Porters Approach to Competitive Advantage

Porters approach to competitive advantage.


Difference between Value Chain, 5 5orces and the Diamond.                                                                              

First I would like to make a comparison between Porters 5 forces and his Diamond model. Using the 5 forces model we can see and analyse how the competitive strength of a company / business is. This is a first point of difference between Diamond and 5 forces, as 5 forces focuses on how the company is doing, the Diamond model gives us the competitive strength of nations. Porters Diamond model puts his focus on a nation , that is way they have to think about more things than when compare one business to another. Using the Diamond model gives us the chance to look further into the certain demand conditions , related and supporting industries , how the government is working in that certain nation , how is the rivalry, business’ structure and strategy. These things are very important to think about when you want to open or work together with foreign nations. It is always good to do a Porters Diamond model first in your home country and then compare it with the other nation. Both Porters Diamond and 5 Forces are based on outside – in thinking and if you want to create more corporate value you also have to think inside – out. With Porters Value Chain framework we can see how a company can create value and competitive advantage => The think from the inside and work it out towards they outside = difference with the outside thinking of Porters Diamond and 5 forces. They start first with analysing the primary activities in the company starting with the inbound logistics going to the operations towards the outbound logistics , marketing and sales and ending with service. Above the primary activities are the supporting activities like the firm’s infrastructure, the HRM management , the R&D department and the procurement. Before you think...