimes it comes from simple invest- markets with
small, inexpensive compact cars of ad-
equate quality and competed on the basis of lowerment in
research and development or market re-
search; more often, it comes from effort and from labor costs.
Even while their labor-cost advantage
persisted, however, the Japanese companies were up-openness
and from looking in the right place unen-
11. HARVARD BUSINESS REVIEW March–April 1990 75
What Is National Competitiveness?
National competitiveness has become one of the cen- held view
that powerful unions undermine competitive
tral preoccupations of government and industry in every
advantage, unions are strong in Germany and Sweden—
nation. Yet for all the discussion, debate, and writing and both
countries boast internationally preeminent
on the topic, there is still no persuasive theory to explain
companies.
national competitiveness. What is more, there is not Clearly,
none of these explanations is fully satisfac-
even an accepted definition of the term “ competitive- tory;
none is sufficient by itself to rationalize the com-
ness” as applied to a nation. While the notion of a com-
petitive position of industries within a national border.
petitive company is clear, the notion of a competitive Each
contains some truth; but a broader, more complex
nation is not. set of forces seems to be at work.
Some see national competitiveness as a macroeco- The lack of a
clear explanation signals an even more
nomic phenomenon, driven by variables such as ex-
fundamental question. What is a “ competitive” nation
change rates, interest rates, and government deficits. in the first
place? Is a “ competitive” nation one where
But Japan, Italy, and South Korea have all enjoyed rap- every
company or industry is competitive? No nation
idly rising living standards despite budget deficits; Ger- meets
this test. Even Japan has large sectors of its econ-
many and Switzerland despite appreciating currencies; omy that
fall far behind the world‘s best competitors.
12. and Italy and Korea despite high interest rates. Is a “
competitive” nation one whose exchange rate
Others argue that competitiveness is a function of makes its
goods price competitive in international mar-
cheap and abundant labor. But Germany, Switzerland, kets?
Both Germany and Japan have enjoyed remarkable
and Sweden have all prospered even with high wages gains in
their standards of living— and experienced sus-
and labor shortages. Besides, shouldn't a nation seek tained
periods of strong currency and rising prices. Is a
higher wages for its workers as a goal of competitive- “
competitive” nation one with a large positive balance
ness? of trade? Switzerland has roughly balanced trade; Italy
Another view connects competitiveness with bounti- has a
chronic trade deficit— both nations enjoy strongly
ful natural resources. But how, then, can one explain rising
national income. Is a “ competitive” nation one
the success of Germany, Japan, Switzerland, Italy, and with low
labor costs? India and Mexico both have low
South Korea— countries with limited natural resources? wages
and low labor costs— but neither seems an attrac-
More recently, the argument has gained favor that tive
industrial model.
competitiveness is driven by government policy: tar- The only
meaningful concept of competitiveness at
geting, protection, import promotion, and subsidies the national
level is productivity. The principal goal of
have propelled Japanese and South Korean auto, steel, a nation
is to produce a high and rising standard of living
shipbuilding, and semiconductor industries into global for its
citizens. The ability to do so depends on the
preeminence. But a closer look reveals a spotty record.
productivity with which a nation's labor and capital
13. In Italy, government intervention has been ineffectual — are
employed. Productivity is the value of the output
but Italy has experienced a boom in world export share
produced by a unit of labor or capital. Productivity de-
second only to Japan. In Germany, direct government pends on
both the quality and features of products
intervention in exporting industries is rare. And even (which
determine the prices that they can command)
in Japan and South Korea, government's role in such and the
efficiency with which they are produced. Pro-
important industries as facsimile machines, copiers, ro-
ductivity is the prime determinant of a nation's long-
botics, and advanced materials has been modest; some run
standard of living; it is the root cause of national
of the most frequently cited examples, such as sewing per capita
income. The productivity of human resources
machines, steel, and shipbuilding, are now quite dated.
determines employee wages; the productivity with
A final popular explanation for national competitive- which
capital is employed determines the return it
ness is differences in management practices, including earns for
its holders.
management-labor relations. The problem here, how- A nation's
standard of living depends on the capacity
ever, is that different industries require different ap- of its
companies to achieve high levels of productivity—
proaches to management. The successful management and to
increase productivity over time. Sustained pro-
practices governing small, private, and loosely orga- ductivity
growth requires that an economy continually
nized Italian family companies in footwear, textiles, upgrade
itself. A nation's companies must relentlessly
and jewelry, for example, would produce a management
improve productivity in existing industries by raising
disaster if applied to German chemical or auto compa- product
14. quality, adding desirable features, improving
nies, Swiss pharmaceutical makers, or American air- product
technology, or boosting production efficiency.
craft producers. Nor is it possible to generalize about They must
develop the necessary capabilities to com-
management-labor relations. Despite the commonly pete in more
and more sophisticated industry segments,
76 HARVARD BUSINESS REVIEW March–April 1990
where productivity is generally high. They must finally
performance cars, while Korean exports are all compacts
develop the capability to compete in entirely new, so- and
subcompacts. In many industries and segments of
phisticated industries. industries, the competitors with true
international
International trade and foreign investment can both competiti ve
advantage are based in only a few nations.
improve a nation's productivity as well as threaten it. Our
search, then, is for the decisive characteristic of
They support rising national productivity by allowing a nation
that allows its companies to create and sustain
a nation to specialize in those industries and segments
competitive advantage in particular fields— the search
of industries where its companies are more productive is for the
competitive advantage of nations. We are par-
and to import where its companies are less productive. ticularly
concerned with the determinants of inter-
No nation can be competitive in everything. The ideal national
success in technology- and skill-intensive
is to deploy the nation's limited pool of human and segments
and industries, which underpin high and ris-
other resources into the most productive uses. Even ing
15. productivity.
those nations with the highest standards of living have Classical
theory explains the success of nations in
many industries in which local companies are uncom- particular
industries based on so-called factors of pro-
petitive. duction such as land, labor, and natural resources. Na -
Yet international trade and foreign investment also tions gain
factor-based comparative advantage in
can threaten productivity growth. They expose a na- industries
that make intensive use of the factors they
tion's industries to the test of international standards possess in
abundance. Classical theory, however, has
of productivity. An industry will lose out if its produc- been
overshadowed in advanced industries and econo-
tivity is not sufficiently higher than foreign rivals‘ to mies by
the globalization of competition and the power
offset any advantages in local wage rates. If a nation of
technology.
loses the ability to compete in a range of high-productiv- A new
theory must recognize that in modern interna-
ity/high-wage industries, its standard of living is threat- tional
competition, companies compete with global
ened. strategies involving not only trade but also foreign in-
Defining national competitiveness as achieving a vestment.
What a new theory must explain is why a
trade surplus or balanced trade per se is inappropriate. nation
provides a favorable home base for companies
The expansion of exports because of low wages and a that
compete internationally. The home base is the na-
weak currency, at the same time that the nation imports tion in
which the essential competitive advantages of
sophisticated goods that its companies cannot produce the
enterprise are created and sustained. It is where a
competitively, may bring trade into balance or surplus
16. company's strategy is set, where the core product and
but lowers the nation‘s standard of living. Competitive- process
technology is created and maintained, and
ness also does not mean jobs. It's the type of jobs, not where the
most productive jobs and most advanced
just the ability to employ citizens at low wages, that is skills are
located. The presence of the home base in a
decisive for economic prosperity. nation has the greatest
positive influence on other
Seeking to explain “ competitiveness” at the national linked
domestic industries and leads to other benefits
level, then, is to answer the wrong question. What we in the
nation's economy. While the ownership of the
must understand instead is the determinants of produc- company
is often concentrated at the home base, the
tivity and the rate of productivity growth. To find an-
nationality of shareholders is secondary.
swers, we must focus not on the economy as a whole A new
theory must move beyond comparative advan-
but on specific industries and industry segments. We tage to the
competitive advantage of a nation. It must
must understand how and why commercially viable reflect a
rich conception of competition that includes
skills and technology are created, which can only be segmented
markets, differentiated products, technology
fully understood at the level of particular industries. It
differences, and economies of scale. A new theory must
is the outcome of the thousands of struggles for compet- go
beyond cost and explain why companies from some
itive advantage against foreign rivals in particular seg- nations
are better than others at creating advantages
ments and industries, in which products and processes based on
quality, features, and new product innovation.
are created and improved, that underpins the process A new
theory must begin from the premise that compe-
17. of upgrading national productivity. tition is dynamic and
evolving; it must answer the ques-
When one looks closely at any national economy, tions: Why do
some companies based in some nations
there are striking differences among a nation's indus- innovate
more than others? Why do some nations pro-
tries in competitive success. International advantage vide an
environment that enables companies to improve
is often concentrated in particular industry segments. and
innovate faster than foreign rivals?
