Question

In an extensive study that was published in a book entitled The Competitive Advantage of Nations, Michael Porter concluded that four broad attributes of a nation shape the environment in which local firms compete, and that these attributes promote or impede the creation of competitive advantage. Identify and describe the four attributes advanced by Porter. What did Porter conclude from his analysis?

Answer 1

Step-by-step explanation:

American economist Michael Porter (1947) in his "The Competitive Advantage of Nations" (1989) concludes that the competitiveness of a nation relies on the ability of its industry to innovate and update. Porter schemed a diamond diagram where he pointed out the 4 main characteristics of a country favorable to the development of industry:

• Factor conditions: production factors that involve sustained and large investments and are specialized are the most important factors.

• Related and supporting industries: The flow of information and the technological exchange fasten creativity and upgrade.

• Strategy, structure, and rivalry: competitiveness in a particular industry results from a convergence of country-favored management practices and organizational models.

• Demand conditions: nations are gaining competitive advantage in sectors where consumers are pushing companies to innovate.