Analysis of Roles and Responsibilities in Partnership Working

A Critical Analysis of the Photovoltaic Power Industry in China: From Diamond Model to Gear Model

International Business Strategy
1

TABLE OF CONTENTS
INTRODUCTION................................................................................................................................3
MAIN BODY.......................................................................................................................................3
CONCLUSION....................................................................................................................................7
REFERENCES.....................................................................................................................................8
2

INTRODUCTION
International business strategy is considered as a well structured plan which provides a
guide to diverse commercial transactions taking into account among business organizations of
two different countries. In the support of this, it can also be stated that the international business
strategy is activities which are performed by private organizations in order to meet goals and
increase the profit margin ratio while dealing in international marketplace. Number of business
organizations are focusing on diverse strategies while dealing in domestic market as well as
international market. In order to have proper understanding regarding concept of international
business strategies the learning will consider two business organizations. Key purpose of
learning is to understand the gape between strategies that companies adopt at home and host
location.
MAIN BODY
Porter Diamond Model
As per the view of Anette and Sylvie (2013) porter diamond model is a technique which
provides better explanation to competitive advantage while dealing in different nations. With an
assistance of porter diamond model the business organizations can focus on certain specific
factors which can influence the operational activities (Anette and Sylvie, 2013). In the support of
this, it can also be asserted that it is a model which facilitates in effective analysis of diverse
global factors and improve the strategies which can provide effective competitive advantage in
global market. Jifeng (2013) has stated that the porter diamond model is beneficial for efficient
design of strategies which can assist in highly competitive market. It considers number of global
factors which can influence the operations of business firm such as economy, social, etc. With an
assistance of this, approach the business organizations can easily focus on diverse clusters which
relates to the industry and help in attaining better competitiveness (Jifeng, 2013).
Moreover, Li and Solis (2013) has said that the organizational performance can also be
analysed in appropriate manner with comparison of other organizations/competitors. In the
support of this, it can be said that the porter diamond model is classified in diverse factors such
as factor conditions, demand conditions, related and supporting industries, firm strategy or
structure, government and chance (Li and Solis, 2013). In this respect, Simerson (2011) has
critically explained that with an assistance of porter diamond model the business organizations
Page | 3

can focus on diverse resources which are essential for better competitive advantage such as
human resource, knowledge, physical, capital resource, etc (Simerson, 2011).
In the support of above statement it can be said that the Mcdonalds is focusing on various
factors which specifically relates to the food and beverage industry. Improved focus on these
factors is significant for better gain of competitiveness. Riasi (2015) has stated that while
operating in global market the Mcdonalds focuses on the diverse global factors which relates
with the overall industry and while dealing with the domestic market the management of
Mcdonalds focuses on domestic factors like social needs, economic factors, etc (Riasi, 2015).
Furthermore, Zhao (2011) has also contended that while dealing in home market the
company can easily create better competitive advantage with an consideration of demand
conditions. In these conditions the social factors also forces management of Mcdonalds to bring
number of innovations in products in rapid manner (Zhao, 2011). It also provides better
competitive advantage to the firm over its competitors as company advance its product line faster
as compared to competitors. In the support of this, Zhao (2012) has critically stated that
improved consideration of related and supportive industry also provides great level of assistance
in creating competitive market position. With an assistance of this, Mcdonalds can easily have
production and input which are critically significant for innovation as well as internationalization
of firm. It also provides an great opportunity to reduce the overall cost of global level operations
and provides cost effective inputs (Zhao, 2012). It also allows business organization to have
number of up gradation in the operational activities as per the global market needs. Bakan and
Dogan (2012) has also argued that these kinds of up gradation within organization provides
synchronized work and innovation.
Other than this, Honda auto mobile is also uses different kinds of strategies while dealing
in domestic as well as international marketplace. In the support of this, Bakan and Dogan (2012)
has asserted that the organizational structure of Honda automotive is differ at both locations
which indicates that the business firm is using different strategies at both home and host
locations. In this management of Honda automotive design goals and actions as per different
market needs and perception so that work can be managed in proper way and lead business to
impressive success (Bakan and Dogan, 2012). In the support of this, it can be stated that the
Honda automotive is using different strategies. For example, in Japan company is more focused
on sports bikes which contains more engine power. But while dealing in India the business
Page | 4

