Porter Diamond

Question 1

Porter Diamond, correctly referred to as the Porter Diamond Theory of National Advantage,
is a model designed to help understand the competitive advantage of countries or groups
because of some of the factors available to them and to show how governments can act as
catalysts to improve the country's situation in a competitive economic environment
Worldwide. It is a proactive economic theory, not a theory that simply determines the
competitive advantages that a country or region may enjoy. Porter Diamond points out that
countries can create new business advantages for themselves, such as the strong technology
industry, skilled labor and government support for the country's economy. Most traditional
theories of the world economy differ by mentioning the elements or factors that the country
or region has in its nature, such as land, location, natural resources, employment and
population size as key determinants of the country's competitive economic advantage.
Another Porter Diamond application is in the company's strategy to be used as a framework
for analyzing the comparative advantages of investment and working in different national
markets.

When it comes to understanding the economies of the United States and China, some often
believe that the United States has a stronger economy. This has been the case for several
decades but recent studies show that China's economy is stronger than the United States. In
short, in recent years, the Chinese have been more productive than Americans. Many people
can understand this concept. Both economies continue to grow and prosper. The United
States and China are attracting trillions of dollars a year, which may not seem to have a lot of
money depending on the perspective of the situation. The Americans have produced and
pulled back three times what the Chinese have done over the past 10 to 20 years. One of the
factors that helped the Chinese become a more powerful nation was their ability to buy
goods. In short, it seems that some have underestimated China's ability and decisions for its
economy. Among other decisions that made a difference for China, a decision to make
changes on how to buy domestic products at the international level. To understand the
competitive advantage of each country, the focus will be on product conditions, and demand
conditions of Porter's theory.

Factor Condition:

Including inputs for the production of goods and services. Basic factors for doing business
include natural resources and labor; while advanced factors include infrastructure, such as
communications systems. Skilled personnel are part of the specialized factors. If any country
is granted all these factors of production, it will be successful in the global market. However,
there may be countries that have advanced and specialized factors but lack basic factors.

Porter divides items into two categories: basic elements and advanced elements. Among
them, the former has a more important role in competitive advantage. Since the 1980s,
although technology occupies an important position in industry, the labor force still occupies
an important position that cannot be shaken. In 2008, the wages of workers in mainland
China were 13.58 Yuan per hour, while the wages of American workers were 498.59 Yuan
per hour, nearly 36 times the wages of workers in mainland China, indicating the gap
between China and labor costs in the states United Nations. One reason is that China has a
large population and unlimited supply of labor. The second reason is that the Chinese
Workers Union and the Workers Union of capitalist countries have a different nature.
According to expert estimates, the advantage of working in China will last for 10 to 20 years.
High labor costs for manufacturing in the United States have reduced profit space. At the
same time, environmental protection will make United States workers slow down, causing
production in the United States very bad effect. At the same time, the United States industry
began early, investment in R & D is higher.

Demand Conditions:

Refer to the nature and size of customers of products in the domestic market. Strong
demand conditions in the country of origin convince local organizations to continuously
improve the product. If the demand for the product is more in the domestic market, it can
affect the demand of customers in the foreign market.

Comparison of demand between Chinese and Americans in the industry Due to the
imbalance of China's regional economic development, there are a large number of low-
income consumer groups in three or two first-tier cities in mainland China, which occupy
most of the sales market. Therefore, the price is the main factor in the eyes of the consumer
in the Chinese market given the decline in customs revenues. It is not difficult that in 2007
he had more than 70% of respondents who thought that when the price was the main factor
to decide to buy anything. After 2008, the percentage rose to 80%. Compared to the past
few years, in recent years, consumers will be purchasing quality, fuel consumption and
appearance as a reference factor, but price is still the most important factor for consumers.
According to survey results published in the American Journal of Consumer Reports, the
main reference factors for most American consumers consider purchasing fuel consumption.
Among those surveyed, 27% said the value of the purchase of fuel consumption, followed by
25% of the value of the value mentioned in the purchase, in addition to 14% and 12% of
respondents evaluate the price performance and safety. Among this, we can conclude that
America has an advantage in technical as well as in demand when considering customs
revenue.

It can be said fairly, in factor conditions, China has the advantage because it has low labor
cost compared with the United States. On the other hand, the United States has the
advantage in the demand conditions, the Chinese consumers are only concerned about the
price, yet, the American consumers are concerned about fuel consumption, safety, and
performance, etc. However, the government can formulate relevant policies and regulations
to promote the adjustment of industrial structure and achieve strong alliances.

Question 2

Localization in global markets

Localization is the process of modifying content (or product) to make it usable in a new
language. This often involves translating content from the source language into the language
used in the locale. For example, if you sell in the US market and want to expand in Germany,
you may need to translate your content into German. However, localization involves more
than just translation. For example, USA and German currencies vary, so you may need to
change signals from the USD to the Euro. The information can be translated without
translation - such as changing examples, currency, geographically defined information and
possibly color schemes.
Strategic Alliance or Acquisition

An alliance is an approach in which two or more companies agree to pool their resources
together to form a common market force. Unlike consolidation, the alliance does not include
the emergence of a new common entity. Each Alliance participant retains its individual entity
but chooses competition against competitors as a unified workforce. The joint venture is a
common form of alliance. Recently, the world's largest retailer Wal-Mart has entered into a
joint venture with India's Bharti Enterprises to gain a prominent position in the booming
Indian retail market. The move was the only way Wal-Mart could enter the Indian market,
where regulatory restrictions prohibit foreign retail chains wholly owned by the Indian
market. As such, this joint venture was a strategy to enter the market for Wal-Mart.
Acquisitions, on the other hand, refer to operations in which a company purchases the other
company. In such a case, the purchasing company absorbs the company purchased in the
current company. Acquisitions can be carried out either to eliminate competition by
absorbing the competing company or to expand the portfolio of companies by retaining the
acquired company as an independent entity under the overall management of the company.

Take advantage of local strengths

In many countries, large commercial centers or commercial centers have not yet emerged,
but there is a strong network of small shops or small shops that are an essential part of their
lives. There is no marketing strategy that can ignore the power of these sales networks.
Amazon markets its products online in Japan but is delivered through local stores. The
retailer has the ability to place point-of-purchase posters and hangers, and advisers to
regular customers to select the best products available.

Change technology

Investment in new technologies will continue to be a focus of attention in the near future. In
the "client era", enterprises are under pressure to change the digital experience not only to
their customers but also to their employees or other entities that interact with them. For
both business and IT leaders, it is exciting to work with the latest technologies: mobile
devices, smart agents / robots, virtual reality, enhanced reality, business intelligence. It is up
to IT leaders to know their market (business, customers and competitors) to provide the
right technology for the enterprise to deliver value-added innovation. Close work and
technology are necessary to ensure full alignment to allow the organization to lead the
market.