At a time when global economies are suffering due to the various crises that have arisen, either after the COVID-19 pandemic or as a result of the war in Ukraine, business strategies must be well developed for the economy to prosper. Strategy Diamond suggests that every country can create new factor advantages for them, such as skilled labor or a strong technology industry.
🔝 Top Strategy Diamond Examples
- International Marketing Plan for SABIC Innovative Market: Entry into the Australian Market
- Michael Porter’s Diamond Model
📍 What Is Strategy Diamond?
Strategy Diamond or Porter’s Diamond, also known as the Porter’s Diamond Theory of National Advantage, was invented by Michael E. Porter, a famous Harvard professor. As its name suggests, the model aims to analyze competitive advantages of some nations or groups over others.
When Is The Diamond Strategy Useful?
This model is not limited to countries’ economies. Instead, it was developed so that it can be integrated into businesses as a form of strategic management.
Therefore, the Diamond Strategy is useful when it comes to organizing a company by taking into account the most important questions that you will have to answer when establishing the framework.
What Is Porter Diamond Used For?
The Porter Diamond Model is used to understand the competitive advantages and disadvantages of a country or organization in any field and to understand the suitable measures that can be taken to improve its performance.
How Is a Strategy Diamond Different from a SWOT?
Although both the Strategy Diamond and SWOT are used as analysis tools to make strategic decisions, there is still a key difference.
The Strategy Diamond is used to analyze the competitive environment within an industry, while a SWOT analysis is used to look more closely at the internal potential of a company.
💎 The 5 Elements of Porter Diamond Model
Each of the following 5 elements is essential when it comes to the management model under discussion. For these to be better explained, we will use strategy diamond examples for companies such as Ikea and Apple.
|Arenas||When it comes to the diamond strategy, the first question an organization must ask itself is “Where will be active?”. The company must delimitate a certain market, as in the next strategy diamond examples. |
When it comes to the Ikea strategy diamond, the arena is the young people to whom they sell inexpensive furniture. While in the strategy diamond for Apple, the arena is the young people to whom they sell expensive electronics.
|Vehicles||The vehicles refer to how the company is going to reach the delimited market called an arena. |
In the Ikea strategy diamond example, the vehicle is the wholly owned stores, while in the strategy diamond for Apple are the owned stores, as well as other electronics stores.
|Differentiators||The differentiators refer to the elements that make a company differ from its competitors. In the case of Ikea, the differentiators are low price, reliable quality, and in-house design, while at Apple, it is more about social status.|
|Staging||This element is about the steps the company has to take to achieve its goals. When it comes to Ikea, the staging is an early beachhead in each country, expanding later.|
|Economic logic||Every company and organization is about profit, and this last element refers to competing on a low-cost or high-cost basis. At Ikea, it is clear to say that the company is on a low-cost basis, while Apple is at the other end.|
Other companies that might be analyzed using the Diamond strategy are:
If you want to understand the way it works and the usefulness of Porter’s model, check the diamond strategy examples essays we’ve on this page.