National Competitive Advantage Framework

• Factor conditions – A nation’s endowments in terms of national, human, and other

resources

• Demand conditions– Specific characteristics of demand in a firm’s domestic market

• Competitive intensity– Highly competitive environments tend to stimulate firms to

outperform others

• Related and supporting industry – leadership in related and supporting industries can also foster world-

class competitors in downstream industry– Complementarity

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Quotes from and outside source• Morgan States (2007), “The evolution of economic organizations throughout the world is influencing the

nature of competition due to the technological advantages, changes in the operating environment, and managerial developments. The number of players in the world economy is increasing significantly and competition beyond national borders is creating a complicated business environment. Due to this ever-growing pool of competitors companies find more difficulties in distinguishing their core competencies and achieving a competitive advantage. “(Pg. 62)

• Morgan States (2007), “In order to sustain its competitive advantage, a company should be able to create

support and apply an organizational culture responsive and suitable to the global competitive environment. In other words, how companies could meet the increasingly complex world markets’ challenges and respond quickly to new opportunities would contribute to the sustainability to their competitive advantage.” (pg. 66)

• Sehic & Rahimic State (2006), “Clusters are important for companies but their role in terms of competitive advantages also has a deep impact on position of a region or a country. Consultants in McKinsey show that clusters will represent the key factor of future economic development in Europe and the world (McKinsey 2002). The clusters are the result of a specialization process between regions and region-based competitive advantages. The phenomenon of specialization is not a new matter. We can find its roots in development of centers for shipbuilding in ancient countries, in industry of glass in Boehmen. Today, leading clusters of modern industrial society can be presented through example of Silicon Valley in California” (Pg. 1409)

Regional Clusters

• Regional cluster– A group of interconnected companies and institutions

in a specific industry, located near each other geographically and linked by common characteristics

– Knowledge spillover• Positive externalities that are regionally constrained• Exchange of ideas among firms in a cluster

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EXHIBIT 10.9 Mapping a Regional Cluster: Research Triangle

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CHAPTERCASE 10/Consider This…

• Hollywood film industry enters global market to explore new revenue stream!

• Will we see a decrease in the production of regional and U.S.-centered movies? Or will small independent movie producers pick up a higher share of the domestic U.S. market?

• Will piracy become a significant concern when Hollywood filmmakers go global? How to combat the piracy?

• How would you prioritize which nations to expand distribution into if you were working for a major Hollywood movie studio?

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References Sehic, D., & Rahimic, Z. (2006). IMPROVING COMPETITIVE ADVANTAGES OF B&H ECONOMY THROUGH CLUSTERS. Paper presented at the 1408-1420. Retrieved from http://search.proquest.com/docview/217762484?accountid=28644

Moran, F., Palmer, D. W., & Borstorff, P. C. (2007). AN EXPLORATORY ANALYSIS OF THE RELATIONSHIP BETWEEN ORGANIZATIONAL CULTURE, REGIONAL CULTURE, CAUSAL AMBIGUITY AND COMPETITIVE ADVANTAGE IN AN INTERNATIONAL SETTING. Journal of International Business Research, 6(1), 61-75. Retrieved from http://search.proquest.com/docview/215467926?accountid=28644