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. make sure its 360 words ( 1_factor endowments, 2_demand conditions, 3_related and supporting industries, 4_ firm strategy , structure and rivalry)

Answer 1

1) FACTOR CONDITIONS:- THIS HEAD COVERS THE NATION'S POSITION LIKE, AS SKILLED LABOR OR INFRASTRUCTURE WHICH IS IMPORTANT IN INDIAN SOFTWARE INDUSTRY.

THERE MUST BE AMPLE EVIDENCE THAT THE FACTORS SHOULD BE INFLUENCED FORM OUTSIDE THE HOME COUNTRY.  CHOICE OF FACTORS IS IMPORTANT TO ENSURE THAT THE FIRM HAS THE COMPETENCE REQUIREMENT FOR SUCCESS. THE ARE MANY FACTORS WHICH DIRECTLY AND INDIRECTLY PUTS IMPACT ON WORKING OR SUCCESS OF INDUSTRY WHICH ARE NEGLECTED IN THIS MODEL.

2)DEMAND CONDITIONS:- THE NATURE OF HOME MARKET DEMAND FOR THE INDUSTRY PRODUCT OR SERVICE.

PORTER'S MODEL FOCUSES ON MANUFACTURERS, BANK AND MANAGEMENT CONSULTANCY FIRMS ONLY. THE SERVICE BASED COMPANIES LIKE SOFTWARE COMPANIES ARE NOT COVERED UNDER THIS MODEL. AS THE SERVICE COMPANIES ALSO COVER LARGE PART OF WHOLE BUSINESS WORLD.THIS DO NOT HELPS IN OVERALL ANALYZING OF BUSINESS WORLD OR WHOLE INDUSTRY.

3)RELATED AND SUPPORTING INDUSTRIES:- THE PRESENCE OF RELATED INDUSTRIES THAT ARE INTERNATIONALLY COMPETITIVE.

PORTER'S MODEL ONLY FOCUSES ON DOMESTIC COUNTRY RATHER THAN THE FOREIGN MARKETS OR FOREIGN COMPETITORS. PORTER MODEL IS MADE BY FOCUSING ON ONLY FEW DEVELOPED COUNTRIES WHERE THE OTHER COUNTRIES HAVE BEEN MISSED OUT.

4)FIRM STRATEGY, STRUCTURE AND RIVALRY:- THE CONDITIONS IN THE NATION GOVERNS HOW THE COMPANIES ARE CREATED, MANAGED AND ORGANISED.

THE PORTER MODEL DOES NOT PROPERLY TELLS THE ROLE OF MNCs. THE STRATEGIES OF MNCs OR THE FOREIGN COMPANIES ARE NOT COVERED IN THIS MODEL WHICH PLAYS VERY IMPORTANT ROLE IN ANY INDUSTRY. THE STRUCTURE OR THE RIVALRY'S POLICIES OF SOFTWARE INDUSTRY HELP THEM TO MARK IMPORTANCE CHANGES IN THEIR SERVICES WHICH ARE FAILED TO TELL BY THIS MODEL.