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Project of strategic management

Topic: Porters national competetiveness model (single Diamond model)

Submitted to:Vijesh Jain

DIAMOND MODEL

Submitted by:Group g Amit Bhatia Baninder guron Jitendra sharma Omraj singh Rijushree gogoi Shubham sethi Vaibhav gupta

The diamond model for the competitive advantage of nations offers a model that can help understand the comparative position of a nation in global competition .The model can also be used for major geographic region.

Interlinked advanced factors for competitive advantage : FACTOR CONDITIONS: Factor conditions are those that helps in

Interlinked advanced factors for competitive advantage :

FACTOR CONDITIONS:

Factor conditions are those that helps in best utilizing the countries land ,labour ,capital etc .so in the same way In Larsen and Toubro case they provide products and services to foreign companies that are actively sourcing from India for cost savings, trying to take advantage of the country’s low-cost but highly productive labour force

DEMAND CONDITIONS:

If the local demand is high company can take the competitive advantage at national level also.similarly happens with L&T They see opportunities in the supply of equipment, turnkey projects, and construction.” L&T told Indian media that they expects orders from the region to reach US$458m this year, or almost double from the previous year, and US$1 bn in 2009.Moreover there is a demand for oil-refineries in Middle East also

Larsen & Toubro Ltd (L&T) has announced that the Company has bagged four orders worth Rs 1687 crore from the

Government of Rajasthan, Bhushan Steel-Orissa, SAIL Bokaro Steel Plant and the Damodar Valley Corporation (DVC). The orders are for water supply projects, sinter plant and cold roll mill and a coal handling plant. The Construction Division of Larsen & Toubro has secured an EPC contract worth Rs 635 crore from the Public Health Engineering Department, Government of Rajasthan, for Design, Supply, Build and Commissioning of Banner Water Supply Project. The scope of work involves laying of pipelines of various diameter in Mild Steel extending to approximately 220 km; design and construction of 172 MLD Water Treatment Plant, Raw Water Reservoirs including supply and installation of Pumping machinery, Electrical, Instrumentation and Automation control systems. The project is scheduled to be completed in 18 months. When completed this project will cater safe drinking water to the people of Jaisalmer and Barmer including Army bases located there, benefirting the public at large. In another development L&T - ECC in consortium with Outotec GmbH has bagged a Rs 555 crore Sinter Plant order from Bhushan Steel Ltd (BSL). The project is located at Meramandali, Orissa

SO it is concluded that demand conditions for L&T are highly favourable

RELATED & SUPPORTED INDUSTRIES:

Larsen & Toubro is different. For now, it relies largely on demand from India’s central and state governments and domestic enterprises. But the company is starting to actively seek and bid for projects overseas.In the last three months, the National Highway Development Program, the central body implementing road projects, awarded contracts worth about US$1 bn, 16% of which went to L&T. Recently, the company also won contracts to build international airports in the prospering cities of Hyderabad and Bangalore. Among recent private-sector projects, Tata Steel awarded L&T last month with a US$356m contract to build a new blast furnace. “L&T is a macroeconomic play,” says the analyst, referring to the company’s stock. “It is the best out there if you want to capture the growth of the Indian industrial sector, which is a macroeconomic parameter.”

FIRMS STRATEGIES STRUCTURE AND RIVALRY:

. While local competitors for L&T are increasingly becoming more aggressive in bidding for public and private ventures, analysts see L&T’s market share protected for some time to come, thanks both to its scale and the highly fragmented nature of the sector. (L&T’s revenues are seven times that of its nearest competitor, Gammon India.) “L&T’s competitive advantage is scale of operation and experience over the years, so the cost structure of the company is the best among local players,” says an analyst with a local brokerage. “Handling any large-scale contract which involves complexity is L&T’s forte.”he that global engineering giants such as Bechtel, which is four times the size of L&T, are more capable of undertaking large-scale projects at low margins, owing to the scale of their operations. L&T, for example, has yet to make a 5,000-megawatt power plant anywhere.

Ultimately, two things will determine how well L&T can position itself in the international arena: the growth of the domestic sector, which will give it scale and cost-competitiveness, and the strength of its balance sheet to be able to take on higher-value but bigger-risk projects.

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