German exports of cars are heavily skewed toward high- —
Michael E. Porter
HARVARD BUSINESS REVIEW March–April 1990 77
grading. They invested aggressively to build large ruthlessly
pursue improvements, seeking an ever-
more sophisticated source of competitive advantage?modern
plants to reap economies of scale. Then they
became innovators in process technology, pioneering Why are
they able to overcome the substantial barri-
ers to change and innovation that so often accom-just-in-time
production and a host of other quality
and productivity practices. These process improve- pany
success?
The answer lies in four broad attributes of a nation,ments led to
better product quality, better repair re-
cords, and better customer-satisfaction ratings than attributes
that individually and as a system consti-
tute the diamond of national advantage, the playingforeign
18. competitors had. Most recently, Japanese au-
tomakers have advanced to the vanguard of product field that
each nation establishes and operates for its
industries. These attributes are.technology and are introducing
new, premium brand
names to compete with the world's most prestigious
1. Factor Conditions. The nation's position in fac-passenger
cars.
tors of production, such as skilled labor or infra-The example of
the Japanese automakers also illus-
structure, necessary to compete in a giventrates two additional
prerequisites for sustaining
industry.competitive advantage. First, a company must adopt
2. Demand Conditions. The nature of home-mar-a global
approach to strategy. It must sell its product
ket demand for the industry's product or service.worldwi de,
under its own brand name, through inter-
3. Related and Supporting Industries. The pres-national
marketing channels that it controls. A truly
ence or absence in the nation of supplier indus-global approach
may even require the company to
tries and other related industries that arelocate production or
R&D facilities in other nations
internationally competitive.to take advantage of lower wage
rates, to gain or
4. Firm Strategy, Structure, and Rivalry. The con-improve
market access, or to take advantage of for-
ditions in the nation governing how companieseign technology.
Second, creating more sustainable
are created, organized, and managed, as well asadvantages often
19. means that a company must make
the nature of domestic rivalry.its existing advantage obsolete—
even while it is still
an advantage. Japanese auto companies recognized These
determinants create the national environ-
this; either they would make their advantage obso- ment in
which companies are born and learn how
lete, or a competitor would do it for them. to compete. (See the
diagram “ Determinants of Na-
As this example suggests, innovation and change tional
Competitive Advantage.” ) Each point on the
are inextricably tied together. But change is an unnat-
ural act, particularly in successful companies; power-
ful forces are at work to avoid and defeat it. Past
approaches become institutionalized in standard op-
Determinants of National
erating procedures and management controls. Train-
Competitive Advantageing emphasizes the one correct way to
do anything;
the construction of specialized, dedicated facilities
solidifies past practice into expensive brick and mor -
tar; the existing strategy takes on an aura of invinci-
bility and becomes rooted in the company culture.
Successful companies tend to develop a bias for
predictability and stability; they work on defending
what they have. Change is tempered by the fear that
there is much to lose. The organization at all levels
filters out information that would suggest new
approaches, modifications, or departures from the
norm. The internal environment operates like an
immune system to isolate or expel “ hostile” individ-
uals who challenge current directions or established
thinking. Innovation ceases; the company becomes
20. stagnant; it is only a matter of time before aggressive
competitors overtake it.
The Diamond of National Advantage
Firm Strategy,
Structure,
and Rivalry
Factor
Conditions
Demand
Conditions
Related and
Supporting
Industries
Why are certain companies based in certain na-
tions capable of consistent innovation? Why do they
78 HARVARD BUSINESS REVIEW March–April 1990
diamond— and the diamond as a system— affects es- to
imitate— and they require sustained investment
to create.sential ingredients for achieving internatio nal com-
petitive success: the availability of resources and Nations
succeed in industries where they are par-
ticularly good at factor creation. Competitive advan-skills
necessary for competitive advantage in an in-
21. dustry; the information that shapes the opportuni- tage results
from the presence of world-class
institutions that first create specialized factors andties that
companies perceive and the directions in
which they deploy their resources and skills; the then
continually work to upgrade them. Denmark
has two hospitals that concentrate in studying andgoals of the
owners, managers, and individuals in
companies; and most important, the pressures on treating
diabetes— and a world-leading export posi-
tion in insulin. Holland has premier research insti-companies to
invest and innovate. (See the insert
“ How the Diamond Works: The Italian Ceramic Tile tutes in
the cultivation, packaging, and shipping of
flowers, where it is the world's export leader.Industry.” )
When a national environment permits and sup- What is not so
obvious, however, is that selective
disadvantages in the more basic factors can prod aports the most
rapid accumulation of specialized
assets and skills— sometimes simply because of company to
innovate and upgrade— a disadvantage
in a static model of competition can become an ad-greater effort
and commitment— companies gain a
competitive advantage. When a national environ- vantage in a
dynamic one. When there is an ample
supply of cheap raw materials or abundant labor,ment affords
better ongoing information and insight
into product and process needs, companies gain a companies can
simply rest on these advantages and
22. often deploy them inefficiently. But when
companiescompetitive advantage. Finally, when the national
environment pressures companies to innovate and face a
selective disadvantage, like high land costs,
labor shortages, or the lack of local raw materials,invest,
companies both gain a competitive advantage
and upgrade those advantages over time. they must innovate and
upgrade to compete.
Implicit in the oft-repeated Japanese statement,Factor
Conditions. According to standard eco-
nomic theory, factors of production— labor, land, “ We are an
island nation with no natural resources,”
is the understanding that these deficiencies havenatural
resources, capital, infrastructure— will deter-
mine the flow of trade. A nation will export those only served to
spur Japan's competitive innovation.
Just-in-time production, for example, economized ongoods that
make most use of the factors with which
it is relatively well endowed. This doctrine, whose prohibitively
expensive space. Italian steel producers
in the Brescia area faced a similar set of disadvan-origins date
back to Adam Smith and David Ricardo
and that is embedded in classical economics, is at tages: high
capital costs, high energy costs, and no
local raw materials. Located in Northern Lombardy,best
incomplete and at worst incorrect.
In the sophisticated industries that form the back- these
privately owned companies faced staggering
logistics costs due to their distance from southernbone of any
23. advanced economy, a nation does not
inherit but instead creates the most important fac- ports and the
inefficiencies of the state-owned Italian
transportation system. The result: they pioneeredtors of
production— such as skilled human resources
or a scientific base. Moreover, the stock of factors
technologically advanced minimills that require
only modest capital investment, use less energy, em-that a
nation enjoys at a particular time is less im-
portant than the rate and efficiency with which it ploy scrap
metal as the feedstock, are efficient at
small scale, and permit producers to locate close tocreates,
upgrades, and deploys them in particular in-
dustries. sources of scrap and end-use customers. In other
words, they converted factor disadvantages into com-The most
important factors of production are those
that involve sustained and heavy investment and are petitive
advantage.
Disadvantages can become advantages only underspecialized.
Basic factors, such as a pool of labor or
a local raw-material source, do not constitute an ad- certain
conditions. First, they must send companies
proper signals about circumstances that will spreadvantage in
knowledge-intensive industries. Compa-
nies can access them easily through a global strategy to other
nations, thereby equipping them to innovate
in advance of foreign rivals. Switzerland, the nationor
circumvent them through technology. Contrary
24. to conventional wisdom, simply having a general that
experienced the first labor shortages after World
War II, is a case in point. Swiss companies respondedwork force
that is high school or even college
educated represents no competitive advantage in to the
disadvantage by upgrading labor productivity
and seeking higher value, more sustainable marketmodern
international competition. To support com-
petitive advantage, a factor must be highly special- segments.
