Diamond Model Advanced Economies

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Microeconomics of Competitiveness

Session 3:Introduction to the Diamond Model

This presentation draws on ideas from Professor Porters articles and books, in particular, The Competitive Advantage of Nations (The Free Press, 1990), TheMicroeconomic Foundations of Economic Development, in The Global Competitiveness Report 2007-08, (World Economic Forum, 2008), Clusters and theNew Competitive Agenda for Companies and Governments in On Competition (Harvard Business School Press, 1998), and the Clusters of Innovation Initiative(www.compete.org), a joint effort of the Council on Competitiveness, Monitor Group, and Professor Porter and ongoing research at the Institute for Strategy andCompetitiveness. Additional information may be found at the website of the Institute for Strategy and Competitiveness, www.isc.hbs.edu No part of thispublication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means - electronic, mechanical, photocopying, recording, orotherwise - without the permission of Michael E. Porter. Version: February 4, 2008

Microeconomics of CompetitivenessFebruary 4, 2008

Professor Michael E. Porter


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220080204 MOC Session 3 Copyright 2006 Professor Michael E. Porter

Perspectives on Firm Success

Internal

Internal External

External

Competitive

advantage residessolely inside acompany or in itsindustry

Competitive successdepends primarily oncompany choices

Competitive advantage (or

disadvantage) residespartly in the locations atwhich a companysbusiness units are based

Cluster participation is animportant contributor tocompetitiveness


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Competitiveness is determined by the productivity with which a nationuses its human, capital, and natural resources.

Productivity sets the standard of living (wages, returns on capital, returnson natural resources) that a country can sustain

It is not what industries a nation competes in that matters for prosperity, buthow it competes in those industries

Productivity in a national economy arises from a combination of domesticand foreign firms

The productivity of local or domestic industries is fundamental tocompetitiveness, not just that of export industries

Devaluation and revaluation do not mean that a country is more or lesscompetitive

What is Competitiveness?

Nations compete in offering the most productive environment forbusiness

The public and private sectors play different but interrelated roles increating a productive economy


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Sources of Prosperity

Inherited ProsperityInherited Prosperity

Prosperity is derived from selling orexploiting inherited natural resources

Prosperity is constrained

Government is the central actor in theeconomy as the owner and distributor ofresource wealth

Resource revenues allowunproductive policies and practices

to persist

Governments role gravitates towards thedistribution of wealth as interest groupsseek a bigger share of the pie

Prosperity is derived from selling orexploiting inherited natural resources

Prosperity is constrained

Government is the central actor in theeconomy as the owner and distributor ofresource wealth

Resource revenues allowunproductive policies and practices

to persist

Governments role gravitates towards thedistribution of wealth as interest groupsseek a bigger share of the pie

Created ProsperityCreated Prosperity

Prosperity is derived from creatingvaluable products and services

Prosperity is unlimited

Companies are the central actors in theeconomy

Prosperity can only be created byfirms

Governments role is to create theenabling conditions for productivityand foster private sector development

Prosperity is derived from creatingvaluable products and services

Prosperity is unlimited

Companies are the central actors in theeconomy

Prosperity can only be created byfirms

Governments role is to create theenabling conditions for productivityand foster private sector development


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Decomposing Prosperity

Per Capita IncomePer Capita IncomePer Capita Income

LaborProductivity

LaborProductivity

LaborUtilization

LaborUtilization

DomesticPurchasing

Power

DomesticPurchasing

Power

Local prices

Efficiency of localindustries

Level of local marketcompetition

Consumption taxes

ProsperityProsperityProsperity

Skills

Capital stock

Total factor productivity

Workforce participation rate

Population age profile

Unemployment Working hours

Standard of living

Inequality


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0

10

20

30

40

50

60

Colom

bia

South

Afric

aChile

Costa

Rica

China

Thailand

Unite

dStat

es

Russian

Fede

ration

Ghan

aLa

tvia

Vietna

m

Eston

iaSp

ain

Indon

esia

Croatia

Pakis

tan

Rwan

da

Germ

any

Finlan

d

Norway

CzechR

epublic

Swed

enJapa

n

Income InequalitySelected Countries

Gini Index

Note: Most recent Gini index data available for each country (1999 2003). Czech Republic data is from 1996.Source: World Bank, World Development Indicators, 2007.


