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The Porter’s Diamond Model - Toyota

Added on - 02 Dec 2020

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1Assignment No 1Company Name: Toyota MotorsThe Porter’s Diamond ModelThePorter’s analysesdiscuss the impact of national conditions on firm’s internationalcompetitive advantage and are basedon three principles:1. The competitive performance of a country and the performance of the firms are interrelated asa country’s “success” depends on the firm’s performance and the performance of the firmsdepends on the on the nation’s environment;2. For a country to sustain its competitive advantage its firms must maintain its competitiveadvantage through constant innovations and development of resources and capabilities.3. Dynamic conditions of national environment are of the major impact on firm’s ability toinnovate and develop.
2The four determinants of competitive advantage include:Factor conditions:The economy's position in factors of production such as skilled labour, physicalresources, capital or infrastructure necessary to compete in a given industry.Demand conditions:The nature of the local demand for the industry's product or service.Firm Strategy, structure and rivalry conditions:The conditions in the economy governing how companies are created, organized, andmanaged and the nature of domestic rivalry.Related and supporting Industries:The presence or absence in the economy of supplier industries and related industries thatis highly competitive.Two factors influence the development of these determinants:Chance:Acknowledging the extent to which an industry’s competitiveness is related to itshistorical path of development;Government:The ability of government is to manage the determinants of advantage to the benefit oftheir basic industries.
3Porter’s 5-forces analysis1.Competitive Rivalry between Existing Players:The competition among firms in the industry normally determines the industry overallcompetition. Moreover, in some industries firms compete so aggressively that they priceproducts below costs level. In other industries firms compete in non price dimensions such asmarketing and innovation. The intensity of rivalry depends on sic factors: the concentration inthe industry, rate of market growth, cost conditions, product differentiation, switching costs, andexit barriers.Competition players are likely be high when:There are many players of about the same sizePlayers have similar strategiesThere is not much differentiation between players and their productsmany rivals competing for market sharemost of them were experiencedeach competitor was trying their best to differentiate their car in terms of performanceand value
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