Porter's Diamond Framework in a Mexican Context

By Hodgetts, Richard M. | Management International Review, March 1993 | Go to article overview

Porter's Diamond Framework in a Mexican Context


Hodgetts, Richard M., Management International Review


Abstract

* The Porter diamond model has been widely used as a basis for examining international competitive strategies. This article examines the ways in which Mexico is linking itself to the U.S. economy via a double diamond.

* The strategies of Mexico's leading clusters--petrochemicals and automobiles--are considered within the double diamond framework.

Key words

* A double diamond model is already being used by Mexican corporations to both create and sustain economic progress.

Porter Revisited

Porter's "diamond" model is well-known to both researchers and practitioners.

In way of reprise, the model is based on four country-specific determinants and two external variables. These include:

1. Factor conditions such as: (a) the quantity, skills, and cost of personnel; (b) the abundance, quality, accessibility, and cost of the nation's physical resources; (c) the nation's stock of knowledge resources; (d) the amount and cost of capital resources that are available to finance industry: and (e) the type, quality, and user cost of the nation's infrastructure.

2. Demand conditions such as: (a) the composition of demand in the home market: (b) the size and growth rate of the home demand; and (c) the mechanisms through which domestic demand is internationalized and pulls a nation's products and services abroad.

3. Related and supporting industries such as: (a) the presence of internationally competitive supplier industries that create advantages in downstream industries through efficient, early, or rapid access to cost-effective inputs; and (b) internationally competitive related industries which can coordinate and share activities in the value chain when competing or those which involve products that are complementary.

4. Firm strategy, structure, and rivalry such as: (a) the ways in which firms are managed and choose to compete; (b) the goals that companies seek to attain as well as the motivations of their employees and managers; and (c) the amount of domestic rivalry and the creation and persistence of competitive advantage in the respective industry.

The two outside forces, also affecting the competitiveness of a nation, but not direct determinants, are these:

1. The role of chance as caused by developments such as: (a) new inventions; (b)

political decisions by foreign governments; (c) wars; (d) significant shifts in world financial markets or exchange rates; (e) discontinuities in input costs such as oil shocks; (f) surges in world or regional demand; and (g) major technological breakthroughs.

2. The various roles of government including: (a) subsidies; (b) education policies; (c) actions toward capital markets; (d) the establishment of local product standards and regulations; (e) the purchase of goods and services; (f) tax laws; and (g) antitrust regulation (Porter, pp. 69-130).

Figure 1 provides an illustration of the complete system of these determinants and external variables. As can be seen, each determinant affects the others and all, in turn, are affected by the role of chance and government.

[FIGURE 1 OMITTED]

Critique and Evaluation of the Porter Model

In applying Porter's model to international business strategy, it is important to realize eight key facts. First, the government is of critical importance in influencing a home nation's competitive advantage. For example, it can use tariffs as a direct entry barrier to penalize foreign firms, and it can employ subsidies as an indirect vehicle for penalizing foreign-based firms. However, the problem with government actions such as these is that they can backfire and end up creating a "sheltered" domestic industry that is unable to compete in the worldwide market (Rugman and Verbeke 1990).

Second, while chance is a critical influencing factor in international business strategy, it is extremely difficult to predict and guard against. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Porter's Diamond Framework in a Mexican Context
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.