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7 Copyright 2007 Professor Michael E. PorterCompetitiveness Master = 2007-11-14.ppt

0

0.1

0.2

0.3

0.4

0.5

0.6

CHIN

A

THAILA

ND

NORW

AY

SING

APOR

E

VIET

NAM

AUST

RALIA

JAPA

N

UNITE

DST

ATES

ESTO

NIA

KORE

A

LATV

IA

RUSS

IA

FINLA

ND

GHAN

ASP

AIN

COST

ARI

CA

SOUT

HAFRI

CA

TAIW

AN

INDO

NESI

A

MALA

YSIA

CHILE

BRAZIL

INDI

A

SLOV

AKIA

COLO

MBIA

TURK

EY

SAUD

IARA

BIA

Labor Force MobilizationSelected Countries

Employees as % ofPopulation, 2006

Note: Use most recent year available, either 2005 or 2006

Source: The Conference Board and Groningen Growth and Development Centre, Total Economy Database, November 2007

OECD average: 0.47


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0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

-6% -5% -4% -3% -2% -1% 0% 1% 2% 3% 4%

Unemployment PerformanceSelected CountriesUnemployment

Rate, 2006

Change of Unemployment Rate in Percentage Points,

1998 - 2006Source: EIU (2007)

Turkey

Spain

(-10.1%)

Slovenia

Czech Republic

Switzerland Norway

Slovakia

Latvia

Estonia

AustriaUK

Portugal

France

Germany

Greece

Netherlands

Poland(6.2%)

Sweden

Iceland

Romania

Croatia

Bulgaria

Hungary

USADenmarkIreland

Macedonia(35%)

Lithuania Ukraine

Improving Deteriorating

Japan

ColombiaIndonesia

(7.04%)

Ecuador Egypt China

Costa Rica

ChileRussia

Italy Sri Lanka

New Zealand

Korea

Thailand

Singapore

TaiwanPakistanVietnam

Canada

PhilippinesIndia

Malaysia

Australia

Finland


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Source: Groningen Growth and Development Centre and The Conference Board, 2008

Labor Input Level and GrowthWorking Hours, Selected Countries

1,300

1,600

1,900

2,200

-1.0% -0.8% -0.6% -0.4% -0.2% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0%

Hours worked per Employee, 2006

Change of Hours worked per Employee, CAGR, 1997- 2006

France

UK Belgium

Finland

Germany

ItalyDenmark

Sweden

Norway

LithuaniaPortugal

Ireland

South Korea(-1.3%)

Czech Republic

Latvia

PolandEstonia

Mexico

Slovenia

Japan

Taiwan

Netherlands

Austria

Switzerland

New Zealand

US

Hungary(1.2%)Romania

Cyprus

TurkeyGreece

Iceland

SlovakiaAustralia

Bulgaria

Canada

Spain

Singapore (2307 hours)

Chile

ColombiaVenezuela

Argentina

Brazil


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10

25

40

55

-1% 0% 1% 2% 3% 4% 5% 6% 7% 8%

Source: Groningen Growth and Development Centre and The Conference Board, 2008

Labor Productivity Level and GrowthSelected Countries

Real GDP per hourworked, US-$, 2007

Growth of Real GDP per Hour, CAGR, 2002 - 2007

France

UK

USA

BelgiumNetherlands

Finland

Germany

Italy

Spain

DenmarkCanada

Norway (70.1)

Sweden

AustraliaSwitzerland

Austria

GreeceIceland

Ireland

Japan

Portugal

New Zealand

Czech Republic

Turkey

Latvia

Estonia

Slovenia

Slovakia

Poland

South Korea

Mexico BulgariaRomania

Lithuania

Cyprus

Hungary


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Total Factor Productivity GrowthJapan vs. Selected Countries

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

China

Germany

United Kingdom

United States

Japan

Source: Marcel P. Timmer, Gerard Ypma and Bart van Ark (2003), IT in the European Union: Driving Productivity Divergence?, GGDC ResearchMemorandum GD-67 (October 2003), University of Groningen, Appendix Tables, updated June 2005

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007


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Decomposing Japans GDP per Capita Growth

-$600

-$400

-$200

$0

$200

$400

$600

$800

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Contribution to change in real GDP

per Capita (PPP adjusted)

Labor ForceParticipation

LaborProductivity

Note: Data before 2001 not available.Source: EIU (2007)