Companies in most other parts of the
world, where there were still ample workers, focusedized to an
industry's particular needs— a scientific
institute specialized in optics, a pool of venture capi - their
attention on other issues, which resulted in
slower upgrading.tal to fund software companies. These factors
are
more scarce, more difficult for foreign competitors The second
condition for transforming disadvan-
HARVARD BUSINESS REVIEW March–April 1990 79
How the Diamond Works:
The Italian Ceramic Tile Industry
In 1987, Italian companies were world leaders in the other
technically sophisticated companies. As the tile
production and export of ceramic tiles, a $10 billion industry
began to grow and prosper, many engineers and
industry. Italian producers, concentrated in and around skilled
workers gravitated to the successful companies.
25. the small town of Sassuolo in the Emilia-Romagna re-
gion, accounted for about 30% of world production and The
Emerging Italian Tile Cluster
almost 60% of world exports. The Italian trade surplus
Initially, Italian tile producers were dependent on for-
that year in ceramic tiles was about $1.4 billion.
eignsourcesof raw materialsandproductiontechnology.
The development of the Italian ceramic tile industry's
In the 1950s, the principal raw materials used to make
competitive advantage illustrates how the diamond of
tiles were kaolin (white) clays. Since there were red- but
national advantage works. Sassuolo's sustainable com-
no white-clay deposits near Sassuolo, Italian producers
petitive advantage in ceramic tiles grew not from any
had to import the clays from the United Kingdom. Tile-
static or historical advantage but from dynamism and
making equipment was also imported in the 1950s
change. Sophisticated and demanding local buyers,
and 1960s: kilns from Germany, America, and France;
strong and unique distribution channels, and intense
presses for forming tiles from Germany. Sassuolo tile
rivalry among local companies created constant pres-
makers had to import even simple glazing machines.
sure for innovation. Knowledge grew quickly from con-
Over time, the Italian tile producers learned how to
26. tinuous experimentation and cumulative production
modify imported equipment to fit local circumstances:
experience. Private ownership of the companies and
red versus white clays, natural gas versus heavy oil. As
loyalty to the community spawned intense commit-
process technicians from tile companies left to start
ment to invest in the industry.
their own equipment companies, a local machinery in-
Tile producers benefited as well from a highly de-
dustry arose in Sassuolo. By 1970, Italian companies
veloped set of local machinery suppliers and other sup-
had emerged as world-class producers of kilns and
porting industries, producing materials, services, and
presses; the earlier situation had exactly reversed: they
infrastructure. The presence of world-class, Italian-
were exporting their red-clay equipment for foreigners
related industries also reinforced Italian strength in
to use with white clays.
tiles. Finally, the geographic concentration of the entire
The relationship between Italian tile and equipment
cluster supercharged the whole process. Today foreign
manufacturers was a mutually supporting one, made
companies compete against an entire subculture. The
even more so by close proximity. In the mid-1980s, there
27. organic nature of this system represents the most sus-
were some 200 Italian equipment manufacturers; more
tainable advantage of Sassuolo's ceramic tile companies.
than 60% were located in the Sassuolo area. The equip-
ment manufacturers competed fiercely for local busi-The
Origins of the Italian Industry
ness, and tile manufacturers benefited from better prices
Tile production in Sassuolo grew out of the earthen- and more
advanced equipment than their foreign rivals.
ware and crockery industry, whose history traces back As the
emerging tile cluster grew and concentrated
to the thirteenth century. Immediately after World War in the
Sassuolo region, a pool of skilled workers and
II, there were only a handful of ceramic tile manufactur-
technicians developed, including engineers, production
ers in and around Sassuolo, all serving the local market
specialists, maintenance workers, service technicians,
exclusively. and design personnel. The industry's geographic
con-
Demand for ceramic tiles within Italy began to grow centration
encouraged other supporting companies to
dramatically in the immediate postwar years, as the form,
offering molds, packaging materials, glazes, and
reconstruction of Italy triggered a boom in building ma-
transportation services. An array of small, specialized
terials of all kinds. Italian demand for ceramic tiles was
consulting companies emerged to give advice to tile
particularly great due to the climate, local tastes, and producers
on plant design, logistics, and commercial,
building techniques. advertising, and fiscal matters.
Because Sassuolo was in a relatively prosperous part With its
28. membership concentrated in the Sassuolo
of Italy, there were many who could combine the mod- area,
Assopiastrelle, the ceramic tile industry associa-
est amount of capital and necessary organizational tion, began
offering services in areas of common inter-
skills to start a tile company. In 1955, there were 14 est: bulk
purchasing, foreign-market research, and
Sassuolo area tile companies; by 1962, there were 102.
consulting on fiscal and legal matters. The growing tile
The new tile companies benefited from a local pool of cluster
stimulated the formation of a new, specialized
mechanically trained workers. The region around Sassu- factor-
creating institution: in 1976, a consortium of the
olo was home to Ferrari, Maserati, Lamborghini, and
80 HARVARD BUSINESS REVIEW March–April 1990
University of Bologna, regional agencies, and the ce- equipment
manufacturers exceeded domestic sales; in
ramic industry association founded the Centro Cera- 1988,
exports represented almost 80% of total sales.
mico di Bologna, which conducted process research and
Working together, tile manufacturers and equipment
product analysis. manufacturers made the next important
breakthrough
during the mid- and late 1970s: the development of
Sophisticated Home Demand materials-handling equipment that
transformed tile
manufacture from a batch process to a continuous pro-
By the mid-1960s, per-capita tile consumption in Italy
29. cess. The innovation reduced high labor costs— which
was considerably higher than in the rest of the world.
had been a substantial selective factor disadvantage fac-
The Italian market was also the world's most sophisti-
ing Italian tile manufacturers.
cated. Italian customers, who were generally the first
The common perception is that Italian labor costs
to adopt new designs and features, and Italian producers,
were lower during this period than those in the United
who constantly innovated to improve manufacturing
States and Germany. In those two countries, however,
methods and create new designs, progressed in a mutu-
different jobs had widely different wages. In Italy, wages
ally reinforcing process.
for different skill categories were compressed, and work
The uniquely sophisticated character of domestic de-
rules constrained manufacturers from using overtime
mand also extended to retail outlets. In the 1960s, spe-
or multiple shifts. The restriction proved costly: once
cialized tile showrooms began opening in Italy. By 1985,
cool, kilns are expensive to reheat and are best run
there were roughly 7,600 specialized showrooms han-
continuously. Because of this factor disadvantage, the
dling approximately 80% of domestic sales, far more
30. Italian companies were the first to develop continuous,
than in other nations. In 1976, the Italian company
automated production.
Piemme introduced tiles by famous designers to gain
distribution outlets and to build brand name awareness
Internationalization
among consumers. This innovation drew on another
related industry, design services, in which Italy was By 1970,
Italian domestic demand had matured. The
world leader, with over $10 billion in exports. stagnant Italian
market led companies to step up their
efforts to pursue foreign markets. The presence of re-
Sassuolo Rivalry lated and supporting Italian industries helped
in the
export drive. Individual tile manufacturers began adver -
The sheer number of tile companies in the Sassuolo
tising in Italian and foreign home-design and archi-
area created intense rivalry. News of product and pro-
tectural magazines, publications with wide global
cess innovations spread rapidly, and companies seeking
circulation among architects, designers, and consumers.
technological, design, and distribution leadership had
This heightened awareness reinforced the quality image
to improve constantly.
of Italian tiles. Tile makers were also able to capitalize
Proximity added a personal note to the intense rivalry.
on Italy's leading world export positions in related in-
31. All of the producers were privately held, most were fam-
dustries like marble, building stone, sinks, washbasins,
ily run. The owners all lived in the same area, knew each
furniture, lamps, and home appliances.
other, and were the leading citizens of the same towns.
