Framework

Porter's diamond of national advantage

The question it answers

When choosing where to base or expand operations, how can a leadership team tell whether a nation's factors, demand, supporting industries and rivalry will help its industry compete globally?

Origin
Porter, 1990
Diagram type
Hub diagram
Level of analysis
Industry
Topics
Strategy & leadership
Chess knight on a glass compass, icon for strategy and leadership

Diagram

Porter's diamond of national advantage

National competitive advantage
Factor conditions
Demand conditions
Related and supporting industries
Firm strategy, structure and domestic rivalry

Pitfalls

Pitfall

Showing only four determinants leaves out the two outside influences in Porter's full model (chance and government; see the 1990 article). Pair it with the debate: Krugman argues that nations are not firms and "national competitiveness" is a misleading idea; Porter argues that national advantage is created, not inherited.

Sources

References

Listed A–Z by author surname, Harvard style. A source with a DOI links to https://doi.org/…; one without links to its page or says plainly that it has no DOI.

  1. Krugman, P. (1994) ‘Competitiveness: a dangerous obsession’, Foreign Affairs, 73(2), pp. 28–44.doi:10.2307/20045917Source page
  2. Porter, M.E. (1990) ‘The competitive advantage of nations’, Harvard Business Review, 68(2), pp. 73–93.No DOIhbr.orgSource page
  3. Porter, M.E. (1990) The competitive advantage of nations. New York: Free Press.No DOISource page