Related and supporting industries

y Competitive supplying industries will reinforce innovation and internationalization in industries. y Related industries can use and co-ordinate particular activities in value chain together. y Example shoe and leather industry in italy.

Demand conditions
y A strong domestic market stimulates the firm from being a startup to a slightly expanded and bigger organization. y Example

German automobile companies.

Firm Strategy , Structure and Rivalry

y Heavily influenced by structures of ownership and control. y Domestic rivalry and search for competitive advantage can help provide organizations with bases for achieving such advantage globally. y Example

Japanese automobile industry.

Factor Conditions
y Factor Endowments A nation s position in factors of

production such as skilled labour or infrastructure necessary to compete in a given industry

y Basic factor endowments y Advanced factor endowments

Basic factor Endowments

y Basic factors y Natural resources y Climate y Geographic location y Demographics

Advanced factor endowments

y If a country has no basic factors , it must invest in

advanced factors.
y Communication y Skilled labour y Research y Technology y Education

Government
y Supply conditions y Demand conditions y Competition between firms

Chance Events
y Chance events are occurrences that are outside of

control of a firm
y Create discontinuities y For example, radical innovations, unexpected oil prise

rises, revolutions, wars, etc.