Porter and National Competitive Advantage Essay

Porter and National Competitive Advantage - Essay Example It is evidently clear from the discussion that Porter’s National Competitive Advantage theory gives a complicated tool for evaluating competitiveness with every implication. Porter’s theory provides to recognizing the â€Å"competitive advantage of nations† in global production and trade. Its core, on the other hand, concentrates upon individual firms, in which the values of competitive advantage are involved. The concept of competitive strategy and competitiveness comes from the business. Industries compete for resources and markets, measure competitiveness by examination of comparative market shares, growth or innovation and utilize competitiveness policy to progress their market performance. Porter thought the competitiveness of a country depends on four major determinants, they are factor conditions, demand conditions, supporting industries and â€Å"firm strategy, structure, and rivalry†. Although these four determinants affect the continued existence with a competitive advantage in an entire nation, their character states that they are further exact of a particular industry rather than typical of a country. The reason for that in the theory of Porter is that the essential unit of analysis for understanding rivalry is the industry. Factor conditions being the input that affects rivalry in any firm include several broad categories. That includes Human resources, Physical resources, Knowledge resources, Capital resources and Infrastructure resources. Whereas examining these factors as a precondition for building competitive advantage, it is comparatively insignificant to highlight just their involvement in a specific industry. What decides their effect on competitiveness is the quantity of effectiveness and efficiency of the method they are organizing within an industry.