Porter Diamond

Porter Diamond:
The diamond model is an economical model developed by Michael Porter in his book The Competitive Advantage of Nations, where he published his theory of why particular industries become competitive in particular locations.
Who is Michael Porter?
Michael Eugene Porter (born May 23, 1947) is the Bishop William Lawrence University Professor at Harvard Business School. He is a leading authority on company strategy and the competitiveness of nations and regions. Michael Porters work is recognized in many governments, corporations and academic circles globally. He chairs Harvard Business School's program dedicated for newly appointed CEOs of very large corporations.
Factors of Porter Diamond:
Factor conditions are human resources, physical resources, knowledge resources, capital resources and infrastructure. Specialized resources are often specific for an industry and important for its competitiveness. Specific resources can be created to compensate for factor disadvantages.
Demand conditions in the home market can help companies create a competitive advantage, when sophisticated home market buyers pressure firms to innovate faster and to create more advanced products than those of competitors.
Related and supporting industries can produce inputs which are important for innovation and internationalization. These industries provide cost-effective inputs, but they also participate in the upgrading process, thus stimulating other companies in the chain to innovate.
Firm strategy, structure and rivalry constitute the fourth determinant of competitiveness. The way in which companies are created, set goals and are managed is important for success. But the presence of intense rivalry in the home base is also important; it creates pressure to innovate in order to upgrade competitiveness.
Applying Porter Diamond in Beximco Textile Ltd : Bextex Ltd. (the "Company") was incorporated in Bangladesh as a Public Limited Company with limited liability on 8 March 1994 and commenced commercial operation in 1995. This company applying porter Diamond theory to established their business. They analysis the most important factor of porter diamond. These are Factor conditions, Demand conditions, Related and supporting industries, Firm strategy, structure and rivalry, Government, Chance. When they are satisfied then they are going to establish their business. Factor conditions are human resources, physical resources, knowledge resources, capital resources and infrastructure. The entrepreneurs of BexTex are saw that in Bangladesh the main factor of a garment is labor is very low cost and the number of labor are available. Another main object is land. They established their factory in Gazipur. In Gazipur, land
also very available. The number of capital also available. Their paid up capital is 1,882.50. In this case, Factor conditions are available. For this reason the entrepreneur of Bextex are established their business in Bangladesh. Demand conditions: Another main factor in Porter Diamond is Demand conditions. Because the main aim of a Business is achieve profit. If the demand of a product is less then the profit is also low. So the demand condition is also very much important. The entrepreneur of Bextex analysis the demand condition of Bangladeshi product. They found that they can export high quality product with low cost because the labor is very low cost. And the demand is also very high in Europe, America, Africa and the Muslim country because Bangladesh is a Muslim country. So the establishment of Bextex is positive in Bangladesh. Related and supporting industries: There are lots of bank and insurance company in Bangladesh. The entrepreneur of Bextex can get loan and safety from bank and insurance. And the other related and supporting industries are also available in Bangladesh. India export a lot of Hanger, Jipper, Button, Yen etc. And Bangladesh can easily import from India and the transport cost is also very low. So the establishment of Bextex in Bangladesh is positive. Firm strategy, structure and rivalry

Porter Diamond

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Porter Diamond

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Porter Diamond:

Who is Michael Porter?

Factors of Porter Diamond:

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