The Diamond Four Determinants of National Competitive Advantage

DETERMINANTS OF NATIONAL COMPETITIVE ADVANTAGE
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The Diamond - Four Determinants of National Competitive Advantage:
The national competition is determined by the capability of the production sector to improve their goods and services. Domestic demand, local competition, and a strong local manufacturing sector facilitate a competitive edge for local companies over their competitors. Among the factors that influence innovation and improvement of the production sector is information.
Factor conditions
Local competition promotes a charged atmosphere which catapults a nation's best producers and performers to the global market. The fair gameplay is important whenever engaging in local competition and adherence to the rules of engagement. For companies to gain the competitive advantage, they must be ready to acquire relevant skills by employing the right workforce and access the right information regarding the products and services they deal with.
Among the main factors that influence competitive advantage are land, infrastructure, labor, demand, suppliers, and strategy. The above factors, which are created, are the drivers of trade in any given country and governments must take the initiative to create an environment that promotes the factors of production. Specialization among the workforce is highly encouraged.
Demand conditions
According to Porter, firms that have stiff local competition are often likely to offer better quality products and services due to proximity and demand. Closeness to markets enables companies to understand customer needs and easily address them.
Innovation drives companies to compete so that they attain an edge over their rivals. This effectively brings in the aspect of standardization whereby better quality and new inventions are achieved. This also becomes a trendsetter on a global scale, especially if the innovations are exported to other countries. It is critical for a company to do wide consultations among all stakeholders on a product under review. This exchange of ideas helps to improve on the product and make it internationally competitive.
Related and supporting industries.
Government policy influences the performance of companies within its jurisdiction in terms of their taxation, investment, and competition policies. The capital markets regulators should assess the determinants of trade on the industry-to-industry basis for them to be relevant. Long run outlook industries like the oil sector are less attractive for competition compared to short-run outlook sectors like the information technology sector, which because of its dynamism is very competitive.
In furtherance of Porter's argument, corporate administrative approaches vary from one country to another with some preferring hierarchical structures while others prefer small family managed companies.
Local competitors enhance business and stimulate industry growth. This in effect enhances competition and inspires perfection as is the case in the Japanese motor industry. In these scenarios, better quality is assured, acquisition costs become lower, service delivery is enhanced, and in the process, new and better products are created. The lack of c...