Diamond model
The diamond model and Porter's Diamond or national competitive advantages mentioned (original: Competitive Advantage of Nations ) is one of the economist Michael Porter developed theory to assess the competitiveness of States in relation to individual industries .
Basics
With his model, Porter describes how a company can become and, according to his statement, remain competitive. A company is "competitive" if it generates a greater profit than direct competitors, or if it has the potential to achieve a greater profit. Further corporate goals are not taken into account. The factors represent a mutually influencing system of promoting (and vice versa also inhibiting) factors, some of which are influenced by the company itself and some of which are influenced by the environment. Thus the model lies in the border area between economics, as a guideline for structural policy, and business administration, as a location analysis.
Determinants of the Diamond Model
In Porter's view, the following factors determine a company 's ability to compete against foreign competitors:
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Factor conditions : it concerns the availability of production factors
- Human assets : factors that affect the workforce. The number, training and costs for skilled workers play a particularly important role. Unemployed workers are of less importance, as one nation can hardly differ from another in this regard.
- Material resources: availability and price of raw materials, energy and soil
- Knowledge resources: Know-how that is available in professionals and institutions
- Capital resources: availability and costs of providing capital
- Infrastructure: Scope and costs of transport and communication routes
- domestic demand conditions : demanding customers force the industry to be innovative and of high quality
- Related and supporting industries : physical distance from upstream and downstream industries, communication promotes ideas and innovation
- Corporate strategy, structure and competition : direct competition promotes innovation and productivity
The factors mentioned interact with one another. There are two other determinants that can influence the system, but hardly interact with them:
- Coincidence : factors that cannot be influenced
- State : promoting innovation and competition, protecting industries, stimulating demand
Cluster formation
There is strong competitive pressure in clusters and related and supporting industries are settling here. As a rule, clusters also arise in places with good factor conditions and corresponding demand. Clusters increase productivity, promote innovation and stimulate new business. Companies that are in such a cluster are particularly well equipped for international competition because of these advantages that can be derived from the diamond model. Examples of such clusters are watchmaking in Switzerland or the film industry in Hollywood.
criticism
Porter's model of the emergence of competitive advantages is not without criticism in the professional world. In particular, Kenichi Ohmae , former head of McKinsey Neopost branch in Tokyo , criticized the exclusivity of Porter's criteria. According to this view, Porter's criteria are necessary for companies to switch to the international stage, but on the other hand they are not sufficient once a company is internationally active. Other factors are necessary to exist at this level. Indeed, Ohmae takes this further to a concept of the "stateless" corporation whose resources no longer rely on the original homeland. Porter's criteria would not be pointless in this environment, but they would be irrelevant for a truly international company, since the resources could be positioned somewhere central or decentralized so that the company would have the most competitive configuration. From an internal view of companies, Christopher Bartlett and Sumantra Ghoshal also hold a similar view in their concept of the transnational company .
Ohmae's statements are theoretically very plausible. However, there is no empirical evidence that even the largest companies have hardly taken any steps towards "statelessness". Even less state-bound companies like the Swedish-Swiss ABB , the US-American IBM , Japan's Sony and others still have strong roots in the main markets. The criticism remains weak due to the lack of empirical evidence.
Web links
- Description of Porter's Diamond (en) (PDF file; 94 kB)
literature
- Haas & Neumair Internationale Wirtschaft , Oldenbourg Wissenschaftsverlag, Munich 2006, ISBN 9783486579437 .
- Porter, M. National Competitive Advantage. Competing successfully on the world market , Droemer Knaur, Munich 1991, ISBN 9783426264331 .