Porter 1990 reveals that four attributes of the home

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industry. Porter (1990) reveals that four attributes of the home country environment have an effect on the context which allows firms to gain and sustain competitive advantage. These are: factor conditions, demand conditions, related and supporting industries, and context for firm strategy and rivalry. In Porter‘s view, two exogenous factors, government and chance, influence the functioning of these four major determinants as shown in the figure 2.2. Man et al. (2002) proposed four characteristics of competitiveness: long-term orientation (focusing on long-term performance), controllability (managing resources and capabilities), relativity (performance relative to other firms) and dynamism (concentrating on a dynamic process to generate the desired outcomes). From a micro-meso perspective, the concept of competitiveness at the company and industry levels has also been adopted in different contexts. Industrial competitiveness is considered as the ability of a company or industry to meet challenges posed by foreign competitors (US Department of Energy, World Competitiveness Yearbook 2003 (IMD 2004)). Ivancevich et al. (1997) defined firm competitiveness as; ―The degree to which a firm can, under free and fair market conditions, produce goods and services that meet the test of international markets while simultaneously maintaining or expanding the real incomes of its
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34 employees and owners.‖ Industry bodies and firms are keen to understand and improve their competitiveness, as competitiveness is the key to the success or failure in a market economy (Porter 1980). Therefore, competitiveness at the firm level is mainly measured by the competitive capability of a firm to earn desired competed results (profits, and market share) and ensure its future development. Figure 2-2 Porter’s Diamond Theory Because the focus of this study is the competitiveness of real estate development businesses, competitiveness will now be reviewed in more detail from a micro perspective, i.e. organisation or firm competitiveness. 2.3.3 Corporate Competitiveness As pointed out by Krugman (1997), at the individual firm level competitiveness is a comparative concept of the ability and performance of a firm, sub-sector or country to see and supply goods and/or services in a given market. In fact, the
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35 competitiveness concept includes various disciplines such as comparative advantage, price competitiveness perspective, strategy and management perspectives, and the historical and socio-cultural perspectives (Man et al. 2002). Several different micro perspectives of competitiveness have been proposed in existing literature. Waheeduzzaman and Ryans (1996) maintain that the study of competitiveness involves multidimensional concepts and disciplines. Flanagan et al. (2007) have made a critical review and provided valuable insights into firms‘ competitiveness. They summarised three main schools of thought as shown in Table 2.1. These are: i) competitive advantage and competitive strategy models (i.e. Porter 1980); ii) resource-based view (RBV) and core competence approach (e.g. Wernerfelt 1984; Prahalad and Hamel 1990; Barney 1991); and, iii) the
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