organization is focused on normal bikes which contains less engine power and provide high
mileage. In this respect, Zhang and Zhao (2012) has said that business organizations are using
different strategies while dealing in international market. It provides better opportunities to
business firms and facilitates in effective capturing of market share in new market.
Government also plays a key role in business operations and it can influence the
determinants of competitiveness. Zhang and Zhao (2012) has critically explained that the
government policies can impact the supply conditions of business firm so it is necessary for
business organization to consider government policies while dealing in international market. It
can also have some influences on the production factors and demand conditions in the home
market which will impact the competitiveness (Zhang. and Zhao 2012). Government interactions
at local and national level is more easier as compared to international level. In the support of this,
Meng (2015) has stated that it is a key reason that Honda automotive firm is adopting different
strategies at domestic and global level. During the operations and business expansion within
Japan the management of Honda Moto. Corporation Ltd. can easily contact with Japan
government in easy manner and there are less restrictions of company as it is its home location
(Meng, 2015). But on the other side, while entering in India the business organization has signed
agreement with the local organization named Hero. It was essential for management of Honda to
have partnership agreement with Hero as per the standards of Indian government.
Home and host location strategies
As per the view of Ozgen (2011) while dealing in China firstly Mcdonalds has faced
number of issues because they have replicated their United Nation culture in its Chinese
operations. It has not been accepted by Chinese culture so later on company has changed its
strategies as per the consideration of Chinese culture (Ozgen, 2011). This kind of case studies
also indicates that the business organizations are focusing on different strategies while operating
in home and host locations. In the respect of this, Joseph and Eshun (2009) has contended that
the management of Mcdonalds has also changed in menu as per the perception of Chinese
culture which has also provided great business opportunities and facilitates in meeting
sustainability standards (Joseph and Eshun, 2009). Culture of restaurants has also been modified
by the management as in China coffee houses are more popular rather than fast food joints.
In the support of above statement, Lafley and Martin (2013) has contended that the
Mcdonalds mainly operates its business from United states. Company uses different strategy
Page | 5

while operating in United States. Key motive of Mcdonalds U.S. is to impact the perception of
customers by offering good value item and include number of food items in menu as per needs of
U.S. as well as different nations needs. It is because U.S. stores have equal ratio of visit
regarding U.S. citizens as well as other nations. Lafley and Martin (2013) has also concluded
that the advertising strategy of Mcdonalds is also different as compared to other nations. In
United States the company uses photographs of farmers who supply raw materials to
organization (Lafley and Martin, 2013). Moreover, the menu is also different as compared to
other nations such as chicken bases dishes are more introduced.
According to Marren (2012) Honda is effectively focusing on global perception in order
to have effective supply of its products and provide reasonable price for worldwide buyers. It is
also essential for improvement in satisfaction level of world wide buyers. On the other side, in
Japan the business organization is effectively providing enhanced level of satisfaction to
domestic customers (Marren, 2012). In Japan company is instantly focusing on renowned of its
innovation, excellence and advanced engineering which can provide best outcome in the Japan
auto market. Marren (2007) has concluded that the management of Honda automotive firm is
focusing on different strategies in order to attain better market share and hold competitive
advantage in host as well as home location.
Usefulness
In the support of usefulness of porter diamond model in the context of international
market, Nickols (n.d) has stated that with an assistance of this model the business organizations
can easily reflects the fours dimensions of competitiveness within business. For example, the
government policies of both home and host nations are different so it is necessary for business
organization to understand the gape among government policies in order to boost the
organizational effectiveness (Nickols, n.d.). In this respect, the Ricart (n.d.) has also concluded
that the economic conditions of nations are also differ which creates diversification in
government policies that can have direct impacts the organizational developments.
As per the view of Marren (2007), government policies also provides great level of
assistance to the business organizations. Government policies and investment in education
projects provides effective workforce to the business firm (Marren, 2007). This clearly indicates
the organizations must look forward to nations who are investing more on education policies and
investment policies as it provides an effective allocation of diverse resources such as raw
Page | 6

