Porter's Competitive Advantage Research Articles

Differentiation Strategy and the Performance of Medical Insurance Companies in Kenya

Against a backdrop of escalating global competition, health insurance firms grapple with the need to stand out amidst a saturated market. The study recognizes the imperative for organizations to adopt differentiation strategies, with a focus on product, personnel, distribution, and image differentiation. Acknowledging the current dearth of comprehensive research in the Kenyan context, the research problem centres on the critical need to investigate the extent to which differentiation strategies influence the performance of health insurance companies in the region. The general objective of the study was to investigate the effect of differentiation strategy on performance of Health Insurance Companies in Kenya. Drawing on established theories such as Porter's Competitive Advantage Model, Upper Echelons Theory, Resource-Based View, and Transaction Cost Economics, the study employs a multi-theoretical framework to provide a nuanced understanding of the complex relationships between differentiation strategies and organizational outcomes. Adopting the descriptive research design, the target population comprises 980 employees in the medical insurance firms in the top management and middle level management in Nairobi, drawn from the respective insurance firms’ Human Resources Departments. Employing a multi-stage sampling technique, the established sample size is 101 top and middle level management staff who were reached by stratified random sampling. A semi-structured questionnaire was the main data collection instrument and was distributed through a drop-and- pick- latter approach. Data was analyzed using both descriptive and inferential statistics. Descriptive statistics measures of mean and standard deviation was used, while for inferential statistics, regression equations were employed. The study established that product differentiation strategy, personnel differentiation strategy, product differentiation strategy and image differentiation strategy had a positive significant effect on performance of health insurance companies in Kenya. The study concludes that product differentiation is the key aspect distinguishing one company’s products or services from its competition. Personnel differentiation strategy gives an organization the ability to respond in time to the needs of their members through the skills and knowledge of employees. A differentiated distribution strategy allows insurance companies to expand their sale potential by getting their product in front of more potential customers. An effective image establishes the product's character and value proposition and a person responds differently to company and brand images. The study recommends that the insurance companies should consider opportunities for differentiation in all of its production areas: marketing, product management, engineering, sales, and customer support. Organizations looking to build personnel differentiation strategy will need to produce or design extremely unique or distinctive products or services that create increased value for the consumer. The insurance companies should devote resources to channel management preferably at least one dedicated manager whose sole responsibility is to manage those relationships and build the marketing programs to drive revenue through the channel. The insurance companies should identify their brand gaps, which are the discrepancies between their desired and actual brand performance.

Redefining Malaysia's printing landscape: insights from Porter's CAN Model

Malaysia's burgeoning printing industry, while showcasing potential, grapples with challenges that constrain its growth and global reach, underscoring the need for a deep and structured assessment. This pivotal study is designed to unpack the competitiveness of the Malaysian printing sector within the vast expanse of the global market, with a spotlight on the commercial printing segment. It revolves around the central inquiry: "Which critical factors mold the competitiveness of Malaysia's printing industry, and how can insights from Porter's Competitive Advantage of Nations (CAN) model illuminate them?" Anchored in the renowned Porter's CAN model, the research undertakes a multifaceted analysis of industry pillars, including intricate demand patterns, supply chain dynamics, prevailing competition, and the overarching influence of government directives. Data, meticulously sourced from 2015-2019 through national agencies and global institutions, forms the bedrock of this systemic examination. The study reveals that Malaysia stands fortified by assets like adept labor, contemporary infrastructure, and cost-effective energy provisions. Yet, it's not devoid of challenges, notably, the lag in embracing cuttingedge production tech and the absence of razor-sharp competitive strategies. However, the surge in both domestic and international demand sketches a promising trajectory. Beyond validating the robustness of the CAN model, the study weaves a tapestry of insights for industry stakeholders. It underscores the pivotal role of agile government interventions and the pressing mandate to integrate digital innovations. The findings beckon a targeted strategy to navigate and neutralize identified pitfalls, amplifying the industry's global resonance. While the study carves a panoramic landscape, its primary reliance on secondary datasets is its Achilles' heel. Still, it emerges as an invaluable compass for industry stakeholders, directing strategic investments and policy recalibrations to elevate the global stature of Malaysia's printing industry.

