1. What are the main components of Porter’s Diamond model? 

2. What the Harley Davidson case is about? 

3. How did Harley Davidson take advantage of Porter’s four components’ model (Diamond Model)  to become a global company?    

The Competitive Advantage of Nations

Michael E. Porter

Determinants of National Advantage
Firm Strategy, Structure and Rivalry
Demand Condition
Factor Condition
Related and Supporting Industries

Factor Condition
Factor of Production: Labor, Land, Natural Resources, Capital and Infrastructure
Factor Endowment: Human Resources, Skills
Physical Resources: Quality, Cost, Abundance, and Accessibility of Natural Resources
Knowledge Resources: Scientific and Technical Knowledge
Capital Resources: Capital Available and Financing
Infrastructure: Quality of Infrastructure for Effective Competition
Basic and Advanced Factors:
Basic: Natural Resources
Advance: Educated Workforce and Modern Digital Communication
Factor Creation: Building of Educated Skilled Workforce and……

Demand Condition
Home Demand Condition: Home Demand and Perception of Buyers Needs
Segment and Distribution of Demand for particular Product and Varieties
Size of the Segment can be Small or Large in Domestic and International Market
Sophisticated and Demanding Customers for Innovative Products
Anticipatory Buyers Needs that Could be Used for Demand
Size of the Home Demand can Lead Toward Economies of Scale
Early Home Demand and the Rate of Growth
Early Saturation of the Domestic Market to Expand in the Global Market
Domestic Needs can Influence International Market and Needs

Related and Supporting Industries
Domestic Firms can Produce Innovative Inputs for Expanding in Global Market
Efficient Access to Most Cost Effective Inputs for Developing Domestic and Global Market
Preference Over a Reliable Domestic Supplier Compared to a Foreign One
Cultural Similarity and Proximity with Domestic Firms
International Success in One Industry can Lead to Demand for Complementary Products or Services

Firm Strategy, Structure and Rivalry
The Pattern of Rivalry at Home in Innovation and Innovative Products
Managerial Practices at Home in the Areas of Leaders Orientations, Managerial Skills and Initiatives
Skills in Understanding Different Cultures and Learning Languages, Firms International Outlook
The Company’s Goals in Terms of Motivation, Structure and Incentives
Attitude Toward Accumulation of Wealth by a Company, Quick or Slow
Sustained Commitment of a Company to Workforce, Product and Business
Domestic Rivalry at Home for the Creation of Competitive Advantage

The Role of Chance and Government
Chance is Out of the Control of Firms. Chance can Create Discontinuities Allowing Shift in Competitive Advantage
Chance Can Be Major Shift in Input Cost, Exchange Rate, Natural Disasters
Chance of Having a New Invention Can Help a Company Tremendously
Government can Influence the Other Four Components of the Porter Model
Government can Impose Tariff, Change Regulation in Capital Market
Government can Shape the Circumstances of the Related and Supporting Industries