material, workforce, etc. Marren (2012)has also asserted that the presence of supporting
industries in close proximity to manufacturing companies can reduce input costs and increase
profits. In the support of this, it can also be stated that with an improved focus on supporting
industries the management of business organization can easily attain raw materials which is
beneficial for effective competitive advantages. Martin (2013)has also concluded that the
business organization can have effective sustainability in the competitive market while dealing in
home market and meet the needs of global business environment while operating business in
international market (Joseph and Eshun, 2009). It provides better opportunities in the context of
technology, social and other essential factors which can influence work culture.
CONCLUSION
As per the above study it can be concluded that number of business organizations are
using different kinds of strategies while operating in home and host locations. It is beneficial for
effective development of business opportunities and lead business to impressive success. It has
been identified that the porter diamond model is also beneficial for business organizations while
operating in global market. Moreover, while dealing in home market the company can easily
create better competitive advantage with an consideration of demand conditions. With an
improved focus on porter diamond model factors the business organizations can gain better
competitiveness.
Page | 7

REFERENCES
Books and Journals
Anette, S. and Sylvie, C. K., 2013. Strength of ties involved in international new ventures.
European Business Review. 25 (6). pp.536 - 552
Jifeng, M., 2013. Networking capability, new venture performance and entrepreneurial rent.
Journal of Research in Marketing and Entrepreneurship. 15(2). pp.101 - 123.
Joseph, P. And Eshun, J., 2009. Business incubation as strategy. Business Strategy Series. 10(3).
pp.156 – 166.
Lafley, A. and Martin, R., 2013. Playing to Win: How Strategy Really Works. Harvard Business
Press.
Li, C. and Solis, B., 2013. The Seven Success Factors of Social Business Strategy. John Wiley &
Sons.
Marren, P., 2007. High-functioning business strategy. Journal of Business Strategy. 28(6). pp.37
– 39.
Marren, P., 2012. The devil's dictionary of business strategy. Journal of Business Strategy. 33(4).
pp.58 – 60.
Meng, Q., 2015. Comprehensive Development Evaluation System of Asian Infrastructure
Investment Bank Based on Double Diamond Model. American Journal of Industrial and
Business Management. 5(07). pp.518.
Ozgen, E., 2011. Porter's Diamond Model and Opportunity Recognition: A Cognitive
Perspective. Academy of Entrepreneurship Journal. 17(2). pp.61.
Riasi, A., 2015. Competitive Advantages of Shadow Banking Industry: An Analysis Using Porter
Diamond Model. Business Management and Strategy. 6(2). pp.15-27.
Simerson, K. B., 2011. Strategic Planning: A Practical Guide to Strategy Formulation and
Execution. ABC-CLIO.
Zhang, L.Y. and Zhao, G.H., 2012, September. Research on Competitiveness of Coal Enterprises
in Shanxi Province-Analysis Based on Michael Porter’s" Diamond Model". In Advanced
Materials Research. 524. pp. 2911-2919.
Zhao, Z.Y., 2011. A critical analysis of the photovoltaic power industry in China–From diamond
model to gear model. Renewable and Sustainable Energy Reviews. 15(9). pp.4963-4971.
Zhao, Z.Y., 2012. Foreign architectural and engineering design firms’ competitiveness and
Page | 8

strategies in China: A diamond model study. Habitat International. 36(3). pp.362-370.
Online
Nickols, F., n.d. Strategy Definitions and Meaning. [pdf]. Available through:
<http://www.nickols.us/strategy_definitions.pdf>. [Accessed on 9 December 2015].
Ricart, J. n.d. From Strategy to Business Models and to Tactics. [pdf]. Available through:
<http://www.hbs.edu/faculty/Publication%20Files/10-036.pdf>. [Accessed on 9
December 2015].
Page | 9