2006 value of $558 represents a 1.8% increase in GDP per capita


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0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Mexic

o

Polan

d

Czechr

epublic

Hung

ary

Slovakr

epublic

Turke

y

Portu

gal

Korea

Unite

dStat

es

Gree

ceSp

ain

NewZe

alandIta

ly

Austr

alia

Unite

dKing

dom

Cana

daJapa

n

Belgi

um

Nethe

rland

s

Austria

Luxemb

ourg

Fran

ce

Germ

any

Swed

en

Finlan

d

Switz

erlan

d

Irelan

d

Denm

ark

Norway

Icelan

d

Ratio of U.S. to Local Prices, September 2007

Comparative Domestic Cost LevelsSelected OECD Countries

Note: Calculated from comparative price levels, defined as the ratio of PPP factors to exchange rates. Ratio of U.S. to local prices represents the volume of a representativebasket of goods that can be purchased for a given amount of U.S. currency.Source: OECD (2007), authors calculations.

Higher local prices relative tothe United States

Lower local prices relativeto the United States


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Productivity

Competitive Environment

Imports Domesticinvestment

Outbound

foreign directinvestment

Domesticinnovation

Inbound

foreign directinvestment

Exports

Indicators and Enablers of Competitiveness


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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

-5% 0% 5% 10% 15% 20% 25% 30% 35%

Import SharesSelected Countries

Import Share in GDP,in %, 2006

Change of Import Share in GDP, 1996 to 2006

Russia Japan

Malaysia Singapore(38.7%, 180.6%)

Thailand

Estonia

Hungary

Lithuania

Netherlands

Costa RicaSlovenia

Kyrgyzstan

Ukraine

Latvia

China

Macedonia

Poland

Germany

Switzerland

Bahrain

Georgia

UKCanada

France

South Africa

Ireland(-14.1%)

US

Cyprus

Norway

Senegal Austria

Brazil

Mauritius

Barbados

Honduras

Morocco

New Zealand

Source: UN Comtrade (2007), authors analysis

Croatia

IndonesiaAustralia

Ghana

Finland Sweden

TurkeyMexico

Portugal KoreaIceland

Pakistan

Colombia


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-10% -5% 0% 5% 10% 15% 20%

Export IntensitySelected CountriesExports as %

GDP (2006)

Change in Growth Exports (as % of GDP), 2001 - 2006

Spain

Czech Republic

Norway

Slovakia

Macedonia Austria

Portugal

Germany

Bulgaria

Netherlands

Poland

Sweden

Latvia

Slovenia

Hungary

JapanIceland

Denmark

Estonia

Bosnia &Herzegovina

Finland

Lithuania

Greece

Russia

Romania

Ireland(-29.5%)

Ukraine

Belarus

Moldova

Italy

USD 75M =

80%

70%

60%

50%

40%

30%

20%

10%

0%

Source: EUI (2007), authors analysis

China

Brazil

Cyprus

New ZealandTurkey

Ghana

Costa Rica

Colombia

Chile

Indonesia

Pakistan

Philippines

Thailand

Taiwan

Vietnam

USA


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Inbound Foreign Investment PerformanceStocks and Flows, Selected Countries

Source: UNCTAD (2007)

-5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Inward FDI Stocks as % of

GDP, Average 2002 - 2006

FDI Inflows as % of Gross Fixed Capital Formation, Average 2002 - 2006

Japan

Saudi Arabia

Turkey

Slovenia

Hungary

Tunisia

Slovakia

Bahrain

Czech Republic

Australia

Ghana

Cyprus

Lebanon

(63.8%)

Kuwait

Poland

Rwanda USA

Libya

Jordan

Malaysia

Thailand

United Arab Emirates

New Zealand

Egypt

Morocco

ChinaYemen

Canada

India

Brazil

80%

70%

60%

50%

40%

30%

20%

10%

0%

PakistanKorea

Ireland (114.1%) Estonia

Netherlands

Vietnam Chile

Sweden

Cambodia

RomaniaColombia

Norway

South Africa

Germany

Taiwan

Indonesia

Russia

Finland

SpainPortugal


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0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

-2% 0% 2% 4% 6% 8% 10% 12%

Innovative CapacityInnovation Output of Selected Countries

Source: USPTO, 2006

Annual U.S. patents per 1million population, 2006

Compound annual growth rate of US-registered patents, 1998 2006

USA

Russia

Japan

Sweden

France

Germany

Spain

Austria

South Africa

South Korea

Denmark

Switzerland

NorwayUKIreland

Finland

Netherlands

India (24.2%)China (31.9%)

Brazil

Taiwan

Singapore(16.7%)

3,500 patents =

Poland

Canada

Israel

Hong Kong

Australia

New ZealandItaly Hungary

Mexico


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Share of countryspatents that are

highly cited, 1999*

* The share of a countrys patents filed between 1994 and 1998 that were highly cited in 1999.

