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Porter’s Diamond Model in Toyota : Report

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Added on  2020-06-06

Porter’s Diamond Model in Toyota : Report

   Added on 2020-06-06

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Porter’s Diamond Model in
Toyota
Porter’s Diamond Model in Toyota : Report_1
Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
DIAMOND ANALYSIS.................................................................................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
Porter’s Diamond Model in Toyota : Report_2
INTRODUCTION
Diamond model was developed by Michael Porter. This is an economic model that is
established especially for small sized businesses and it can also be used by other big
organisations. This model assists the business entity in developing understanding about their
competitive position in international market. It is also referred as Porter’s Diamond Theory of
National Advantage. Various organisation within clusters impact each other in order to enhance
productivity, facilitating as well as fostering innovation and ensuring the desired results. The
enterprise working under this cluster has an opportunity to expand their business in global
market, mark their presence and to gain competitive advantage. The study focuses on applying
Porter’s cluster theory in order to explain the origin of Toyota’s competitive advantage.
MAIN BODY
Toyota Motor Corporation is a Japanese company dealing in automotive manufacturing
industry. It consists of approx. 263,444 employees worldwide. Toyota enterprise is considered as
the fifth largest organisation in terms of revenue. It is also the largest automotive manufacturer.
Toyota firm is known as First company that has manufactured more than 10 million vehicles per
year. It is also considered as the market leader that has sold hybrid electric vehicles and Toyota is
the only organisation that has motivated the mass market acceptance of Hybrid vehicles in
international as well as domestic market (Wonglimpiyarat, 2017)
Porter’s diamond model is named as diamond because it consists of all constituents that
are significant in international business competition are assembled in form of diamond. Model
has adopted the concept of clusters of products group that has same features. Porter’s cluster
diamond theory has analysed the major four determinants that may assist cited firm in attaining a
national advantage. Theory states that the combination of four determinants has a great influence
on the competitive strength of Organisation. Porter believes that various competitive industries
can develop specialised cluster of domestically based organisation. These clusters are correlated
with each other by vertical relations like supplier integrating with buyer or vice versa. Through
horizontal relation by customer, distribution channel, technology, skills etc. Specific or
specialised cluster allow country to develop business system that may result into economic
success and gaining competitive advantage.
1
Porter’s Diamond Model in Toyota : Report_3

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