Environmental Issues Flashcards
Porters Diamond
Conditions within a country that help firms compete
4 determinants of national competitive advantage
FIRM STRATEGY, STRUCTURE AND RIVALRY
• Cultural factors (German industry, Italian Fashion), management style, time horizons, capital markets help determine orientation and capability.
• Domestic rivalry leads to competitive strength
FACTOR CONDITIONS
Endowments of inputs to production
• Basic - Natural resources, climate, labour/HR
• Advanced - infrastructure, technical education, high tech industries
DEMAND CONDITIONS
Buyers in home market set fundamental parameters such as market segments, degrees of sophistication, rate of growth and innovation. Early saturation of home market encourages export
RELATED AND SUPPORTING INDUSTRIES
• Success in related industries gives mutual support
• Home suppliers makes industry more robust
• Rivalry creates supplier specialisations
• CLUSTERS of related industries derive strength from their links
Key Drivers of Environmental Change
H
Porters 5 Forces
Determines long term potential of an Industry
(1) Bargaining power of Suppliers
(2) Threats of new entrants
(3) Bargaining power of customers
(4) Threats from substitute products
- > (5) Rivalry amongst current competitors
