Question

The Indian software industry has become one of the leading global markets. According to Michael Porter, a nation’s competitiveness depends on the capacity of its leading industries to innovate and upgrade. Critically discuss Porter’s diamond of national competitive advantage. Illustrate your answer by referring to Indian software industry as an example.

Answer 1

EXPLANATION:

Through a model that recognizes the competitive advantage of nations or groups because of other available factors and that describes how governments can serve as a mechanism to boost the role of one country in an globally competitive economic climate, the porter diamond model better known as the porter diamond theory of national advantage. Michael Porter, an accredited company strategy and competition authority and founder of the Strategy and Economic Competition Institute, created the model.The diamond porter suggests that countries will build new opportunities for themselves, such as strong technologies, skilled labor and government support for the economy of a nation. The following are five types of porters:

• Company strategy , structure and rivalry are important in that competition contributes to the discovery of ways of growing productivity and creating technical advances for companies. There are large concentrations of market influence, degree of competition and the potential of rivalry firms to join the national market.
• Conditions of factor refers to the available natural resources, capital and human resources. For example , some countries are very rich in natural resources such as India which is very rich in coal , iron ore, manganese ore. This explains why India is one of the biggest coal , iron and manganese exporters worldwide.
• Global and domestic production have a major impact on how desirable a country's industries are. A wider competition means more challenges, but it provides opportunities as a business to expand and develop. Also induces companies to grow, innovate and enhance quality due to sophisticated demand conditions of local clients. For instance, India 's software industry is gaining increasing demand day after day for software as it is increasingly advanced in technology, and so the demand is also on the rise.
• The related and supporting industries are the base upon which the focal industry will stand. the existence of related and supporting industries. To order to generate additional value and become profitable, businesses have always been reliant, as we seen with Value Net, on alliances and collaborations with other firms.
• Government: government's role as a catalyst and a challenger in the model of porter. Porter does not believe in a free market in which the government leaves everything invisible in the economy.

Such ideas can be extended to the Indian tech industry and it shows that they have a competitive advantage based on variables like technical expertise, regional competence, clustering and government policy. Understanding its sector growth in India remains a critical focus for policymakers, for instance entrepreneurs: companies like IBM and Accenture, due to their ability to carry out complex projects for customers, have raised their head numbers to 100,000 people in India.