Which model explains the competitive advantage of certain industries in different nations?

The Diamond Model, developed by Michael Porter, effectively explains why certain industries within particular nations achieve competitive advantages over others. This model identifies four key factors that contribute to this phenomenon: factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry.

Factor conditions refer to the nation's resources, such as skilled labor, infrastructure, and natural resources, which can enhance a country's industry competitiveness. Demand conditions highlight the nature and size of the home market's demand for products, which can drive innovation and quality. Related and supporting industries encompass the presence of suppliers and related businesses that can strengthen the industry. Lastly, firm strategy, structure, and rivalry focus on how companies are created, organized, and managed, as well as the nature of domestic competition, which can foster an environment for innovation and advancement.

This comprehensive framework allows for the understanding of how national characteristics, alongside industry conditions, interact to foster success in global markets, making the Diamond Model particularly relevant in discussing competitive advantages among industries in different countries.

In contrast, Resource Mobility primarily pertains to how resources can be relocated across different sectors, Supply Chain Theory focuses on the logistics and operations involved in the supply chain process, and Porter's Five Forces model assesses industry competitiveness through market forces but