Assopiastrelle, the industry association, established
trade-promotion offices in the United States in 1980,Pressures
to Upgrade
in Germany in 1984, and in France in 1987. It organized
In the early 1970s, faced with intense domestic ri- elaborate
trade shows in cities ranging from Bologna to
valry, pressure from retail customers, and the shock of Miami
and ran sophisticated advertising. Between 1980
the 1973 energy crisis, Italian tile companies struggled and
1987, the association spent roughly $8 million to
to reduce gas and labor costs. These efforts led to a promote
Italian tiles in the United States.
technological breakthrough, the rapid single-firing pro-
— Michael J. Enright and Paolo Tenticess, in which the
hardening process, material trans-
formation, and glaze-fixing all occurred in one pass
through the kiln. A process that took 225 employees Michael J.
Enright, a doctoral student in business economics
using the double-firing method needed only 90 employ- at the
Harvard Business School, performed numerous research
ees using single-firing roller kilns. Cycle time dropped and
supervisory tasks for The Competitive Advantage of Na-
from 16 to 20 hours to only 50 to 55 minutes. tions. Paolo Tenti
was responsible for the Italian part of re-
The new, smaller, and lighter equipment was also search
32. undertaken for the book. He is a consultant in strategy
and finance for Monitor Company and Analysis F.A.–
Milan.easier to export. By the early 1980s, exports from Italian
HARVARD BUSINESS REVIEW March–April 1990 81
tages into advantages is favorable circumstances More
important than the mix of segments per se is
the nature of domestic buyers. A nation's companieselsewhere
in the diamond— a consideration that ap-
plies to almost all determinants. To innovate, com- gain
competitive advantage if domestic buyers are
the world's most sophisticated and demanding buy-panies must
have access to people with appropriate
skills and have home-demand conditions that send ers for the
product or service. Sophisticated, de-
manding buyers provide a window into advancedthe right
signals. They must also have active domes-
tic rivals who create pressure to innovate. Another customer
needs; they pressure companies to meet
high standards; they prod them to improve, to inno-precondition
is company goals that lead to sustained
commitment to the industry. Without such a com- vate, and to
upgrade into more advanced segments.
As with factor conditions, demand conditions pro-mitment and
the presence of active rivalry, a com-
pany may take an easy way around a disadvantage vide
advantages by forcing companies to respond to
tough challenges.rather than using it as a spur to innovation.
33. For example, U.S. consumer-electronics compa- Especially
stringent needs arise because of local
values and circumstances. For example, Japanesenies, faced
with high relative labor costs, chose to
leave the product and production process largely un- consumers,
who live in small, tightly packed homes,
must contend with hot, humid summers and high-changed and
move labor-intensive activities to Tai-
wan and other Asian countries. Instead of upgrading cost
electrical energy— a daunting combination of
circumstances. In response, Japanese companiestheir sources of
advantage, they settled for labor-cost
parity. On the other hand, Japanese rivals, confronted have
pioneered compact, quiet air-conditioning units
powered by energy-saving rotary compressors. In in-with
intense domestic competition and a mature
home market, chose to eliminate labor through auto- dustry
after industry, the tightly constrained require-
ments of the Japanese market have forced companiesmation.
This led to lower assembly costs, to products
with fewer components and to improved quality and to innovate,
yielding products that are kei-haku-tan-
sho— light, thin, short, small— and that are interna-
reliability. Soon Japanese companies were building
assembly plants in the United States— the place U.S. tionally
accepted.
Local buyers can help a nation's companies gaincompanies had
fled.
34. Demand Conditions. It might seem that the advantage if their
needs anticipate or even shape
those of other nations— if their needs provide ongo-
globalization of competition would diminish the im-
portance of home demand. In practice, however, this ing “
early-warning indicators” of global market
trends. Sometimes anticipatory needs emerge be-is simply not
the case. In fact, the composition and
character of the home market usually has a dispro- cause a
nation's political values foreshadow needs
that will grow elsewhere. Sweden's long-standingportionate
effect on how companies perceive, inter-
pret, and respond to buyer needs. Nations gain concern for
handicapped people has spawned an in-
creasingly competitive industry focused on specialcompetitive
advantage in industries where the home
demand gives their companies a clearer or earlier needs.
Denmark's environmentalism has led to suc-
cess for companies in water-pollution control equip-picture of
emerging buyer needs, and where de-
manding buyers pressure companies to innovate ment and
windmills.
More generally, a nation's companies can antici-faster and
achieve more sophisticated competitive
advantages than their foreign rivals. The size of home pate
global trends if the nation's values are spread-
ing— that is, if the country is exporting its valuesdemand
proves far less significant than the character
of home demand. and tastes as well as its products. The
35. international
success of U.S. companies in fast food and creditHome-demand
conditions help build competitive
advantage when a particular industry segment is cards, for
example, reflects not only the American
desire for convenience but also the spread of theselar ger or
more visible in the domestic market than
in foreign markets. The larger market segments in a tastes to the
rest of the world. Nations export their
values and tastes through media, through trainingnation receive
the most attention from the nation‘s
companies; companies accord smaller or less desir- foreigners,
through political influence, and through
the foreign activities of their citizens and companies.able
segments a lower priority. A good example is
hydraulic excavators, which represent the most Related and
Supporting Industries. The third
broad determinant of national advantage is thewidely used type
of construction equipment in the
Japanese domestic market— but which comprise a far presence
in the nation of related and supporting in-
dustries that are internationally competitive. Inter-smaller
proportion of the market in other advanced
nations. This segment is one of the few where there nationally
competitive home-based suppliers create
advantages in downstream industries in severalare vigorous
Japanese international competitors and
where Caterpillar does not hold a substantial share ways. First,
they deliver the most cost-effective in-
36. puts in an efficient, early, rapid, and sometimes pref-of the
world market.
82 HARVARD BUSINESS REVIEW March–April 1990
erential way. Italian gold and silver jewelry keyboards grows
out of success in acoustic instru-
ments combined with a strong position in consumercompanies
lead the world in that industry in part
because other Italian companies supply two-thirds electronics.
Firm Strategy, Structure, and Rivalry. Nationalof the world's
jewelry-making and precious-metal
recycling machinery. circumstances and context create strong
tendencies
in how companies are created, organized, and man-Far more
significant than mere access to compo-
nents and machinery, however, is the advantage that aged, as
well as what the nature of domestic rivalry
will be. In Italy, for example, successful internationalhome-
based related and supporting industries pro-
vide in innovation and upgrading— an advantage competitors
are often small or medium-sized compa-
nies that are privately owned and operated like ex-based on
close working relationships. Suppliers and
end-users located near each other can take advantage tended
families; in Germany, in contrast, companies
tend to be strictly hierarchical in organization andof short lines
of communication, quick and constant
37. flow of information, and an ongoing exchange of management
practices, and top managers usually
have technical backgrounds.ideas and innovations. Companies
have the opportu-
nity to influence their suppliers‘ technical efforts and No one
managerial system is universally ap-
propriate— notwithstanding the current fascinationcan serve
as test sites for R&D work, accelerating
the pace of innovation. with Japanese management.
Competitiveness in a
specific industry results from convergence of theThe illustration
of “ The Italian Footwear Cluster”
offers a graphic example of how a group of close-by,
management practices and organizational modes fa-
vored in the country and the sources of competitivesupporting
industries creates competitive advantage
in a range of interconnected industries that are all advantage in
the industry. In industries where Italian
companies are world leaders— such as lighting, furni-
internationally competitive. Shoe producers, for in-
stance, interact regularly with leather manufacturers ture,
footwear, woolen fabrics, and packaging ma-
chines— a company strategy that emphasizes focus,on new
styles and manufacturing techniques and
learn about new textures and colors of leather when customized
products, niche marketing, rapid change,
and breathtaking flexibility fits both the dynamicsthey are still
on the drawing boards. Leather manu-
facturers gain early insights into fashion trends, help- of the
38. industry and the character of the Italian man-
agement system. The German management system,ing them to
plan new products. The interaction is
mutually advantageous and self-reinforcing, but it in contrast,
works well in technical or engineering-
oriented industries— optics, chemicals, complicateddoes not
happen automatically: it is helped by prox-
imity, but occurs only because companies and suppli-
machinery— where complex products demand preci-
sion manufacturing, a careful development process,ers work at
it.