Source: CHI Patent, National Science Foundation and Council on Competitiveness data. Authors analysis.

Enablers / Indicators of CompetitivenessComparative Innovation Quality

0

2

4

6

8

10

12

14

16

18

20

Unite

dStat

es

Singa

pore

Israel

Cana

daJapa

n

Swed

en

Finlan

d

Unite

dKing

dom

Nethe

rland

s

Fran

ceKo

rea

Germ

any

Denm

ark

Switz

erlan

dIta

ly

Norway

Austria


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Top Japanese Originators of U.S. Patents, 2002- 2006

Source: Patenting By Geographic Region (State and Country), Breakout By Organization, USPTO (2008)

166264Japan Total (1454 organizations)

1376NISSAN MOTOR COMPANY, LIMITED

1475TOYOTA JIDOSHA K.K.

1552SEMICONDUCTOR ENERGY LABORATORY CO., LTD.

1556OKI ELECTRIC INDUSTRY CO., LTD.1664MURATA MANUFACTURING CO., LTD.

1980SANYO ELECTRIC CO., LTD.

2100RENESAS TECHNOLOGY CORPORATION

2257RICOH COMPANY, LTD.

2600SHARP KABUSHIKI KAISHA (SHARP CORPORATION)

2954DENSO CORPORATION

3285HONDA GIKEN KOGYO KABUSHIKI KAISHA (HONDA MOTOR CO., LTD.)

4110SEIKO EPSON CORPORATION

4166FUJI PHOTO FILM CO., LTD

4534MITSUBISHI DENKI KABUSHIKI KAISHA

5105NEC CORPORATION

6143FUJITSU LIMITED

6158SONY CORPORATION

6473TOSHIBA CORPORATION

7848HITACHI, LTD

8760MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD.

9372CANON KABUSHIKI KAISHA

# of PatentsPATENTOR


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Determinants of Competitiveness

Microeconomic CompetitivenessMicroeconomic Competitiveness

SophisticationSophistication

of Companyof Company

Operations andOperations and

StrategyStrategy

State of ClusterState of Cluster

DevelopmentDevelopment

Macroeconomic, Political, Legal, and Social ContextMacroeconomic, Political, Legal, and Social ContextMacroeconomic, Political, Legal, and Social Context

A sound macroeconomic, political, legal, and social context creates the potentialfor competitiveness, but is not sufficient

Competitiveness ultimately depends on improving the microeconomic capability

of the economy and the sophistication of local competition

Quality of theQuality of the

BusinessBusiness

EnvironmentEnvironment


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Assessing the Business Environment: The Diamond

Context for

FirmStrategy

and Rivalry

Context for

FirmStrategy

and Rivalry

Related andSupportingIndustries


Factor(Input)

Conditions

Factor(Input)

Conditions

DemandConditions

DemandConditions

Access to high qualitybusiness inputs

Natural endowments Human resources

Capital availability

Physical infrastructure

Administrative infrastructure(e.g. registration, permitting)

Information infrastructure(e.g., transparency)

Scientific and technologicalinfrastructure

Availability of suppliers and

supporting industries Presence of clusters instead of

isolated firms

Sophistication of localcustomers and needs

Strict quality, safety, andenvironmental standards

Successful economic development is a process of successive upgrading, in which the business

environment improves to enable increasingly sophisticated ways of competing

Local rules and incentivesthat encourage investment andproductivity

e.g. salaries, incentives forcapital investments,intellectual property protection

Vigorous local competition Openness to foreign and local

competition


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Issues in Diamond Analysis

Categorizing influences by part of the diamond

Arrows in the diamond Understanding cause and effect


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Context forFirm

Strategyand Rivalry

Context forFirmStrategy

and Rivalry

Related andSupporting

Industries

Related andSupporting

Industries

Factor(Input)

