ACCA Strategic Professional · Strategic Business Leader · Environmental issues
A consultant analysing the Lumera wine region observes dense local networks of grape growers, bottle makers, wine-tourism operators and specialist trade journals, all sharing knowledge and supporting leading producers. Which Diamond determinant does this represent, and what is its main benefit?
This is related and supporting industries. Porter argues that clusters of competitive suppliers and linked industries provide efficient inputs, shared knowledge and faster innovation, which lifts the whole region's competitiveness. It does not describe customer demand, inherited resources or the removal of rivalry.
- ADemand conditions; it ensures customers are sophisticated
- BRelated and supporting industries; clustering gives efficient inputs, shared learning and faster innovationCorrect
- CFactor conditions; it provides inherited natural resources
- DFirm strategy, structure and rivalry; it eliminates competition among producers
Explanation
Internationally competitive supplier and related industries, often geographically clustered, give firms cost-effective inputs and close working relationships that speed innovation. Rivalry is not eliminated, and the scenario concerns linked industries rather than customers or inherited resources.
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