Its all about final script about the theories, Essays (high school) of Earth science

Download Its all about final script about the theories and more Essays (high school) Earth science in PDF only on Docsity! Porter’s National Competitive Advantage Theory FOUR DETERMINANTS 1. Factor Conditions: This refers to the resources a nation possesses, including skilled labor, infrastructure, natural resources, and capital. Example: Switzerland's watchmaking industry flourishes due to its access to highly skilled craftsmen, a long watchmaking tradition, and readily available raw materials. This creates a unique factor advantage that is difficult to replicate. 2. Demand Conditions: The nature and sophistication of domestic demand shape the direction of innovation and industry evolution. Example: South Korea's demanding and techy population drives innovation in the smartphone industry. Companies like Samsung are constantly pushed to refine their products, leading to global competitiveness. 3. Related and Supporting Industries: The presence and strength of supporting industries like suppliers, technology providers, and distributors create a conducive ecosystem for growth. Example: Silicon Valley in the US boasts a dense network of venture capitalists, tech talent, and universities, fostering a supportive environment for tech startups to flourish. 4. Firm Strategy, Structure, and Rivalry: The nature of competition within a nation shapes its firms' strategies, structures, and competitiveness. Domestic rivalry is instrumental to international competitiveness since it forces companies to develop unique and sustainable strengths and capabilities. The more intense domestic rivalry is the more companies are being pushed to innovate and improve. To maintain competitive advantage. in the end this will only help the companies when entering the international arena. A good example of this is the Japanese automobile industry with intense rivalry between players such as Nissan, Honda, Toyota, Suzuki, Mitsubishi, and Subaru because of their own fierce domestic competition they have become able to more easily compete in foreign markets as well. Example: Japan's intense rivalry within the automobile industry has driven continuous innovation and efficiency, making Japanese carmakers global leaders. Interconnected Diamonds: These four determinants are not isolated; they interact and influence each other. Strong demand can incentivize investment in factor conditions, while intense rivalry can foster innovation in supporting industries. This interconnectedness underscores the dynamic nature of national advantage. Dunning's Eclectic Paradigm When a company decides to expand its business to a foreign country, there is a wide variety of entry strategies to choose from and they all have their pros and cons. Often used strategies are exporting, licensing, franchising, strategic alliance, joint venture, and wholly-owned subsidiary. So how to choose an appropriate entry strategy? For managers, one of the most practical approaches to help them at least exclude some options is by using the OLI Framework, also known as the eclectic paradigm. OLI is an acronym for Ownership-, Location- and Internalization- advantage. It is based on internalization theory and was first expounded upon in 1979 by the British economist, John H. Dunning. According to this paradigm, a company needs all three advantages to be able to successfully engage in Foreign direct investment. If one or more of these advantages are not present, the focal company might want to use a different entry strategy. First, a company needs an ownership advantage to overcome the liability of foreignness These disadvantages vary from simply not speaking the local language to having limited knowledge on the local customer demands Ownership advantages…. Brand, copyright, trademark, or patent rights and the use and skills internally available are factors that offer a company this advantage Hence, ownership advantages are typically intangible these advantages should be valuable, rare hard to imitated, and organizationally embedded. In other words, the resource should be so valuable that a company can derive a competitive advantage over foreign rivals. Therefore, the first question that management should ask itself is… does our firm… This can a strong brand name with a great reputation unique technological capabilities or huge economies of scale obviously the answer to this question should be yes to explain your motives for expanding abroad in the first place. Second, Location Advantage… considering the liability of foreignness… host countries These advantages can be simply geographical or exist because of the cheap raw materials, low wages, skilled labor force, special taxes, lack of tariffs etc. Companies should assess whether there is a comparative advantage to performing specific functions within a particular nation often these considerations depend on resource cost and availability Furthermore, the attributes vary among the chosen locations usually location advantage refers to natural or manufactured resources. These resources… Porter’s diamond model can be a great tool for these location advantages