Conditions

Factor(Input)

Conditions

DemandConditions

DemandConditions

Levels of Influence on the DiamondSelected Examples

National E.g., capital market conditionsRegional E.g., local public education

system; university assetsCluster E.g., cluster-specific

research institutions

Regional E.g., breadth of regional economy; IFCs

Related Clusters E.g., common local suppliers

Cluster E.g., existence of supplier industries

National E.g., intellectual property

legislation; antitrust policyRegional

E.g., state tax policyCluster

E.g., number of localcompetitors

Cross-National E.g., Nordic Mobile Telephone

network; character-basedAsian languages

National E.g., environmental regulation;

consumer rights legislationRegional

E.g., state consumerprotection laws

Cluster E.g., sophistication of local

customers


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Measuring Microeconomic Capacity

The Business Competitiveness Index

Measures the overall level of sustainable prosperity that can be supportedgiven a countrys current competitiveness

Highlights strengths and weaknesses of a countrys business environmentrelative to its overall level of current prosperity

Reveals patterns of competitive evolution of individual countries

Country-level BCI data will be distributed to project teams once countries areselected.


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0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000United States

Switzerland

Italy

DenmarkIreland

India

Business Competitiveness Index

2006 GDP per Capita(PPP- adjusted)

Malaysia

Source: Global Competitiveness Report 2007

SwedenKuwait Finland

Germany

Qatar

Norway

HighLow

Greece

Argentina

SpainBahrain

Libya

IndonesiaKenya

Tunisia

Korea

Colombia

Variation in BCI score explains 82%of variation in GDP per capita

Ranking Microeconomic CompetitivenessBusiness Competitiveness Index, 2007

IcelandHong Kong

New Zealand

Estonia

Japan

Chile

Thailand

Costa Rica

Jordan

Russia

Venezuela

Hungary

Cyprus

SloveniaPortugal

Israel

TaiwanFrance

Australia

LatviaPoland

SlovakiaLithuania

Czech Republic

Saudi ArabiaSouth Africa

China

Brazil

TanzaniaNigeria

Pakistan Philippines

Peru

Ukraine

Canada


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Company SophisticationRelative Position of Japanese Companies, 2007

Extent of incentive compensation 46

Willingness to delegate authority 19

Competitive DisadvantagesRelative to GDP per Capita

Competitive AdvantagesRelative to GDP per Capita

Change up/down of morethan 5/10 ranks since 2002

Note: Rank versus 74 countries; overall, Japan ranks 19th in 2006 PPP adjusted GDP per capita and 10h in Business Competitiveness.Source: Institute for Strategy and Competitiveness, Harvard University (2007)

Degree of customer orientation 1

Production process sophistication 2

Capacity for innovation 3Company spending on research and 3development

Nature of competitive advantage 4

Breadth of international markets 5

Extent of regional sales 5Value chain breadth 5

Extent of staff training 6

Control of international distribution 10


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Availability of scientists and engineers 1

Railroad infrastructure 2

Quality of electricity supply 3

Quality of telephone/fax infrastructure 6

Cooperation in labor-employer relations 7

Local equity market access 8

Quality of scientific research institutions 11

Overall infrastructure quality 13

Efficiency of legal framework 15

University/industry research collaboration 16

Reliability of police services 17



Quality of management schools 52

Decentralization of economic policymaking 51

Ease of access to loans 34

Low business costs of corruption 29

Financial market sophistication 29

Air transport infrastructure quality 28

Venture capital availability 27

Laws relating to ICT 24Quality of primary education 22

Quality of math and science education 22

Judicial independence 19

Quality of port infrastructure 18

Factor (Input) ConditionsJapans Relative Position 2007

Factor(Input)

Conditions

Factor(Input)

Conditions




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0

20

40

60

80

100

DoingBusiness

Closing aBusiness

ProtectingInvestors

GettingCredit

EmployingWorkers

TradingAcrossBorders

EnforcingContracts

Dealingwith

Licenses

Starting aBusiness

RegisteringProperty

PayingTaxes

Ease of Doing Business RankingsJapan, 2007

Ranking, 2007 (of178 countries)

Source: World Bank Report, Doing Business (2008)