The nation's companies benefit most when the after-sale service,
and thus a highly disciplined man-
agement structure. German success is much rarer insuppliers
are, themselves, global competitors. It is
ultimately self-defeating for a company or country consumer
goods and services where image marketing
and rapid new-feature and model turnover are im-to create “
captive” suppliers who are totally depen-
dent on the domestic industry and prevented from portant to
competition.
Countries also differ markedly in the goals thatserving foreign
competitors. By the same token, a
nation need not be competitive in all supplier indus- companies
and individuals seek to achieve. Com-
pany goals reflect the characteristics of national capi-tries for
its companies to gain competitive advantage.
Companies can readily source from abroad materials, tal
markets and the compensation practices for
39. managers. For example, in Germany and Switzer-components,
or technologies without a major effect
on innovation or performance of the industry's prod- land,
where banks comprise a substantial part of the
nation's shareholders, most shares are held for long-ucts. The
same is true of other generalized tech-
nologies— like electronics or software— where the term
appreciation and are rarely traded. Companies
do well in mature industries, where ongoing invest-industry
represents a narrow application area.
Home-based competitiveness in related industries ment in R&D
and new facilities is essential but re-
turns may be only moderate. The United States isprovides
similar benefits: information flow and tech-
nical interchange speed the rate of innovation and at the
opposite extreme, with a large pool of risk
capital but widespread trading of public companiesupgrading. A
home-based related industry also in-
creases the likelihood that companies will embrace and a strong
emphasis by investors on quarterly and
annual share-price appreciation. Management com-new skills,
and it also provides a source of entrants
who will bring a novel approach to competing. The pensation is
heavily based on annual bonuses tied to
individual results. America does well in relativelySwiss success
in pharmaceuticals emerged out of pre-
vious international success in the dye industry, for new
industries, like software and biotechnology, or
ones where equity funding of new companies feedsexample;
40. Japanese dominance in electronic musical
HARVARD BUSINESS REVIEW March–April 1990 83
The Italian Footwear Cluster
Molds
Models
Ski Boots
Parts of
Footwear
Processed
Leather
Leather-working
Machinery
Injection-
molding
Machinery
Specialized
Machine
Tools
Woodworking
Equipment
41. Design
Services
`Apres-ski
Boots
Athletic
Footwear
Leather
Footwear
Leather
Handbags,
Gloves
Leather
Clothing
active domestic rivalry, like specialty electronics and
individuals and companies, and the prestige it at-
taches to certain industries, guide the flow of capitalservices.
Strong pressures leading to underinvest-
ment, however, plague more mature industries. and human
resources— which, in turn, directly af-
fects the competitive performance of certain indus-Individual
motivation to work and expand skills
is also important to competitive advantage. Out- tries. Nations
tend to be competitive in activities
that people admire or depend on— the activities fromstanding
talent is a scarce resource in any nation.
A nation's success largely depends on the types of which the
42. nation's heroes emerge. In Switzerland, it
is banking and pharmaceuticals. In Israel, the highesteducation
its talented people choose, where they
choose to work, and their commitment and effort. callings have
been agriculture and defense-related
fields. Sometimes it is hard to distinguish betweenThe goals a
nation's institutions and values set for
84 HARVARD BUSINESS REVIEW March–April 1990
cause and effect. Attaining international success can arguably
the most important because of the power-
fully stimulating effect it has on all the others.make an industry
prestigious, reinforcing its advan-
tage. Conventional wisdom argues that domestic com-
petition is wasteful: it leads to duplication of effortThe
presence of strong local rivals is a final, and
powerful, stimulus to the creation and persistence and prevents
companies from achieving economies
of scale. The “ right solution” is to embrace one orof
competitive advantage. This is true of small coun-
tries, like Switzerland, where the rivalry among its two national
champions, companies with the scale
and strength to tackle foreign competitors, and topharmaceutical
companies, Hoffmann-La Roche,
Ciba-Geigy, and Sandoz, contributes to a leading guarantee
them the necessary resources, with the
government's blessing. In fact, however, most na-worldwide
position. It is true in the United States
43. in the computer and software industries. Nowhere tional
champions are uncompetitive, although heav-
ily subsidized and protected by their government. Inis the role
of fierce rivalry more apparent than in
Japan, where there are 112 companies competing in many of the
prominent industries in which there is
only one national rival, such as aerospace and tele-machine
tools, 34 in semiconductors, 25 in audio
equipment, 15 in cameras— in fact, there are usually
communications, government has played a large role
in distorting competition.double figures in the industries in
which Japan boasts
global dominance. (See the table “ Estimated Number Static
efficiency is much less important than
dynamic improvement, which domestic rivalryof Japanese
Rivals in Selected Industries.” ) Among
all the points on the diamond, domestic rivalry is uniquely
spurs. Domestic rivalry, like any rivalry,
creates pressure on companies to innovate and im-
prove. Local rivals push each other to lower costs,
improve quality and service, and create new products
Estimated Number of Japanese Rivals in and processes. But
unlike rivalries with foreign com-
Selected Industries petitors, which tend to be analytical and
distant,
local rivalries often go beyond pure economic or busi -Air
Conditioners 13
ness competition and become intensely personal.Audio
Equipment 25
44. Automobiles 9 Domestic rivals engage in active feuds; they
compete
Cameras 15 not only for market share but also for people, for
Car Audio 12 technical excellence, and perhaps most
important,Carbon Fibers 7
for “ bragging rights.” One domestic rival‘s
successConstruction Equipment* 15
proves to others that advancement is possible andCopiers 14
Facsimile Machines 10 often attracts new rivals to the industry.
Companies
Large-scale Computers 6 often attribute the success of foreign
rivals to “ un-
Lift Trucks 8 fair” advantages. With domestic rivals, there are
noMachine Tools 112
excuses.Microwave Equipment 5
Geographic concentration magnifies the power ofMotorcycles 4
Musical Instruments 4 domestic rivalry. This pattern is
strikingly common
Personal Computers 16 around the world: Italian jewelry
companies are lo-
Semiconductors 34 cated around two towns, Arezzo and Valenza
Po;Sewing Machines 20
cutlery companies in Solingen, West Germany andShipbuilding†
33
Seki, Japan; pharmaceutical companies in Basel,Steel‡ 5
Synthetic Fibers 8 Switzerland; motorcycles and musical
instruments
Television Sets 15 in Hamamatsu, Japan. The more localized the
rivalry,
45. Truck and Bus Tires 5 the more intense. And the more intense,
the better.Trucks 11
Another benefit of domestic rivalry is the pressureTypewriters
14
it creates for constant upgrading of the sources ofVideocassette
Recorders 10
competitive advantage. The presence of domestic
Sources: Field interviews; Nippon Kogyo Shinbun, Nippon
Kogyo competitors automatically cancels the types of ad-
Nenkan, 1987; Yano Research, Market Share Jitan, 1987;
researchers‘
vantage that come from simply being in a particularestimates.
nation— factor costs, access to or preference in the*The
number of companies varied by product area. The smallest
number, 10, produced bulldozers. Fifteen companies produced
shovel home market, or costs to foreign competitors who
trucks, truck cranes, and asphalt-paving equipment. There were
20 import into the market. Companies are forced tocompanies in
hydraulic excavators, a product area where Japan was
move beyond them, and as a result, gain more sus-particularly
strong.
†²Six companies had annual production exports in excess of
10,000 tainable advantages. Moreover, competing domestic
tons. rivals will keep each other honest in obtaining gov-
ernment support. Companies are less likely to get
HARVARD BUSINESS REVIEW March–April 1990 85
‡ Integrated companies.
