How convincing is Porter's model of national competitive advantage in Essay - 1

How convincing is Porter's model of national competitive advantage in explaining the workings and achievements of major nation - Essay Example The claims are based on the total percentage of the entire exports across the entire globe and their relation to the three nations (Hill, 2009). This is an evidence of how Porter created a convincing analysis on his view on national competitiveness. In explaining the national business systems, Porter analyses national business systems by reviewing their input in the global market. He argues that the more exports a nation make the more significance it has in the global market(Thompson, 2004).This way of reviewing national business systems is preferable when comparing the output of nations in the global market. According to Thompson (2004) this method may be however, biased since not all national business systems are based on exports. The author further argues that they are nations with greater G.D.Ps and have very stable economic systems and they have less input in the international market (Thompson, 2004). In using porter’s way of analysis such nations lacks the international standard of competitive advantage. This assumption has created a Porter system that only recognizes the financial stable nations on the global market (Uchida & Cook, 2005). Porter uses the national diamond to show the influence of nations to their local companies. The influence and pressure from a nation will be a great determinant on whether or not the organizations attain an international competitive advantage. Nations provide support and resources to specific countries which then generate outstanding products and income. However, analysts argue that this diamond structure is usually biased depending on mutual agreement by both parties. For instance, an organization may enter into a deal with a government to share a certain percentage of their profits in exchange for support and resources. In such a scenario the market becomes unbalanced (Smit, 2010). However, this strategy is used by states to strengthen their international market significance. In an argument by Smit (2010) the g reater the significance in the international market the greater income through partnerships and revenues. The author further argues that, state governments use the national diamond to help the nation gain greater competitive advantage in the international market. This automatically raises the economic status of an organization. In support of the national diamond strategy, Porter claims that it improves specialization and the quality of goods produced in a country (Schott, 2004). He gave an example with Denmark and its influence in the global market in terms of export of insulin. The Danish government has significantly alleviated the production of insulin and treatment of diabetes in the country. It has provided resources, diplomatic and economic support for this project (Peng, 2009). The impact of this move is significant to the whole industry. Denmark is the leading exporter of insulin in the globe. Minus the support from the government this achievement would not have been possible (Peng, 2009). In Holland there is a premier research institute which focuses on cultivation, shipping and packaging of flowers. This project is almost a sole project of the Holland government that is supplied with resources and labor from the body. After this intervention Holland has become the leading exporter of flowers in the globe (Salvatore, 2002). This shows how great significance government support is on an organization. However, Porter