How convincing is Porters model of national competitive advantage in Essay - 3

How convincing is Porters model of national competitive advantage in explaining the characteristics and performance of the business systems of major economies - Essay Example There are some critical factors within this model such as demand and factor conditions, firm’s strategy, competition and structure, chance factors, supporting and related industries, and government intervention. Porter’s model of national competitiveness is regarded as an appropriate framework for evaluating firm’s competitive position. On the contrary, this model is not considered as a suitable framework from economist’s perspective. It is stated as a model that helps to determine competitive position of a company rather than a country or nation. This study would reveal real world scenarios where Porters model was beneficial enough to analyze competitive position of nations. The study has been divided into various subsections where theoretical model will be elaborated along with its application on nations. Michael Porter designed a new model to analyze the reason behind firms belonging to specific nations happen to design better strategies in comparison to other firms. Porter took into consideration ten countries such as UK, Germany, USA, South Korea, Japan, Italy, Denmark, Sweden, Singapore and Switzerland (Davies and Ellis, 2000). The main objective for designing this model was to identify why some regions possesses competitive advantage compared to rest. Diamond model was designed by Michael Porter was to predict sector’s or country’s competitive advantage. This particular model has been elaborated in figure1. As per figure1, this model helps in designing a structure required for achieving competitive position in a sector. The factors of this model play a significant role in context of achieving competitiveness for long-term (Smit, 2010). All the factors represented within diamond model are determinants of sectors. These factors encompass skills and assets which are important for competitive advantage of an industry. It even consists of information that provides guidance