ACCA Strategic Professional · Strategic Business Leader · Environmental issues
Norvik, a country with no natural coal or iron ore, has become a leading exporter of precision machine tools. Its success is attributed to highly skilled engineers produced by specialised technical universities and apprenticeships. Under Porter's Diamond, which determinant of national competitive advantage does this most directly illustrate?
The scenario illustrates factor conditions, specifically created factors. Porter argues that advanced, specialised factors such as skilled engineers from technical universities and apprenticeships matter more to national advantage than inherited resources like coal or ore, which Norvik lacks.
- AFactor conditions, in the form of created (advanced and specialised) factorsCorrect
- BDemand conditions, in the form of sophisticated home customers
- CRelated and supporting industries, in the form of local suppliers
- DFirm strategy, structure and rivalry, in the form of intense domestic competition
Explanation
Skilled labour built through specialised education is a created factor, which Porter considers more important than inherited factors such as natural resources. The scenario says nothing about customers, suppliers or rivalry, so the other determinants are not the focus.
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