Development of the firm's international competitiveness - Porter

7 important questions on Development of the firm's international competitiveness - Porter

(Diamond) What are the factor conditions?

Basic factors

Climate·       Physical infrastructure
·       Natural resources
Advanced factors

·       Educational system
Human resources·       Technological infrastructure
·       Capital

(Diamond) What are the demand conditions?

Nature of home demand·       Size of home demand
·       Economies of scale
·       Transportation costs
·       Buyer sophistication

(Diamond) What are the related and supported industries?

·      The success of an industry is associated with the presence of suppliers and related industries within a region.
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(Diamond) What role does the Government play?

·       Governments can play a powerful role in encouraging the development of industries within their own borders that will assume global positions.
Governments finance and construct infrastructure, providing roads, airports, education and health care, and can support use of alternative energy (e.g. wind turbines) or other environmental systems that affect factors of production.

(5 forces) The bergaining power of suppliers will be higher in the following circumstances:

Supply is dominated by a few companiesProducts are uniqueHigh switching costsForward integration is possibleBackward integration is unlikelyMarket is not an important customer to supplier group

(5 forces) The bargaining power of buyers is higher in the following circumstances:

Buyers are concentrated and/or purchase in large volumesBackward integration is likelyProducts are standardizedMany suppliers existBuyers earn low profitsIndustry product is unimportant to quality of buyer’s products, but price is important

(5 forces) New entrants they come depending on which barriers exist in the market. Key factors:

Economies of scaleProduct differentiation and brand identityCapital requirements in productionSwitching costsAccess to distribution channels

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