Ecn 600 Module 5 Critical Thinking Assignment (105 Points)

Porter’s Diamond Theory of National AdvantageStudent’s NameInstitutional AffiliationPorter’s Diamond Theory of National AdvantageIntroductionA country’s competitiveness is determined by its industry’s capacity to upgrade and innovate. Organizations gain advantage because of challenge and pressure. Competitive advantage is established and maintained through a superiorly localized process (Porter, 1990). The foundation of competition has shifted more to knowledge’s assimilation and creation, thus making a nation’s role grow. Even if an organization does not import or export directly, management still looks at a foreign business setting where the buyers’, sellers’, new entrants of providers of substitutes’, and competitors’ actions may influence the local market. Porter’s Diamond Theory of National Advantage is a model which emphasizes a few factors that determine competitive advantage both at company and national levels. These factors are factor conditions, related and supporting industries, demand conditions, and firm structure and strategy (Cavusgil, Knight & Riesenberger, 2017). National competitive advantage is a significant factor for a country’s economic success. Investing in it promotes long-term economic sustainability and development. Countries succeed in maintaining a competitive advantage because their local setting is the most dynamic,