46. hooked on the narcotic of government contracts or better
products because of the rapid pace of new prod-
uct development that is driven by intense domesticcreeping
industry protectionism. Instead, the indus-
try will seek— and benefit from— more constructive rivalry
among hundreds of Italian companies. Do-
mestic rivalry also promotes the formation of relatedforms of
government support, such as assistance in
opening foreign markets, as well as investments in and
supporting industries. Japan's world-leading
group of semiconductor producers, for instance, hasfocused
educational institutions or other specialized
factors. spawned world-leading Japanese semiconductor-
equipment manufacturers.Ironically, it is also vigorous domestic
competition
that ultimately pressures domestic companies to The effects can
work in all directions: sometimes
world-class suppliers become new entrants in thelook at global
markets and toughens them to succeed
in them. Particularly when there are economies of industry they
have been supplying. Or highly sophis-
ticated buyers may themselves enter a supplier in-scale, local
competitors force each other to look out-
ward to foreign markets to capture greater efficiency dustry,
particularly when they have relevant skills
and view the new industry as strategic. In the caseand higher
profitability. And having been tested by
fierce domestic competition, the stronger companies of the
47. Japanese robotics industry, for example, Mat-
sushita and Kawasaki originally designed robots forare well
equipped to win abroad. If Digital Equipment
can hold its own against IBM, Data General, Prime, internal use
before beginning to sell robots to others.
Today they are strong competitors in the roboticsand Hewlett-
Packard, going up against Siemens or
Machines Bull does not seem so daunting a prospect. industry.
In Sweden, Sandvik moved from specialty
steel into rock drills, and SKF moved from specialty
steel into ball bearings.
Another effect of the diamond's systemic nature
is that nations are rarely home to just one competi-The Diamond
as a System
tive industry; rather, the diamond creates an en-
vironment that promotes clusters of competitiveEach of these
four attributes defines a point on
the diamond of national advantage; the effect of one industries.
Competitive industries are not scattered
helter-skelter throughout the economy but are usu-point often
depends on the state of others. Sophisti-
cated buyers will not translate into advanced prod- ally linked
together through vertical (buyer-seller) or
horizontal (common customers, technology, chan-ucts, for
example, unless the quality of human
resources permits companies to meet buyer needs. nels)
relationships. Nor are clusters usually scattered
physically; they tend to be concentrated geographi-Selective
disadvantages in factors of production will
48. not motivate innovation unless rivalry is vigorous cally. One
competitive industry helps to create an-
other in a mutually reinforcing process. Japan'sand company
goals support sustained investment.
At the broadest level, weaknesses in any one deter- strength in
consumer electronics, for example, drove
its success in semiconductors toward the memoryminant will
constrain an industry's potential for ad-
vancement and upgrading. chips and integrated circuits these
products use. Japa-
nese strength in laptop computers, which contrastsBut the points
of the diamond are also self-reinforc-
ing: they constitute a system. Two elements, domes- to limited
success in other segments, reflects the
base of strength in other compact, portable productstic rivalry
and geographic concentration, have
especially great power to transform the diamond into and
leading expertise in liquid-crystal display gained
in the calculator and watch industries.a system— domestic
rivalry because it promotes im-
provement in all the other determinants and geo- Once a cluster
forms, the whole group of industries
becomes mutually supporting. Benefits flow forward,graphic
concentration because it elevates and
magnifies the interaction of the four separate influ- backward,
and horizontally. Aggressive rivalry in one
industry spreads to others in the cluster, throughences.
The role of domestic rivalry illustrates how the spin-offs,
through the exercise of bargaining power,
49. and through diversification by established compa-diamond
operates as a self-reinforcing system. Vigor-
ous domestic rivalry stimulates the development of nies. Entry
from other industries within the cluster
spurs upgrading by stimulating diversity in R&D ap-unique
pools of specialized factors, particularly if
the rivals are all located in one city or region: the proaches and
facilitating the introduction of new
strategies and skills. Through the conduits of suppli-University
of California at Davis has become the
world's leading center of wine-making research, ers or
customers who have contact with multiple
competitors, information flows freely and innova-working
closely with the California wine industry.
Active local rivals also upgrade domestic demand tions diffuse
rapidly. Interconnections within the
cluster, often unanticipated, lead to perceptions ofin an
industry. In furniture and shoes, for example,
Italian consumers have learned to expect more and new ways of
competing and new opportunities. The
86 HARVARD BUSINESS REVIEW March–April 1990
cluster becomes a vehicle for maintaining diversity that reward
quality, and pursuing other policies that
magnify the forces of the diamond, the Japanese gov-and
overcoming the inward focus, inertia, inflexibil-
ity, and accommodation among rivals that slows or ernment
50. accelerates the pace of innovation. But like
government officials anywhere, at their worst Japa-blocks
competitive upgrading and new entry.
nese bureaucrats can make the same mistakes: at-
tempting to manage industry structure, protecting
the market too long, and yielding to political pressure
to insulate inefficient retailers, farmers, distributors,The Role
of Government
and industrial companies from competition.
It is not hard to understand why so many govern-In the
continuing debate over the competitiveness
of nations, no topic engenders more argument or ments make
the same mistakes so often in pursuit
of national competitiveness: competitive time forcreates less
understanding than the role of the gov-
ernment. Many see government as an essential companies and
political time for governments are
fundamentally at odds. It often takes more than ahelper or
supporter of industry, employing a host
of policies to contribute directly to the competitive decade for
an industry to create competitive advan-
tage; the process entails the long upgrading of
humanperformance of strategic or target industries. Others
accept the “ free market” view that the operation of skills,
investing in products and processes, building
clusters, and penetrating foreign markets. In the casethe
economy should be left to the workings of the
invisible hand. of the Japanese auto industry, for instance,
compa-
nies made their first faltering steps toward exportingBoth views
51. are incorrect. Either, followed to its
logical outcome, would lead to the permanent ero- in the
1950s— yet did not achieve strong interna-
tional positions until the 1970s.sion of a country‘s competitive
capabilities. On one
hand, advocates of government help for industry fre- But in
politics, a decade is an eternity. Conse-
quently, most governments favor policies that offerquently
propose policies that would actually hurt
companies in the long run and only create the de- easily
perceived short-term benefits, such as subsid-
ies, protection, and arranged mergers— the very poli-mand for
more helping. On the other hand, advocates
of a diminished government presence ignore the cies that retard
innovation. Most of the policies that
would make a real difference either are too slow andlegitimate
role that government plays in shaping
the context and institutional structure surrounding require too
much patience for politicians or, even
worse, carry with them the sting of short-term pain.companies
and in creating an environment that stim-
ulates companies to gain competitive advantage. Deregulating a
protected industry, for example, will
lead to bankruptcies sooner and to stronger, moreGovernment's
proper role is as a catalyst and chal-
lenger; it is to encourage— or even push— companies
competitive companies only later.
Policies that convey static, short-term cost advan-to raise their
aspirations and move to higher levels of
52. competitive performance, even though this process tages but
that unconsciously undermine innovation
and dynamism represent the most common and mostmay be
inherently unpleasant and difficult. Govern-
ment cannot create competitive industries; only profound error
in government industrial policy. In a
desire to help, it is all too easy for governments tocompanies
can do that. Government plays a role that
is inherently partial, that succeeds only when work- adopt
policies such as joint projects to avoid “ waste-
ful” R&D that undermine dynamism and competi-ing in tandem
with favorable underlying conditions
in the diamond. Still, government's role of transmit- tion. Yet
even a 10% cost saving through economies
of scale is easily nullified through rapid product andting and
amplifying the forces of the diamond is a
powerful one. Government policies that succeed are process
improvement and the pursuit of volume in
global markets— something that such policies under-those that
create an environment in which compa-
nies can gain competitive advantage rather than mine.
There are some simple, basic principles that gov-those that
involve government directly in the pro-
cess, except in nations early in the development pro- ernments
should embrace to play the proper support-
ive role for national competitiveness: encouragecess. It is an
indirect, rather than a direct, role.
