National Diamond

AAA

DEFINITION of 'National Diamond'

A theory of competitive advantage developed by HarvardBusinessSchool professor Michael E. Porter that is represented visually using a diamond-shaped graphic. The graphic can be used to show the factors that make up an industrialized country's competitive advantage in the global marketplace or the factors that make up a company's competitive advantage within a single country.

INVESTOPEDIA EXPLAINS 'National Diamond'

Porter, an expert on economic competitiveness, divides the factors of competitive advantage into four categories, placing one at each point of the diamond. The four categories are firm strategy, structure and rivalry; factor conditions; related and supporting industries; and demand conditions. His model also recognizes the impact of the institutional environment on competitiveness.



RELATED TERMS
  1. Absolute Advantage

    The ability of a country, individual, company or region to produce ...
  2. Knowledge Capital

    An intangible asset that comprises the information and skills ...
  3. Bertil Ohlin

    A Swedish economist who received the 1977 Nobel Memorial Prize ...
  4. David Ricardo

    A classical economist known for his Iron Law of Wages, labor ...
  5. Eclectic Paradigm

    A theory that provides a three-tiered framework for a company ...
  6. Comparative Advantage

    The ability of a firm or individual to produce goods and/or services ...
Related Articles
  1. Competitive Advantage Counts
    Active Trading

    Competitive Advantage Counts

  2. Public Relations: Offering Businesses ...
    Entrepreneurship

    Public Relations: Offering Businesses ...

  3. What is comparative advantage?
    Investing

    What is comparative advantage?

  4. How Influential Economists Changed Our ...
    Fundamental Analysis

    How Influential Economists Changed Our ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center