Secondly domestic existence of all conditions is not

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Secondly, domestic existence of all conditions is not necessary with globalization. The industries on which this theory is premised grew when companies’ access to competitive capabilities was decidedly more domestically focused. As mentioned by John D. Daniels, Lee H. Radebough and Daniel P. Sullivan (International Business, environments and operations , Fourteenth Editions, Pearson) we can see how globalization affects each of the four conditions: 1. Observations of foreign or foreign-plus-domestic, rather than just domestic, demand conditions have spurred much of the recent growth in Asian exports. In fact, such Japanese companies as Uniden and Fujitech target their sales almost entirely to foreign markets. 2. Companies and countries are not dependent entirely on domestic factor conditions. For example, capital and managers are now internationally mobile. 3. If related and supporting industries are not available locally, materials and components are now more easily brought in from abroad because of advancements in transportation and the relaxation of import restrictions. In fact, many MNEs now assemble products with parts supplied from a variety of countries. 4. Companies react not only to domestic rivals but also to foreign-based rivals they compete with at home and abroad. Thus the absence of any of the four conditions from the diamond domestically may not inhibit companies and industries from becoming globally competitive. QUESTION 12: Compare import substitution policies with export-led development policies. Many developing countries try to stimulate an industrial base by using trade protection to stimulate local industrialization. Import substitution policies and export-led development
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policies are two trade and economic policy aiming to speed up the industrialization process of a country. Import substitution policies consist in the protection of domestic producers from foreign competition by substituting domestic production of goods with domestic source of production and supply . This is done by extensive trade barriers to protect domestic industries from import competition. From a development perspective a policy of calling for the local production of goods and services that would otherwise have to be imported. Export-led development is a trade and economic policy aiming to speed up the industrialization process of a country by exporting goods for which the nation has a comparative advantage . Export-led strategies are applied by governments on the assumption that they can improve not only foreign exchange earnings but also increase productivity and growth. Many developing countries have comparative advantages over the developed countries in the production of some goods and services. Thus, the strategy involves the expansion of these sectors and concentrating on the export of these goods and services.
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