Japan‘s government, at its best, understands this change,
promote domestic rivalry, stimulate innova-
53. tion. Some of the specific policy approaches to guiderole better
than anyone— including the point that
nations pass through stages of competitive develop- nations
seeking to gain competitive advantage in-
clude the following.ment and that government‘s appropriate role
shifts
as the economy progresses. By stimulating early de- Focus on
specialized factor creation. Govern-
ment has critical responsibilities for fundamentalsmand for
advanced products, confronting industries
with the need to pioneer frontier technology through like the
primary and secondary education systems,
basic national infrastructure, and research in areassymbolic
cooperative projects, establishing prizes
HARVARD BUSINESS REVIEW March–April 1990 87
of broad national concern such as health care. Yet
competitiveness arena today is the call for more co-
operative research and industry consortia. Operatingthese kinds
of generalized efforts at factor creation
rarely produce competitive advantage. Rather, the on the belief
that independent research by rivals is
wasteful and duplicative, that collaborative effortsfactors that
translate into competitive advantage are
advanced, specialized, and tied to specific industries achieve
economies of scale, and that individual com-
panies are likely to underinvest in R&D because theyor industry
54. groups. Mechanisms such as specialized
apprenticeship programs, research efforts in univer- cannot reap
all the benefits, governments have em-
braced the idea of more direct cooperation. In thesities
connected with an industry, trade association
activities, and, most important, the private invest- United
States, antitrust laws have been modified to
allow more cooperative R&D; in Europe, megapro-ments of
companies ultimately create the factors
that will yield competitive advantage. jects such as ESPRIT, an
information-technology
project, bring together companies from several coun-Avoid
intervening in factor and currency mar-
kets. By intervening in factor and currency markets, tries.
Lurking behind much of this thinking is the
fascination of Western governments with— and fun-
governments hope to create lower factor costs or
a favorable exchange rate that will help companies damental
misunderstanding of— the countless coop-
erative research projects sponsored by the Ministrycompete
more effectively in international markets.
Evidence from around the world indicates that these of
International Trade and Industry (MITI), projects
that appear to have contributed to Japan's competi-policies—
such as the Reagan administration's dollar
devaluation— are often counterproductive. They tive rise.
But a closer look at Japanese cooperative projectswork against
the upgrading of industry and the search
55. for more sustainable competitive advantage. suggests a different
story. Japanese companies partic-
ipate in MITI projects to maintain good relationsThe contrasting
case of Japan is particularly in-
structive, although both Germany and Switzerland with MITI, to
preserve their corporate images, and
to hedge the risk that competitors will gain from thehave had
similar experiences. Over the past 20 years,
the Japanese have been rocked by the sudden Nixon project—
largely defensive reasons. Companies rarely
contribute their best scientists and engineers to co-currency
devaluation shock, two oil shocks, and,
most recently, the yen shock— all of which forced operative
projects and usually spend much more on
their own private research in the same field. Typi-Japanese
companies to upgrade their competitive ad-
vantages. The point is not that government should cally, the
government makes only a modest financial
contribution to the project.pursue policies that intentionally
drive up factor
costs or the exchange rate. Rather, when market The real value
of Japanese cooperative research is
to signal the importance of emerging technical areasforces
create rising factor costs or a higher exchange
rate, government should resist the temptation to and to stimulate
proprietary company research. Co-
operative projects prompt companies to explore newpush them
back down.
Enforce strict product, safety, and environmental fields and
56. boost internal R&D spending because
companies know that their domestic rivals are in-standards.
Strict government regulations can pro-
mote competitive advantage by stimulating and up- vestigating
them.
Under certain limited conditions, cooperative re-grading
domestic demand. Stringent standards for
product performance, product safety, and environ- search can
prove beneficial. Projects should be in
areas of basic product and process research, not inmental impact
pressure companies to improve qual-
ity, upgrade technology, and provide features that subjects
closely connected to a company‘s proprie-
tary sources of advantage. They should constituterespond to
consumer and social demands. Easing
standards, however tempting, is counterproductive. only a
modest portion of a company's overall research
program in any given field. Cooperative researchWhen tough
regulations anticipate standards that
will spread internationally, they give a nation's com- should be
only indirect, channeled through indepen-
dent organizations to which most industry partici-panies a head
start in developing products and ser-
vices that will be valuable elsewhere. Sweden's strict pants have
access. Organizational structures, like
university labs and centers of excellence, reducestandards for
environmental protection have pro-
moted competitive advantage in many industries. management
problems and minimize the risk to ri-
57. valry. Finally, the most useful cooperative projectsAtlas Copco,
for example, produces quiet compres-
sors that can be used in dense urban areas with often involve
fields that touch a number of industries
and that require substantial R&D investments.minimal
disruption to residents. Strict standards,
however, must be combined with a rapid and stream- Promote
goals that lead to sustained invest-
ment. Government has a vital role in shaping thelined
regulatory process that does not absorb re-
sources and cause delays. goals of investors, managers, and
employees through
policies in various areas. The manner in which capi-Sharply
limit direct cooperation among industry
rivals. The most pervasive global policy fad in the tal markets
are regulated, for example, shapes the
88 HARVARD BUSINESS REVIEW March–April 1990
incentives of investors and, in turn, the behavior of seek to open
markets wherever a nation has competi-
tive advantage and should actively address emergingcompanies.
Government should aim to encourage
sustained investment in human skills, in innovation, industries
and incipient problems.
Where government finds a trade barrier in anotherand in
physical assets. Perhaps the single most pow-
erful tool for raising the rate of sustained investment nation, it
58. should concentrate its remedies on disman-
tling barriers, not on regulating imports or exports.in industry is
a tax incentive for long-term (five years
or more) capital gains restricted to new investment in In the
case of Japan, for example, pressure to acceler-
ate the already rapid growth of manufactured importscorporate
equity. Long-term capital gains incentives
should also be applied to pension funds and other is a more
effective approach than a shift to managed
trade. Compensatory tariffs that punish companiescurrently
untaxed investors, who now have few rea-
sons not to engage in rapid trading. for unfair trade practices
are better than market quo-
tas. Other increasingly important tools to open mar-Deregulate
competition. Regulation of competi-
tion through such policies as maintaining a state kets are
restrictions that prevent companies in
offending nations from investing in acquisitions ormonopoly,
controlling entry into an industry, or fix-
ing prices has two strong negative consequences: it production
facilities in the host country— thereby
blocking the unfair country's companies from usingstifles
rivalry and innovation as companies become
preoccupied with dealing with regulators and pro- their
advantage to establish a new beachhead that is
immune from sanctions.tecting what they already have; and it
makes the
industry a less dynamic and less desirable buyer or Any of these
remedies, however, can backfire. It is
59. virtually impossible to craft remedies to unfair tradesupplier.
Deregulation and privatization on their
own, however, will not succeed without vigorous practices that
avoid both reducing incentives for do-
mestic companies to innovate and export and harm-domestic
rivalry— and that requires, as a corollary,
a strong and consistent antitrust policy. ing domestic buyers.
The aim of remedies should be
adjustments that allow the remedy to disappear.Enforce strong
domestic antitrust policies. A
strong antitrust policy— especially for horizontal
mergers, alliances, and collusive behavior— is funda-
mental to innovation. While it is fashionable today
to call for mergers and alliances in the name of global- The
Company Agenda
ization and the creation of national champions, these
often undermine the creation of competitive advan- Ultimately,
only companies themselves can
achieve and sustain competitive advantage. To dotage. Real
national competitiveness requires gov-
ernments to disallow mergers, acquisitions, and so, they must
act on the fundamentals described
above. In particular, they must recognize the centralalliances
that involve industry leaders. Furthermore,
the same standards for mergers and alliances should role of
innovation— and the uncomfortable truth that
innovation grows out of pressure and challenge. Itapply to both
domestic and foreign companies. Fi-
nally, government policy should favor internal entry, takes
leadership to create a dynamic, challenging
60. environment. And it takes leadership to recognizeboth domestic
and international, over acquisition.
