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Country K in Africa possesses an abundance of natural resources such as coal. Coal is selling very well in country K. There is high competition between companies exploring coal there. These companies are fighting for the market and also looking for cheaper ways to extract coal, and a drop in the coal price is therefore observed.
Which TWO factors within Porter’s diamond model would BEST describe the characteristics of country K that are likely to give competitive advantage to the coal retailing industry within the country?
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A. Relating and supportive industries
B. Demand conditions
C. Strategy, structure and rivalry
D. Competitive rivalry
E. Factor conditions
F. Barriers to entry
Where are these questions from? A book? Part of an assignment? Presumably answers are or will be available to you.
Sir, it’s part of practice.. I am confused with answer kit.. Book is taking Related and supporting Industries and factor conditions as correct answer.. But i think it should be Demand And Factor conditions. Please advise…
If you are confused by a question and answer, jt is important for,you to supply both so that I can explain the logic applied. Sometimes I disavree with the model answers.
Porter’s diamondmquestions are often puzzling, I find.
FIRST, D and F are not part of the diamond.
We are looking for competitive advantage. We all agree on factor conditions, ie the raw materials.
I agree with you: high demand will make entry to the market easier.
The question says very little abour related,and supporting industries, so I don’t know why the model answer went for that.
In addition, you could argue that factor conditions amd demand are the same for all coal mining businesses so that neither give competitive advantage!
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