Competition. The concept of a national diamond. The influence of economic policy and other factors (the most important)

Lecture notes, cheat sheets
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Competition. The concept of a national diamond. The influence of economic policy and other factors (the most important)

Lecture notes, cheat sheets

Directory / Lecture notes, cheat sheets

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52. The concept of a national rhombus. Influence of economic policy and other factors

M. Porter revealed the most important reasons successes and failures in the competitive struggle of firms in developed countries. He proposed the concept of CS - the idea of the so-called "national rhombus", revealing the four properties-determinants of the country that form the environment in which the firms of this country operate.

The terms of the "national rhombus":

1. The strategy of firms, their structure and the nature of competition between them.

2. Parameters of factors of production.

3. Parameters of demand for products.

4. Related and supporting industries

They correspond to the following tasks:

1. Constant introduction of innovations, new technologies, methods, organization of production. The knowledge resource, highly developed infrastructure (communications, information) is gaining priority;

2. Development of an effective strategy for firms; creation of a progressive corporate structure; competitive rivalry between manufacturers and suppliers within the country;

3. Support and development of industries and industries that supply exporters with components, semi-finished products, raw materials, fuel, providing them with operational information;

4. Active influence on the parameters of demand, its volume, dynamics, structure, differentiation. The developed demand of the domestic market is an important prerequisite for a successful entry into the foreign market.

The role of the government is significant in maintaining the competitive advantages of the country. It creates conditions, coordinates and stimulates the activities of firms. The government influences all parameters (determinants) of the "national rhombus".

The "national rhombus" characterizes the system of determinants of the CA, the components of which, being in interaction, create the effect of integrity, i.e., enhance or weaken the potential level of the CA of enterprises in this country.

In the process of studying competitiveness as a generalized economic problem the following factors should be taken into account:

a) it is necessary to quantify economic objects that are carriers of the property of competitiveness, without which maintaining and increasing the level of competitiveness is subjective;

b) there is no universally accepted concept of competitiveness;

c) among the main parameters that determine the level of competitiveness are multi-layeredness, relativity and concreteness;

d) competitiveness is determined using the results of comparisons of both enterprises and their products;

e) comparison of economic objects in the process of comparative analysis of competitiveness must meet the requirements of completeness and correctness.

Author: Ilyina V.N.

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