Analysis of Porter’s Diamond Model of National Advantage

Michael Porter introduced the diamond model of national competitive advantage (1990) to explain why a number of countries are more competitive than others and why a number of businesses within the countries are more competitive. Porter’s Diamond Model proposes that the national home base of an industry plays an important role in achieving an advantage on a universal scale. This home base contributes the essential factors that will support the organisations in building advantages in global competition.

Porter identified four determinants in attaining a national competitive advantage he concludes that a combination of the four determinants within a nation has an enormous influence on the competitive strength of the firms located there.… Read the rest

Country of Origin Effect in International Marketing

The Country of Origin Effect is  the influence that the manufacturer country has on the positive or negative consumer judgment. Studies have shown that when a customer becomes aware of the country of origin of a product his/her image about the product is influenced either positively or negatively according to his perceptions. Consumers tend to have a stereotype about product and countries that have been formed by experience, hearsay, myth. These stereotypes are generally broad and vague according to which they judge a specific country or a specific product to be the best: French Perfumes, Italian Leather, Chinese Silk and Japanese Technology are all examples of such stereotypes.… Read the rest

Role of Cultural Sensitivity in International Business

Culture plays an important role in life of people as it is closely associated with them. It is very necessary to understand what a culture requires and what emotions are attached to it. Different countries follow different culture and because of this some things will be acceptable in some countries whereas the same things will appear to be rude in other countries because of culture difference. People who are culture sensitive will know that the difference between the culture of different people can create differences in their relationship with respect to the way they behave, communicate etc. Hofstede defined culture as “the manner in which the mind is programmed such that it can differentiate the people of one category with those of other.”… Read the rest

Internationalization Concept -The Uppsala Internationalization Model

Internationalization consists of standardized products or service through globally standardized marketing and production processes that target standardized customer needs. Internationalization can be described as the process of increasing involvement in international operations. Another definition denotes internationalization as the process of adapting firms’ operations (strategy, structure, resources, etc) to international environments. Both definitions emphasize the crucial fact that internationalization needs an overall support from the organisation as it is changing the environment to expand in various manners the process mostly consists of macro factors to evolve.

The Process of Internationalization

Internationalization fundamentally alters the price-setting strategies of domestic economic agents. This is true for agents operating in product markets, factor markets and financial markets.… Read the rest

Glocalization – Definition, Advantages and Disadvantages

Globalization is one of the most important phenomena of the recent past and of the future. The term “Globalization” describes an ongoing process by which regional economies, societies and cultures are becoming more integrated through a dramatically increased global network of technological, economic, political and cultural exchanges. In specifically economic contexts, the term refers to the integration of national economies into the international economy through trade, particularly trade liberalization or free trade, foreign direct investment, capital flows, migration and the spread of technology. This worldwide phenomenon of interaction among the countries is driven largely by advances in communication, transportation and legal infrastructure as well as the political choice of countries to open cross-border links in international trade and finance.… Read the rest

International Trade and Investment

Today, business is acknowledged to be international and there is a general expectation that this will continue for the foreseeable future. International business may be defined simply as business transactions that take place across national borders. This broad definition includes the very small firm that exports (or imports) a small quantity to only one country, as well as the very large global firm with integrated operations and strategic alliances around the world. Within this broad array, distinctions are often made among different types of international firms, and these distinctions are helpful in understanding a firm’s strategy, organization, and functional decisions (for example, its financial, administrative, marketing, human resource, or operations decisions).… Read the rest