The Framework Of Competitiveness By Michael Porter's Competitive Advantage Of Nations

1) Introduction Competitive Advantage of Nations is a largely reputable yet often criticised work by Michael Porter (1990). The framework of competitiveness by Porter explained the achievements of industries and their contributions to the success of nations worldwide. Firstly, the concept of National Competitiveness and the Diamond Model will be briefly explained. Secondly, the varying criticisms of Porter’s theory by other academics will be discussed. Thirdly, the crucial missing dimensions in his framework will be identified. Lastly, it will be concluded if Porter’s theory is effective in comparison with other academics’ arguments.

2) Concept of National Competitiveness The constant public debate surrounding National Competitiveness has existed for a long time. According to Reinert (1995), despite
Complex and tough home consumers enable the company to identify consumer needs and satisfying those needs increases the company competitiveness worldwide. Low domestic demand results in companies venturing overseas markets and implementing a worldwide strategy to compensate the shortage in home demand conditions. c) Firm Strategy, Structure and Rivalry The nature of competition and local rivalry holds the ultimate impact on the global competitiveness of a nation’s companies. Domestic rivalry serves as a vital incentive to the formation and determination of competitive advantage as domestic rivalries over market share usually penetrates beyond business competition and becomes personal. Local competition eliminates the shared benefits that arises from the same home nation and drives firms to push beyond those existing benefits to create more sustainable advantages. Porter (1990) stated that geographic concentration increases the intensity of local rivalries. d) Related and Supporting