0 developed nations. Porter develops a new theory of how nations, states, and regions compete and their sources of economic prosperity.Porter questions how Switzerland, a nation with few natural resources, is a world leader in the production of chocolates, and Japan, a country whose economy was in shambles after World War 2, is now a global leader in making low cost, mass-produced, quality, high-technology products. Porter outlines a number of factors for this that go beyond natural resources, among these are; a sizeable demand from sophisticated consumers, an educated and skilled workforce, intense competition in the industry, and the existence of related and supporting suppliers. Porter also discusses external influences such as government and chanceDemand Conditions: Porter argues that companies should be ‘participating in national markets with the strongest rivals and most demanding customers, in order to build international competitiveness’ (Yip, 1995). A company faced to more competitive forces will strive to make themselves more efficient in order to have an edge over their competitors and maximise profits. Factor Conditions: Each nation possesses what economists have termed factors of productions. Factors of production are nothing more than the inputs to compete in any industry, such as Labor, arable land, natural resources, capital, and infrastructure. The factors most important to competitive advantage in most industries, especially in the industries most vital to productivity growth in advanced economies, are not inherited but are created within a nation, through processes that differ widely across nations and among industries. http://members.tripod.lycos.nl/Japan_industry/three.html Related and Supporting Industries: There has been an unexplained trend on why companies, suppliers, competitors and supporting industries tend to congregate in close proximity to each other. This focuses on competition with...
