STRATEGY AND NATIONAL DEVELOPMENT

NATIONAL DEVELOPMENT

– PROGRESS AND GROWTH, MATURITY OR SIMPLY IMPROVEMENT OF A NATION

– THE SUCCESS OF EVERY COUNTRY IS DEPENDENT ON A CONVERGENCE OF 2 IMPORTANT
BASIC COMPONENTS: STRUCTURE AND STRATEGY

STRUCTURE – OPERATIONAL FRAMEWORK THAT SERVES AS BASIS FOR NATIONAL GROWTH AND
DEVELOPMENT

1. POLITICAL STRUCTURE – IF A NATION IS DEMOCRATIC OR AUTOCRACY OR COMMUNISM

2. ECONOMIC STRUCTURE – HOW BUSINESS IS CONDUCTED IN A NATION
3. INSTITUTIONAL STRUCTURE- REFLECTED IN COUNTRY’S BANKING SYSTEM, JUSTICE SYSTEM,
MILITARY POWERS AND RULE OF LAW.

STRATEGY

– FOR DEVELOPMENT ON A NATIONAL SCALE INCLUDES COUNTRY’S POLICIES (MACRO AND

MICRO), RESOURCES AND GOVERNMENT
- GOVERNMENT SET THE GOALS AND TO ACHIEVE THIS, POLICIES HAVE TO BE
FORMULATED AND ENFORCED TO SET GROUND RULES FOR THE PEOPLE TO FOLLOW AND
RESOURCES WILL BE FAIRLY DISTRIBUTED

MACRO POLICIES

1. FISCAL POLICIES – BALANCED BUDGET, SURPLUS OR DEFICIT

2. MONETARY POLICY – SET BY THE COUNTRY’S CENTRAL BANK TO MAKE POSSIBLE THE
GROWTH OF THE SUPPLY OF MONEY AT A GIVEN RATE
3. POLICY ON EXCHANGE RATE – APPRECIATING OR DEPRECIATING THE CURRENCY EXCHANGE
RATE
4. INCOME POLICY – CORRELATION OF WAGES AND PRICES; AS PRICE INCREASE, WAGES
DEMANDED ALSO INCREASES; IF WAGES INCREASE, PRICES OF GOODS GENERALLY INCREASE

MICRO POLICIES

1. TRADE POLICY – INVOLVES THE USE OF TARIFFS, QUOTAS, AND OTHER TRADE CONTRACTS
THAT MAY CARRY CERTAIN LIMITATIONS AND RESTRICTIONS
2. FOREIGN DIRECT INVESTMENT – ARE GIVEN ATTRACTIVE BUSINESS PACKAGES AND
FINANCIAL INCENTIVES TO ENTICE THEM TO ENGAGE IN BUSINESS ACTIVITIES,
INFRASTRUCTURE ACTIVITIES, AND OTHER NATIONAL UNDERTAKINGS
3. PRIVATIZATION OR NATIONALIZATION
– PRIVATIZATION IS WHEN GOVERNMENT-OWNED CORPORATIONS END UP WITH HUGE
UNPAID LOANS, MONEY SHORTAGE, OR WORST THEY GO BANKRUPT, THEY SELL TO
INDIVIDUALS THE COMPANY OTHER THAN THE GOVERNMENT
– NATIONALIZATION IS WHEN GOVERNMENT MAY DECIDE TO CONFISCATE, BUY, OR TAKE
OVER AN ENTERPRISE AND MANAGE IT TO CONTROL PRICE, AND EQUITY AND AVOID
SHORTAGE.
4. ECONOMIC POLICIES – PROVIDE LIVELIHOOD, EDUCATION, WELFARE, AND QUALITY OF LIFE
FOR ITS PEOPLE; ENTREPRENEURS ARE SUPPORTED
 5. COMPETITION POLICY – QUALITY EDUCATION (LEVEL OF KNOWLEDGE OF WORKERS),
SEAFARING AND TOURISM SKILLS, SPEAKING OF GLOBAL LANGUAGES
6. SUBSIDY POLICY – GOVERNMENT SHOULDERS PART OF THE PRICE OF A COMMODITY TO
MAKE IT AFFORDABLE

RESOURCES

1. NATURAL RESOURCES – MINERALS, ENERGY FUELS, AQUATIC LIFE AND FORESTLANDS

2. HUMAN RESOURCES – POPULATION WITH ADEQUATE IF NOT BEST EDUCATION AND ARE
HIGHLY SKILLED AND HEALTHY
3. TECHNOLOGY – R&D, ADVANCES IN SCIENCE, COMMUNICATION, IT, MANUFACTURING AND
MEDICINE
4. CAPITAL – IF INVESTED WISELY, CAN GENERATE MORE EMPLOYMENT OF GOODS, SERVICES
AND WEALTH; THUS, THERE IS A CONSTANT NEED TO USE RECOURCES EFFICIENTLY.

STRATEGY FRAMEWORK FOR NATIONAL GROWTH

1. IMITATION – COPYING PRODUCTS AND SERVICES OF OTHER NATIONS

2. DEVELOPMENT – PRODUCTS ARE SLOWLY REFINED AND ENHANCED
3. ENHANCEMENT – PRODUCTS OR SERVICES ARE ENHANCED
4. INNOVATION – INVENTIONS ARE UNDERTAKEN THROUGH QUALITY RESEARCH OR PRODUCT
AND SERVICE DEVELOPMENT

MICHAEL PORTER’S DIAMOND (DIAMOND MODEL): THEORY OF COMPETITIVE ADVANTAGE OF

NATIONS

– EXPLAINS 4 DECIDING FACTORS/CONDITIONS THAT CAN DRIVE COMPETITIVE

ADVANTAGE FOR ONE ECONOMY OVER ANOTHER

1. FACTOR CONDITIONS – MOST IMPORTANT ONE; THOSE ELEMENTS THAT A COUNTRY’S

ECONOMY CAN CREATE FOR ITSELF SUCH AS LARGE POOL OF SKILLED LABOR,
TECHNOLOGICAL INNOVATION, INFRASTRUCTURE AND CAPITAL.
2. DEMAND CONDITIONS – SIZE AND NATURE OF CUSTOMER BASE FOR PRODUCTS, WHICH
ALSO DRIVES INNOVATION AND PRODUCT IMPROVEMENT; WHEN CUSTOMERS ARE
DEMANDING, FIRMS ARE FACED WITH PRESSURES TO CONSTANTLY IMPROVE THEIR
COMPETITIVENESS THROUGH INNOVATION
3. FIRM STRATEGY, STRUCTURE AND RIVALRY – COMPETITION LEADS TO BUSINESSES FINDING
WAYS TO INCREASE PRODUCTION AND DEVELOPMENT OF TECHNOLOGICAL INNOVATIONS
4. RELATED SUPPORTING INDUSTRIES - UPSTREAM AND DOWNSTREAM INDUSTRIES THAT
FACILITATE INNOVATION THROUGH EXCHANGING IDEAS; CORRESPONDS TO SUPPLIERS AND
CUSTOMERS REPRESENTING THREATS OR OPPORTUNITIES