Favorable Unfavorable

Median Ranking,OECD

Japans per capita GDP rank: 10


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RankRank

Innovative Capacity Index2004 Rankings

123

456789

10111213141516

17181920

123

456789

10111213141516

17181920

Scientists &Engineers Index

Cluster Environ-ment Index

Operations andStrategy Index

FinlandIceland

Japan

SwedenUnited States

NorwaySingapore

SwitzerlandRussia

DenmarkAustraliaGermanyCanadaBelgiumKoreaFrance

TaiwanUnited Kingdom

NetherlandsGeorgia

SingaporeLuxembourg

Taiwan

FinlandCanada

United KingdomUnited States

MalaysiaAustralia

IrelandJapanIsrael

AustriaGermany

NetherlandsNorway

Hong KongTunisia

DenmarkFrance

JapanUnited States

Taiwan

FinlandHong Kong

United KingdomKorea

SingaporeDenmark

CanadaSwitzerlandGermanySweden

IndiaItaly

Norway

MalaysiaFranceAustriaU.A.E.

United StatesFinlandSweden

TaiwanJapanIsrael

SingaporeGermany

Switzerland

DenmarkUnited KingdomHong Kong

IcelandNetherlands

AustraliaCanada

AustriaNorwayIreland

New Zealand

Germany

JapanDenmark

IsraelFinland

SwitzerlandSweden

United StatesNetherlands

BelgiumFranceUnited Kingdom

TaiwanSingapore

AustriaNorway

LuxembourgHong Kong

IrelandIceland

Innovation PolicyIndex

LinkagesIndex

Source: Unpublished data using the methodology described in Michael E. Porter and Scott Stern, Ranking National Innovative Capacity: Findings from the NationalInnovative Capacity Index, Global Competitiveness Report 2003-2004.

Note: This dataset willbe made available on

course website.


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BCI Value, 2007

Dynamism Score, 2002 - 2007

Rate of Competitiveness Improvement2002 - 2007

High

Low

Below average Above averageAverage

High-incomeMiddle-incomeLow-income

ItalyHungary

Trinidad and Tobago

Zambia

Brazil

Finland

Dominican Republic

Australia

Zimbabwe

United Kingdom

Spain

France

United States

Netherlands

New Zealand

Sweden

Canada

China

Uganda

Poland

Tanzania

Latvia

Jamaica

Czech Republic

Guatemala

Honduras

Malaysia

Indonesia

Korea

TurkeySri Lanka

Peru

Ecuador

Lithuania

Romania

Mali

Kenya

Chad

Thailand

Norway

Estonia

Pakistan

Costa Rica

Panama

Nicaragua

India

Bangladesh

JapanHong Kong

Slovenia

Slovakia

Source: Global Competitiveness Report 2007

Chile

Denmark

Ireland

Taiwan

Germany

Greece

Switzerland

Argentina

Paraguay

Mozambique


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0

5

10

15

20

25

30

35

40

45

Hourly Wage in

Manufacturing (USD),2005

Brazil

Finland

Denmark

Canada

Hungary

Italy

Mexico

Korea

Norway

Germany

Hong Kong

TaiwanSingapore

Source: Global Competitiveness Report2005-2006 and US Bureau of Labor Statistics

Competitiveness versus Wage Level Across Countries

Business Competitiveness Index 2005 HighLow

Australia

AustriaBelgium

France

Greece

Czech Republic

Ireland

Israel

Japan

Poland

Netherlands

New Zealand

Portugal

Spain

Sweden Switzerland

UKUSA

Sri Lanka


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Backup


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Demand ConditionsJapans Relative Position 2007



DemandConditions

DemandConditions

Buyer sophistication 5Stringency of environmental regulations 10

Government procurement of advanced 12technology products

Presence of demanding regulatory 12

standards



R l d d


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Related and Supporting IndustriesJapans Relative Position 2007





Local availability of process machinery 1

Local supplier quantity 2

Local supplier quality 3

Local availability of specialized research 5and training services




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Context for Strategy and RivalryJapans Relative Position 2007

Extent of market dominance 3

Intensity of local competition 4

Lack of favoritism in decisions of 12government officials

Effectiveness of antitrust policy 14

Intellectual property protection 15



Absence of trade barriers 42

Property rights 32

Efficacy of corporate boards 23

Context for FirmStrategy

and Rivalry

Context for FirmStrategy

and Rivalry



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