Chapter 5 Critical thinking - Shawnae Cristobal...

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Shawnae Cristobal International Business Professor Rayan September 16, 2008 Box #283 Chapter 5: Critical Thinking Questions Page 194 #s 6,7 6. Porter’s theory of national competitive advantage argues that four broad attributes of a nation shape the environment in which local firms compete, and that these attributes promote or impede the creation of competitive advantage. These attributes are: factor endowments, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry. Porter goes on to argue that firms are most likely to succeed in industries in which the diamond (which are the four attributes collectively) is favorable. Porter adds two factors to the list of attributes described above: chance and government policy. The New Trade theory addresses a separate issue. This theory argues that due to the presence of substantial scale economies, world demand will support only a few firms in many industries. Underpinning this argument is the notion of first-mover advantages,
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This note was uploaded on 04/13/2010 for the course BUSINESS 121581 taught by Professor Schils during the Spring '10 term at École Normale Supérieure.

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Chapter 5 Critical thinking - Shawnae Cristobal...

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