This sample will let you know about:
- Discuss about the Porter Diamond Structure.
- Discuss about the Porter Five Forces
Introduction
Through increasing corporate strategies it has been evaluated that company operates in a global context. Here, Sainsbury has been undertaken which is a MNC operating in UK and therefore, firm possess effective competitive advantage through improving the brand image of firm among competitors (Brown, 2014). However, if any business does not focus upon importing or exporting directly, they need to focus upon international business environment which involves buyers, sellers and new entrants so that best results can be attained. Further, it is essential for company to identify its target investment location in relation to enhance its market and satisfy the needs of numerous customers. Through implementing the Michael Porter Diamond model it helps in analysing that why certain nations are more competitive than others as well as certain industries are more competitive than others (Kilian and Murphy, 2014). Management of Sainsbury aims to invest within India so that they can gain competitive advantage to overcome rivals. Selecting target investment location assists in proving useful for businesses so that they can attract wide range of customers and identify their needs in order to raise the performance of firm in market.
Porter Diamond Structure
Here, the diamond structure affects the four different factors that lead to a national competitive advantage which are as follows-
Factor conditions
It can be assessed that each and every country creates its own important factors such as skilled workers, innovative technology that helps in enhancing the varied factors which helps in improving the country's image in market. It is essential for firm to identify the different factors of the location where they are planning to invest i.e. India so that national competitive advantage can be attained (Pindyck, 2013). However, company might face certain disadvantages within factors of production force innovation as in adverse conditions i.e. labor shortages or scarce raw materials, firms are being forced to innovate new methods and thus such innovative leads to national competitive advantage.
Demand conditions
It assesses that when the market for a specific product is larger locally than in foreign markets. However, the local companies pay more attention to that product as compared to the foreign companies. Hence, it provides competitive advantage for businesses in order to operate in Indian market and enhance brand image in market (Cukierman, 2013). Further, Sainsbury aims to demand local market that leads firm to gain national advantage. Therefore, it is essential for businesses to identify the trend setting local market which assists local market that helps firm to anticipate global trends and enhance the market share of firm.
Related and supporting industries
It assesses that Sainsbury faces competition from local supporting industries as they are very competitive in nature and thus businesses focuses upon being more cost effective and gain innovative inputs. Further, it also strengthens the firm's image when the suppliers themselves are strong global competitors and Sainsbury faces tough competition within market (Sellar and Lingard, 2013).
Firm strategy, structure and rivalry
Here, it identifies that local conditions affects the firm strategy therefore, it is essential for businesses to tend to be hierarchical. Sainsbury needs to carry out its operations on the basis of effective strategy and structure which aims them to determine in which type of industries, country will flourish (McCauley and et. al., 2015). Also, rivals needs to be identified so that industry could be made attracted. They also prefer to move forward the business and give tough competition to rivals. However, it also assesses that the local rival forces assists firm to move beyond and enhance the brand image of firm
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