Question

Question: Using Michael Porter's Diamond Model of National Advantage, perform a critical analysis of Narendra Modi's "Make in India" industrial policy. Is "Make in India" responsive to India's competitive advantages (and disadvantages)? Why or why not?

For your reference, here is information regarding what Porter's Diamond Model of National Advantage is:

The Diamond of National Advantage

Why are certain companies based in certain nations capable of consistent innovation? Why do they ruthlessly pursue improvements, seeking an ever more sophisticated source of competitive advantage? Why are they able to overcome the substantial barriers to change and innovation that so often accompany success?

The answer lies in four broad attributes of a nation, attributes that individually and as a system constitute the diamond of national advantage, the playing field that each nation establishes and operates for its industries. These attributes are.

1. Factor Conditions. The nation’s position in factors of production, such as skilled labor or infrastructure, necessary to compete in a given industry.

2. Demand Conditions. The nature of home-market demand for the industry’s product or service.

3. Related and Supporting Industries. The presence or absence in the nation of supplier industries and other related industries that are internationally competitive.

4. Firm Strategy, Structure, and Rivalry. The conditions in the nation governing how companies are created, organized, and managed, as well as the nature of domestic rivalry.

These determinants create the national environment in which companies are born and learn how to compete. Each point on the diamond—and the diamond as a system—affects essential ingredients for achieving international competitive success: the availability of resources and skills necessary for competitive advantage in an industry; the information that shapes the opportunities that companies perceive and the directions in which they deploy their resources and skills; the goals of the owners, managers, and individuals in companies; and most important, the pressures on companies to invest and innovate.

Question: Using Michael Porter's Diamond Model of National Advantage, perform a critical analysis of Narendra Modi's "Make in India" industrial policy. Is "Make in India" responsive to India's competitive advantages (and disadvantages)? Why or why not?

Answer 1

Narendra modi's "Make in India" analysis using porter's diamond model:

1) Firm strategy, structure and rivalry

a) The national context in which a company operates always decides it's strategy and structure. It also decides the creation and management of the company.

b) Domestic rivalry also plays a vital role in competitive advantages internationally because rivalry forces these companies to develop unique and sustainable strengths and capabilities.

c) In India also many government institutions are opened for skill development to support make in India.

d) More intense the rivalry will be, more unique products will be developed that will give more competitive advantage.

2) Factor condition

a) Factors we can include natural and created in a country.

b) Natural factors are like natural conditions, water and available natural resources and created factors are skilled human resources.

c) Created factors are very important and they should be recognized and upgraded timely.

d) Government is motivating people to go for self employment and many institutions are opening by government as well as by the private organization to train people.

e) Skilled labor could provide great competitive advantage and modi is working on this.

3) Demand conditions

a) Domestic demands are very important because they motivate companies to develop unique products with better quality.

b) More the local customers will be, more competition will take place and this will provoke the companies for betterment.

c) Modi's government is urging local public to go for products which are make in India, so these companies can serve domestic public as well as international markets in the form of export.

d) Local customers provide clear idea of buying needs that help the companies to develop the innovative products and this will also provide the international competitive advantage.

4) Related and supporting industries

a) Supporting industries also play a vital role for focal industries as they provide support in the form of ventures.

b) These joint ventures help the industries to add value to their product for the consumers.

c) More consumption leads to more demand creation and productivity thus resulting in better competitive advantage.

d) Supporting industries should be present and should support the products in demand.

5) Government

a) Government should play a role of catalyst and challenger.

b) Complete freedom is not good for industries some government control and support should be there.

c) Government cannot create a competitive atmosphere but companies can. Government can provoke them to do this by creating demands and factors.

d) Rules of government also play a vital role in business thus providing the better competitive advantage.

So according to this porter's diamond model, Modi's government is doing everything to motivate "make in India".