Diamond of National Advantage

This article contains application of Diamond of National Advantage on the case study of Shanghai Vision Technology Co., Ltd, a medium sized manufacturer of 3D printers and other innovative products based in Shanghai, China. Main motive for internationalisation for Shanghai Vision Technology relates to attempts to increase the levels of revenues through international market expansion strategy.

The idea of Competitive Advantage of Nations proposed by Porter (1990) is based on four major points of competitive advantage jointly referred to as the Diamond of National Advantage that can be applied to the case study of Shanghai Vision Technology in the following manner:

Factor conditions within the framework of the Diamond of National Advantage are favourable towards Shanghai Vision Technology internationalisation perspectives. This is because adequate infrastructure has been developed in China mainly during the last two decades in industry of advanced technologies such as 3D printing to serve as a platform for local manufacturers to compete globally.

Demand conditions can also be specified as an important factor that contributes to the level of global competitiveness of Shanghai Vision Technology. In other words, there are not major differences in the nature of demand for 3D printers in home market in China and foreign markets. Therefore, Shanghai Vision Technology’s present successful operation in home market in China can be rightly perceived as a prerequisite for success in the global marketplace to a certain extent.

Related and supporting industries in relation to advanced technologies such as 3D printer manufacturing are effectively established in China. Moreover, China is a manufacturing home for a wide range of components of advanced technological products and cost advantage of those components can be specified as an additional point of strengths for Shanghai Vision Technology to compete in a global market.

Firm strategy, structure and rivalry is another important point within Diamond of National Advantage and the impact of this point to Shanghai Vision Technology competitiveness is also positive. This is because unlike many major US and European corporations, the majority of Chinese manufacturers are medium-sized businesses with high levels of flexibility to respond to chances in the market.

Each of the points specified above effect the levels of Shanghai Vision Technology global competitiveness in a direct and substantial manner. As it has been presented above, all four points within the scope of Diamond of National Advantage have positive impacts on the levels of competitiveness of Shanghai Vision Technology, and this fact makes the cause of internationalisation for the company reasonable.

References

Porter, M. (1990) “Competitive Advantage of Nations” Harvard Business Review