Companies should, however, be allowed to acquire the all -too-
easy escape routes that appear to offer a
path to competitive advantage, but are actuallysmall companies
in related industries when the
move promotes the transfer of skills that could ulti- short-cuts
to failure. For example, it is tempting to
rely on cooperative research and development proj-mately
create competitive advantage.
Reject managed trade. Managed trade represents ects to lower
the cost and risk of research. But they
can divert company attention and resources froma growing and
dangerous tendency for dealing with
the fallout of national competitiveness. Orderly mar-
proprietary research efforts and will all but eliminate
the prospects for real innovation.keting agreements, voluntary
restraint agreements,
or other devices that set quantitative targets to divide
Competitive advantage arises from leadership that
harnesses and amplifies the forces in the diamondup markets are
dangerous, ineffective, and often
enormously costly to consumers. Rather than pro- to promote
innovation and upgrading. Here are just
a few of the kinds of company policies that willmoting
innovation in a nation's industries, managed
trade guarantees a market for inefficient companies. support
that effort:
61. Create pressures for innovation. A companyGovernment trade
policy should pursue open mar-
ket access in every foreign nation. To be effective, should seek
out pressure and challenge, not avoid
them. Part of strategy is to take advantage of thetrade policy
should not be a passive instrument; it
cannot respond only to complaints or work only for home nation
to create the impetus for innovation.
To do that, companies can sell to the most sophisti-those
industries that can muster enough political
clout; it should not require a long history of injury or cated and
demanding buyers and channels; seek out
those buyers with the most difficult needs; establishserve only
distressed industries. Trade policy should
HARVARD BUSINESS REVIEW March–April 1990 89
norms that exceed the toughest regulatory hurdles ous domestic
rivalry. Especially in the United States
and Europe today, managers are wont to complainor product
standards; source from the most advanced
suppliers; treat employees as permanent in order to about
excessive competition and to argue for mergers
and acquisitions that will produce hoped-for econo-stimulate
upgrading of skills and productivity.
Seek out the most capable competitors as motiva- mies of scale
and critical mass. The complaint is only
natural— but the argument is plain wrong. Vigoroustors. To
motivate organizational change, capable
62. competitors and respected rivals can be a common domestic
rivalry creates sustainable competitive ad-
vantage. Moreover, it is better to grow internation-enemy. The
best managers always run a little scared;
they respect and study competitors. To stay dynamic, ally than
to dominate the domestic market. If a
company wants an acquisition, a foreign one thatcompanies
must make meeting challenge a part of
the organization's norms. For example, lobbying can speed
globalization and supplement home-based
advantages or offset home-based disadvantages isagainst strict
product standards signals the organiza-
tion that company leadership has diminished aspira- usually far
better than merging with leading domes-
tic competitors.tions. Companies that value stability, obedient
customers, dependent suppliers, and sleepy competi- Globalize
to tap selective advantages in other na-
tions. In search of “ global” strategies, many compa-tors are
inviting inertia and, ultimately, failure.
Establish early-warning systems. Early-warning nies today
abandon their home diamond. To be sure,
adopting a global perspective is important to creatingsignals
translate into early-mover advantages. Com-
panies can take actions that help them see the signals
competitive advantage. But relying on foreign activi-
ties that supplant domestic capabilities is always aof change and
act on them, thereby getting a jump
on the competition. For example, they can find and second-best
63. solution. Innovating to offset local factor
disadvantages is better than outsourcing; developingserve those
buyers with the most anticipatory needs;
investigate all emerging new buyers or channels; find domestic
suppliers and buyers is better than relying
solely on foreign ones. Unless the critical underpin-places
whose regulations foreshadow emerging regu-
lations elsewhere; bring some outsiders into the nings of
competitiveness are present at home, com-
panies will not sustain competitive advantage in themanagement
team; maintain ongoing relationships
with research centers and sources of talented people. long run.
The aim should be to upgrade home-base
capabilities so that foreign activities are selectiveImprove the
national diamond. Companies have
a vital stake in making their home environment a and
supplemental only to over-all competitive ad-
vantage.better platform for international success. Part of a
company's responsibility is to play an active role in The correct
approach to globalization is to tap se-
lectively into sources of advantage in other nations'forming
clusters and to work with its home-nation
buyers, suppliers, and channels to help them upgrade diamonds.
For example, identifying sophisticated
buyers in other countries helps companies under-and extend
their own competitive advantages. To
upgrade home demand, for example, Japanese musi- stand
different needs and creates pressures that will
stimulate a faster rate of innovation. No matter howcal
64. instrument manufacturers, led by Yamaha,
Kawai, and Suzuki, have established music schools. favorable
the home diamond, moreover, important
research is going on in other nations. To take advan-Similarly,
companies can stimulate and support local
suppliers of important specialized inputs— including tage of
foreign research, companies must station
high-quality people in overseas bases and mount aencouraging
them to compete globally. The health
and strength of the national cluster will only enhance credible
level of scientific effort. To get anything
back from foreign research ventures, companiesthe company's
own rate of innovation and upgrading.
In nearly every successful competitive industry, must also allow
access to their own ideas—
recognizing that competitive advantage comes fromleading
companies also take explicit steps to create
specialized factors like human resources, scientific continuous
improvement, not from protecting to-
day‘s secrets.knowledge, or infrastructure. In industries like
wool
cloth, ceramic tiles, and lighting equipment, Italian Use
alliances only selectively. Alliances with
foreign companies have become another managerialindustry
associations invest in market information,
process technology, and common infrastructure. fad and cure-
all: they represent a tempting solution
to the problem of a company wanting the advantagesCompanies
can also speed innovation by putting
65. their headquarters and other key operations where of foreign
enterprises or hedging against risk, without
giving up independence. In reality, however, whilethere are
concentrations of sophisticated buyers,
important suppliers, or specialized factor-creating alliances can
achieve selective benefits, they always
exact significant costs: they involve coordinatingmechanisms,
such as universities or laboratories.
Welcome domestic rivalry. To compete globally, two separate
operations, reconciling goals with an
independent entity, creating a competitor, and givinga company
needs capable domestic rivals and vigor-
90 HARVARD BUSINESS REVIEW March–April 1990
up profits. These costs ultimately make most alli- The Role of
Leadership
ances short-term transitional devices, rather than
stable, long-term relationships. Too many companies and top
managers misper-
Most important, alliances as a broad-based strategy ceive the
nature of competition and the task before
will only ensure a company's mediocrity, not its in- them by
focusing on improving financial perfor-
ternational leadership. No company can rely on an- mance,
soliciting government assistance, seeking
other outside, independent company for skills and stability, and
reducing risk through alliances and
assets that are central to its competitive advantage. mergers.
Alliances are best used as a selective tool, employed Today's
66. competitive realities demand leadership.
on a temporary basis or involving noncore activities. Leaders
believe in change; they energize their organi-
Locate the home base to support competitive ad- zations to
innovate continuously; they recognize the
vantage. Among the most important decisions for importance of
their home country as integral to their
multinational companies is the nation in which to competitive
success and work to upgrade it. Most
locate the home base for each distinct business. A important,
leaders recognize the need for pressure
company can have different home bases for distinct and
challenge. Because they are willing to encourage
businesses or segments. Ultimately, competitive ad-
appropriate— and painful— government policies and
vantage is created at home: it is where strategy is regulations,
they often earn the title “ statesmen,”
set, the core product and process technology is cre- although
few see themselves that way. They are pre-
ated, and a critical mass of production takes place. pared to
sacrifice the easy life for difficulty and, ulti-
The circumstances in the home nation must support mately,
sustained competitive advantage. That must
innovation; otherwise the company has no choice be the goal,
for both nations and companies: not just
but to move its home base to a country that stimu- surviving,
but achieving international competitive-
lates innovation and that provides the best environ- ness.
ment for global competitiveness. There are no half- And not just
once, but continuously.
measures: the management team must move as well.
HARVARD BUSINESS REVIEW March–April 1990 91