Porter’s Diamond Model to Hong Kong’s Competitiveness with Case Study of Two Firms

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Plymouth University

Bachelor of Science (Hons)

Business Management

STO300HK GLOBAL ENTERPRISE

Porter’s Diamond Model to Hong Kong’s Competitiveness with Case Study of Two Firms

Student Name : Yip Hoi Lun (Part Time)

Plymouth University Student Number: 10591756

HKU SPACE Student Number: 20037942

Date of submission :  06/26/2017

(Word Count: 2512)

1.Introduction

“When it comes to Quality, Hong Kong is the best place (Cheung, 2017)!” Hong Kong has been successfully ranked 1st in the world for competitiveness in 2017, out of 63 economies (Worldcompetitiveness.imd.org, 2017). Li (2013) interprets that there are numerous vital determinants contributing to a nation’s competitiveness, such as: a nation’s political system, management style, planning and development, distinctive resources, qualifying and other amplifying drivers. Competitiveness is the ability of a nation to grow and becomes stronger. What makes Hong Kong an international destination to Foreign Direct Investment (FDI)? In this paper, Porter’s Diamond Model will be applied to evaluate Hong Kong’s attractiveness. ONYX Hospitality Group (ONXY) and Miscellaneous Goods Safety Laboratory (MGSL) will be used as an example to appraise the appropriateness of the model applied to Hong Kong.

2.Porter’s Diamond Model 

Porter’s Diamond is a model to evaluate and examine the competitive advantage of nations. It is a jointly strengthening system comprising of four broad determinants: (1) Firm Strategy, Structure, Rivalry, (2) Factor Conditions, (3) Demand Conditions and (4) Related and Supporting Industries. The four crucial determinants are positively correlated and influenced each other when there is a change in one of them (Porter, 1990). Chance and Government are the two supplemental variables which can alter the competitiveness of nations obliquely (Porter, 1990).

2.1.Firm Strategy, Structure and Rivalry

It refers to the strategies on firms’ establishment, organization, management and its domestic rivalry’s characteristic as well. An organization can attain competitive advantage in cost and distinction on the basis of these strategies.

2.2.Factor Conditions

Factor Conditions refer to the factors of production of the nation and it can be divided into two key categories, which are (1) generalized factors (E.g. capital, geographic location, and culture, climate, natural and energy resources) and (2) specialized factors (E.g. education, skilled personnel, professional knowledge, telecommunication, technology and infrastructure development).