National Competitiveness Analysis

Porters Diamond & IMD WCY Rankings Guidance : Prof. Jiban K. Mukhopadhyay

Group B5 Pradeep Paranjothi Shamik Joshi Soumya Tapadar Shebin John Samuel Vishal P Jain

PGPM811_61 PGPM811_69 PGPM811_74 PGPM811_92 PGPM811_103

Agenda
Need for competitive analysis

Introduction
The Diamond Model IMD World Competitiveness Ranking

Business Environment
Strategic Planning for global company is complex Complexity is caused by global business environment

Dynamic

Numerous Forces

Turbulent

Environment Analysis
If environment is complex and turbulent, what is the merit in planning?
Modify Environment Anticipate Change Foster Flexibility

Need for Planning?

STEP

PESTEL

Porters Diamond

Where does India stand in the global competitive landscape?

Factors of production. Sole determinants of a nations position in global competition?

What is the role of Government?

Introduction
Michael Porter, developed the Diamond Model Published in 1990 in the book The Competitive Advantage of Nations Aids in understanding the position of a nation in global competition

Diamond Model
Government

Strategy, Structure, Rivalry

Factor Conditions

Demand Conditions

Related& Supporting Industries

Chance

Factor Conditions
Land, labour, capital, natural resources & infrastructure

Key or Specialized Factors

Skilled labor, Capital and Infrastructure Created and not inherited Needs heavy, sustained investment Leads to competitive advantage

Non-key or General

Unskilled labor, Raw material Doesnt lead to competitive advantage

Porter argues scarcity of factors serve many a times as a boon as it leads to innovation

Demand Conditions

Competitiveness

Quality consciousness Value recognition

Sophisticated Domestic Market

Efficiency Economical

Easy to export Ideal product

Superior Product

Related & Supporting Industries

Supplier

Firm A

Firm B Firm

Buyer

Strategy, Structure & Rivalry

Context of operation Management Style Individual Career Choices

Capital Markets

Innovation

Technological Rivalry

Organizational Hierarchy Risk Appetite Commitment to Goals

Domestic Rivalry

Role of Government
subsidies
education policies regulation or deregulation of capital markets local product standards and regulations purchase of goods and service

tax laws
antitrust regulation

Role of Chance
Inventions Significant shifts in world financial markets or exchange rates Discontinuities in input costs such as oil shocks Major technological discontinuities Wars Political decisions by foreign governments

Chance events have high level of inherent unpredictability

IMD World Competitiveness

IMD - Non profit business school, Switzerland World Competitiveness Centre(WCC) - Research centre pioneer in the field of competitiveness of nations and enterprises since 1989

Ranks and analyses the ability of nations to create and maintain an environment in which enterprises can compete Competitiveness - potential of different countries for sustained economic prosperity using economic & human resources

Ranking Criterion
Economic Performance Govt. Efficiency

Infrastructure

Business Efficiency

Factors Hard Data 2/3 weightage(E.g. GDP) Soft Data 1/3 weightage (E.g. Availability of Competent Managers) Consolidation of factor wise scores Overall score(Out of 100)

How USA Stack Up

Basic Facts Population (million) Land Area (sq. km, 000) GDP ($ billion) GDP (PPP) per capita ($) Real GDP Growth (%) Value 311.95 9,831.5 15,094 47572 1.7

Economic Performance Government Efficiency

22 11
1

Consumer price inflation (%) Unemployment rate (%)

Labor force (million) Current account balance (%)

3.2 8.95
153.62 -3.14

Business Efficiency Infrastructure

Overall Competitiveness

How India Stack Up

Basic Facts Population (million) Land Area (sq. km, 000) GDP ($ billion) GDP (PPP) per capita ($) Real GDP Growth (%) Value 1210.19 3287.3 1756.8 3705 6.9

Economic Performance Government Efficiency Business Efficiency

21

42 24
53

Consumer price inflation (%)

Unemployment rate (%) Labor force (million) Current account balance (%)

8.5
9.8 487.6 -3.56

Infrastructure

Overall Competitiveness

35

Surveys
One-third of the 329 ranking criteria come from an exclusive IMD survey of more than 4,200 international executives Attitude Toward Globalization Need for Economic and Social Reforms

Country Ireland India USA France

Rank 1 15 32 59

Country Ireland India

Rank 1 22

USA
France

40
59

Thank You