Related and supporting industries

Competitive supplying industries will reinforce

innovation and internationalization in industries.

Related industries can use and co-ordinate

particular activities in value chain together.

Example shoe and leather industry in italy.

Demand conditions
A strong domestic market stimulates the firm

from being a startup to a slightly expanded and bigger organization.

Example German automobile companies.

Firm Strategy , Structure and Rivalry

Heavily influenced by structures of ownership

and control.
Domestic rivalry and search for competitive

advantage can help provide organizations with bases for achieving such advantage globally.
Example Japanese automobile industry.

Factor Conditions
Factor Endowments A nations position in

factors of production such as skilled labour or infrastructure necessary to compete in a given industry
Basic factor endowments Advanced factor endowments

Basic factor Endowments

Basic factors Natural resources Climate Geographic location Demographics

Advanced factor endowments

If a country has no basic factors , it must

invest in advanced factors.

Communication Skilled labour Research Technology Education

Government
Supply conditions Demand conditions Competition between firms

Chance Events
Chance events are occurrences that are

outside of control of a firm

Create discontinuities For example, radical innovations, unexpected

oil prise rises, revolutions, wars, etc.