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Hello
I have some questions from Porters Diamond. I came across 2 questions which are as follows:1. H is a call centre based in country J. H has a well established list of clients, many from overseas, who see H as providing an excellent service at a reasonable cost. One of the principal attractions of H for its overseas clients is the fact that all of its employees are fluent in English. This comes as a result of the education system in country J; learning english is an important part of the curriculum for all students aged 8-16. There are many callcentres in country J, similar to H, who also have international customers. The importance given to learning english is an example of which one factor from Porter’s Diamond Model?
The answer given to this question is Strategy, Structure and Rivalry. Could you please explain the reasoning behind the same?
The 2nd question is as follows:
VGN is a mobile telecommunications company based in country E. It is considering expanding into country F, and has decided to use Porter’s Diamond Model to assess whether country F is suitable. The Government of country F is keen to support inward investment and is prepared to offer grants to foreign businesses that employ locally. Which factor of the Porter’s Diamond Model does this relate to?
The answer given is Strategy, Structure and Rivalry. Could you please explain the reasoning behind the same?
Thanks.
Q1 I would have said that this was an advanced factor condition ie education. The ability to speak English is a result of the education system (and perhaps outward-looking culture) and this is a ‘raw material’ for the success of call centres.
Q2 We have no information about factor conditions, home demand conditions, or supporting industries. Government support for inward investment will help the company become established in F. I suppose that kind-off comes under strategy, structure and rivalry.
I am always unhappy when questions try to use Porter’s Diamond to guide expansion. The diamond was originally used to try to explain why, historically, a country was good at certain activities. You don’t need Porter’s Diamond to see that if a government is throwing money at you that expansion there might be more worthwhile than otherwise.
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