grad-diamond
Diamond Model (Porter, 1990): National Competitive Advantage
Overview
Porter's Diamond Model explains why certain nations become home bases for globally competitive industries. Four interconnected determinants — factor conditions, demand conditions, related and supporting industries, and firm strategy/structure/rivalry — form a self-reinforcing system. Government and chance act as external variables that influence the diamond but are not determinants themselves. Crucially, national advantage is industry-specific, not economy-wide.
When to Use
Trigger conditions:
- User asks why a country dominates a specific industry (e.g., Swiss watches, Korean semiconductors)
- User needs to evaluate a country as a base for a specific industry
- User is comparing national environments for investment or relocation decisions
- User mentions "national competitiveness", "diamond model", "Porter's diamond", or "country advantage"
When NOT to use:
- For firm-level competitive strategy -> use Porter's Five Forces
- For firm-level FDI decisions -> use grad-oli
- For gradual market entry -> use grad-uppsala
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