Using Porter’s Diamond Model to Assess the Competitiveness of Taiwan’s Solar Photovoltaic Industry

Pei-Hsuan Tsai,Chih-Jou Chen,Ho-Chin Yang

doi:10.1177/2158244020988286

Abstract

In this study, we use six dimensions (i.e., firm strategy; government, structure, and rivalry; demand conditions; chance; factor conditions; and related/supporting industries) based on Porter’s diamond model to identify critical development indicators to enhance the competitiveness of Taiwan’s solar photovoltaic industry. Our proposed industry evaluation model uses the decision-making trial and evaluation laboratory (DEMATEL) technique to establish an influential relationship between indicators, the DEMATEL-based analytic network process to obtain influential weights, and the modified VIšekriterijumsko Kompromisno Rangiranje (VIKOR) method to assess industry development performance gaps. Through this analysis, current industry demands can be clarified, and operations of governments and photovoltaic firms can be improved by limiting developmental gaps and formulating robust policies and strategies. Furthermore, the influential network relationship map and influential weights can help explain the complex assessment system and suggest priorities for industry improvement. The results demonstrate that the six dimensions should be upgraded in the following order of priority: firm strategy; government, structure, and rivalry; demand conditions; chance; factor conditions; and related/supporting industries. We also discuss the implications for photovoltaic firm management.

Highlights

Nation building is often dependent on strong competition among national industries
Using the multiple-attribute decision-making (MADM) method, the average questionnaire included 10 to 15 experts (Jeng & Huang, 2015; Tsai, 2020; Tsai & Lin, 2016). Owing to this gap in research, our study focused on the solar photovoltaic industry in Taiwan and asked the following four research questions: (a) What are the factors that influence the solar photovoltaic industry’s development? (b) Could an evaluation model that defines the networks of influence for these factors be constructed? (c) How would the factor weights be developed for such a model? (d) How should policy be improved based on the findings?
To answer these research questions, first, we develop a hybrid MADM model combining the decision-making trial and evaluation laboratory (DEMATEL) technique to construct an influential network relationship map (INRM)

Summary

Introduction

Nation building is often dependent on strong competition among national industries. In January 2016, the President of Taiwan Tsai Ing-Wen proposed an “Innovation, Research and Development Plan for Five Major Industries.” This policy became the foundation for a new economic development model centered on “integration, innovation, employment, and allocation” with ambitious goals of increasing corporate profitability, labor income, and new employment opportunities (Fang et al, 2018; Şengül et al, 2015). In January 2016, the President of Taiwan Tsai Ing-Wen proposed an “Innovation, Research and Development Plan for Five Major Industries.” This policy became the foundation for a new economic development model centered on “integration, innovation, employment, and allocation” with ambitious goals of increasing corporate profitability, labor income, and new employment opportunities (Fang et al, 2018; Şengül et al, 2015). Porter’s (1990) theoretical framework can even be useful for examining the role and importance of enterprises in Taiwan’s market and as a tool for a comparative analysis of Taiwan’s international competitive advantages We use this model to construct an analytical framework that helps in the assessment of the competitiveness of the solar photovoltaic industry in Taiwan. This model comprises four fundamental elements: factor conditions; demand conditions; firm strategy, structure, and rivalry; and related and supporting industries, plus two major variables—government and chance (Figure 1)

Objectives

Methods

Results

Conclusion