The Competitive Advantage Of Nations.

Michael Porter



Now beyond its eleventh printing and translated into twelve languages, Michael Porter’s The Competitive Advantage of Nations has changed completely our conception of how prosperity is created and sustained in the modern global economy. Porter’s groundbreaking study of international competitiveness has shaped national policy in countries around the world. It has also transformed thinking and action in states, cities, companies, and even entire regions such as Central America. Based on research in ten leading trading nations, The Competitive Advantage of Nations offers the first theory of competitiveness based on the causes of the productivity with which companies compete. Porter shows how traditional comparative advantages such as natural resources and pools of labor have been superseded as sources of prosperity, and how broad macroeconomic accounts of competitiveness are insufficient. The book introduces Porter’s “diamond,” a whole new way to understand the competitive position of a nation (or other locations) in global competition that is now an integral part of international business thinking. Porter's concept of “clusters,” or groups of interconnected firms, suppliers, related industries, and institutions that arise in particular locations, has become a new way for companies and governments to think about economies, assess the competitive advantage of locations, and set public policy. Even before publication of the book, Porter’s theory had guided national reassessments in New Zealand and elsewhere. His ideas and personal involvement have shaped strategy in countries as diverse as the Netherlands, Portugal, Taiwan, Costa Rica, and India, and regions such as Massachusetts, California, and the Basque country. Hundreds of cluster initiatives have flourished throughout the world. In an era of intensifying global competition, this pathbreaking book on the new wealth of nations has become the standard by which all future work must be measured.

What will you learn from this book

  1. Diamond Model: Porter introduces the Diamond Model, a framework that identifies four key determinants of national competitive advantage: factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry. The interactions between these elements form the basis of a nation's competitiveness.

  2. Factor Conditions: Porter emphasizes the role of a nation's factors of production, such as skilled labor, infrastructure, natural resources, and technological capabilities, in shaping its competitive advantage.

  3. Demand Conditions: The book highlights the importance of domestic demand as a driver of innovation and competitiveness. A sophisticated and demanding domestic market can spur companies to improve their products and services.

  4. Related and Supporting Industries: Porter argues that the presence of strong supporting industries and a robust network of suppliers and related businesses contributes to a nation's competitiveness.

  5. Firm Strategy, Structure, and Rivalry: The way companies are organized and compete within a nation, as well as the intensity of domestic competition, plays a crucial role in determining competitiveness.

  6. Government's Role: While recognizing the importance of private-sector initiatives, Porter discusses the role of government in creating a supportive environment for businesses. Effective government policies can enhance a nation's competitive advantage.

  7. Clusters: Porter introduces the concept of clusters—geographic concentrations of interconnected companies and institutions in a particular field. Clusters facilitate collaboration, knowledge sharing, and innovation.

  8. Globalization: The book addresses the impact of globalization on national competitiveness, emphasizing the need for nations to develop specialized advantages in specific industries rather than attempting to compete broadly in all sectors.

  9. Innovation and Productivity: Porter underscores the role of innovation in enhancing productivity and competitiveness, both at the firm and national levels.

  10. Sustainable Competitive Advantage: The concept of sustainable competitive advantage is extended to the national level, emphasizing the importance of creating conditions that enable long-term success rather than relying on short-term advantages.

Language English
ISBN-10 0684841479
ISBN-13 9780684841472
No of pages 855
Font Size Medium
Book Publisher Simon & Schuster
Published Date 01 Jun 1998

About Author

Author : Michael Porter

4 Books

Related Books