Porter's Diamond Essay

806 words - 4 pages

After analysis of Brazil’s national competitive advantage using Porter’s Theory of Competitive Advantage, which focuses on four attributes of a nation that influence the environment where firms compete, it has been determined that although Brazil has grown exponentially, it is not a “competitive” society yet. Porter’s diamond focuses on a nation’s factor endowments, or the amount of resources a nation possesses to utilize towards production; their demand conditions, or the demand for their goods or services; their relating and supporting industries, because having internationally competitive suppliers and locally related industries can create competitive costs; and their firm strategy, ...view middle of the document...

manpowergroup.com/wps/wcm/connect/587d2b45-c47a-4647-a7c1-e7a74f68fb85/2013_Talent_Shortage_Survey_Results_US_high+res.pdf?MOD=AJPERES). The survey indicates that the skilled labor shortage problems are most serious in Japan and Brazil, an 11% increase since 2011 (). This increasing demand for skilled employees has resulted in outsourcing labor to countries like China thus, decreasing Brazil’s competitive advantage.

Brazil’s competitive advantage is increased by their technological infrastructure. Their information and technology is highly ranked, which helps promote inflow of FDI, but certain aspects like their Internet and mobile phones need vast development and improvement. Furthermore, their lack of investments in physical infrastructure has potential foreign investors pondering if Brazil is worth funding if they do not even bother investing in themselves.

The nation’s demand conditions, however, help increase their competitive advantage. The higher the demand in local markets, the more beneficial it will be for Brazil in creating advantage. Those that can survive and thrive in competitive local markets, usually can in global markets as well. During global economic deceleration, Brazil was able to survive better than others due to heavy private consumption. Domestic consumption, following the lead of private consumption, has increased as the middle class size increases. The government has also tried to encourage consumption by decreasing interest rates. Now, with more access to information, Brazilians are becoming more informed and demanding. This leads to increasing pressures, which will help create innovative, and high quality products that will satisfy their needs.

Brazil’s amount of...

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