Evaluate Porter's concept of the 'diamond' as a tool for analysing the Essay

Evaluate Porter's concept of the 'diamond' as a tool for analysing the competitive advantage of nations, assessing its the - Essay Example Nations have competed for resources or to establish their supremacy over others. Historical evidence for this can be traced to the age old rivalry of England and Scotland to the present day rivalry between USA and the Soviet Union in the cold war. However in the present context nations are fighting over the aspect of economic power which is the backbone for success to a nation. An economic might implies a strong nation with enough resources to sustain its population or to maintain a strong military power. The case of United States of America is a classic example in this regard. The nation has the unique status of being the sole economic and military superpower of the world. There have been numerous theories to suggest as to what may be the possible reasons for such supremacy. It has been widely stated that the prosperity of a nation is built and generated over a period of time rather than being acquired. Michel Porter (1990) also stated that the prosperity and success of a nation is not created by virtue of its physical resources which are a far critique from the laws of economics. Alternatively it has been argued that the competitive advantage and prosperity of a nation in the modern world depends on the ability of the nation to constantly develop and create new ideas which are distinct from the others (Porter, 1990, p.73). The case of Japan is a classic example in this regard, as it has emerged as one of the world’s mort prosperous and successful nations without having access to key resources. A deeper analysis into the success story of Japan reveals the innovativeness of its business organizations to deliver more value to the products. This value results in creating economic value and goodwill. Numerous examples of innovation can be traced to the nation including success story of organizations like Honda, Toyota and Sony which have created a competitive advantage and have carved a niche for themselves as well as the nation of their origin. Innovativen ess of the nation is also reflected from the fact that successful management techniques like Kaizen which have become the standards for present day business organizations (Ankli, n.d., p.233). The present study would analyse the competitive advantage of China in its pursuit of being and economic and military superpower. The choice of the nation assumes significance considering the fact that it is the fastest growing economy of the world. The growth of this nation has largely been attributed to the skill set of its large labour force which offers a supply of cheap labour. The nation has emerged as a hub for manufacturing with almost every major organization having its manufacturing facility in the nation. Another important aspect apart from the labour force is that of government policies. The liberalisation policy of the nation along with the unique application of the aspect of Special Economic Zones has transformed the nation into the fastest growing economy of the world having an a nnual GDP growth of approximately 8.7 percent as of 2009 which is being valued at approximately 4.814 trillion US dollars as of 2009 (US Department of State, 2010). The following sections would try to analyse the competitiveness of the nation on the basis of the Diamond model proposed by Porter as well as a comparative analysis with other