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StrategyandNa,onalCompe,,veness

PORTERSDIAMOND

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INTRODUCTION

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CLASSICALAPPROACHTOTRADE

Classicaltheoriesofinterna

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PORTERSARGUMENTS

Porterarguedthatana

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FOCUS

MNEscannolongerrelyexclusivelyonthecompe

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4INGREDIENTSOFNATIONAL

COMPARATIVEADVANTAGE1. Availabilityofresourcesandskills;2. Informa

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TheDiamond

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FirmStrategy,

Structure&Rivalry

FactorCondi

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DeterminantsandExternalVariables

Determinants:1. FactorCondi

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1.FACTORCONDITIONS

Acountrycreatesitsownimportantfactorssuchasskilledresourcesandtechnology.

Stockoffactorsatgiven

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Factorcondi

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2.DEMANDCONDITIONS

Theseinclude: thecomposi

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3.RELATEDANDSUPPORTINGINDUSTRIES

Theseinclude: thepresenceofinterna

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RELATEDANDSUPPORTINGINDUSTRIES

Whenlocalsuppor

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Firmstrategy,structureandrivalry

Localcondi

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THEDIAMONDASASSTEM

Theeffectofonepointdependsontheothers.Forexample,factordisadvantageswillnotlead

firmstoinnovateunlessthereissufficient

rivalry.

Thediamondalsoisaself-reinforcingsystem.Forexample,ahighlevelofrivalryoYenleads

totheforma

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Theroleofchance

Chanceeventscannullifytheadvantagesofsomecompe

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Theroleofgovernment(contd)

Subsidies; educa

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Cri

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Porterdelineatesfourdis