Effect of Leadership in Strategic Planning on Performance of Faith Based Health Care Institutions in Meru County, Kenya

The primary objective of this study was to investigate the impact of strategic planning drivers on the performance of faith-based healthcare institutions in Meru County, Kenya. There were four specific objectives: to assess the influence of leadership in strategic planning, environmental scanning, stakeholder involvement, and the strategic planning formulation process on the performance of faith-based healthcare institutions in Meru County, Kenya. The research drew upon the Strategic Fit Theory, Porter's Competitive Advantage Theory, and Institutional Theory. Adopting a descriptive research design, the study targeted 421 employees across 23 faith-based healthcare institutions in Meru County. Using Yamane's formula for categorical data, the study focused on a sample size of 205 respondents. Quantitative data was collected through questionnaires distributed to respondents using a drop-and-pick method, while qualitative data was gathered from hospital administrators using an interview guide. The study employed frequencies, means, and standard deviation to present descriptive results. For inferential statistics, correlation analysis, regression analysis, and analysis of variance were used. The study's results revealed a positive and significant correlation between leadership, environmental scanning, stakeholder involvement, the strategy formulation process, and the organizational performance of faith-based healthcare institutions in Meru County. Regression analysis indicated that strategic planning drivers accounted for 59.5% of the variance in organizational performance. The study found that stakeholder involvement did not exert a significant influence on the performance of faith-based healthcare institutions. As a recommendation, the study suggests that faith-based healthcare institutions should enhance their strategic planning by strengthening collaborations with stakeholders, improving resource mobilization, evaluating threats and opportunities, and involving employees in the strategic planning formulation process. Additionally, the study recommends further research to assess the impact of the internal organizational environment on the performance of faith-based healthcare institutions in other counties in Kenya. Policymakers in faith-based organizations are encouraged to support individual organizations in developing strategic management guidelines that promote regulation and control.

Global production aspirations and internationalization by state-owned enterprises: A Co-evolutionary view of state-driven industrialized economy

The study aims to explore whether internationalization by state-owned enterprises is a curse or blessing in the context of aspirant industrial economies, such as China. What do state-owned enterprises' global production aspirations, such as outward foreign direct investment, bring into their home country? To answer this question, this study proposes a unique, co-evolutionary perspective of the state-driven industrialized economy by leveraging insights from economic discoveries such as Adam Smith's wealth of nations, David Ricardo's comparative advantage, and Michael Porter's competitive advantage. This view suggests that an outward foreign investment strategy may likely provide state-owned enterprises with access to resources and advanced production technologies, enhance innovation capabilities, gain more competitive advantage, and achieve superior performance, thus leading to spillover effects on their home country's wealth, comparative advantage, and competitiveness. This study discusses China's grand policies, economic performance, and successful cross-border industrial acquisitions.

Government Intervention and the Improvement of Competitiveness of the National Coffee Industry: The Case of Indonesian Gayo Coffee

This article analyses the Indonesian government's intervention to increase the competitiveness of its national coffee industry, especially one of its speciality coffees known as Gayo coffee. It aims to describe the value of Gayo coffee competitiveness based on the level of production, export volume and income of coffee farmers. In doing so, this study used Michael Porter's competitive advantage analysis which is known as the diamond model concept. The findings show that the four indicators in the diamond model concept cannot be fulfilled to make Gayo coffee a product that has competitive advantages for the government intervention was not sufficient in improving the good climate of the Gayo coffee industry. Stakeholders' cooperation in the coffee industry is needed to improve or continue the government efforts so that the Indonesian coffee industry can be competitive with the ones from other countries.

Digital as the Future of Indonesia Economy Growth

Indonesia is a country that is currently in a developing country position. Indonesia was predicted to be one of the strongest economies in Asia, especially during the oil boom era where Indonesia has oil reserves that are driving economic growth. However, the presence of oil cannot be used for long-term investment and the consequences of the 1998 monetary crisis prevented Indonesia from reaching its potential. In the future the country's growth will be driven by technology. This research is applied research to use Porter's Competitive Advantage model for the State. The data used are secondary data from trusted institutions for which data is publicly available. The results of this study are that Indonesia has the opportunity to become a new economy power in the future as long as it can utilize the current momentum.

STUDY ON THE CHARACTERISTICS OF POTASSIUM SALT INTERNATIONAL TRADE BASED ON COMPLEX NETWORK

This paper studies the evolutionary characteristics of international trade of potassium salts. We construct a weighted and directed complex network model of potassium salt trade, analyze the scale and activity, trade relations, trade flow distribution and the importance of trading countries using UN Comtrade2000-2016 data. Results show that potassium salt trade is more dynamic, resource allocation is more convenient. Some countries have formed trade groups. The relationship between small and major countries is growing. The resource flows of countries with large degrees are conducive to balancing resource’s distribution. Besides Canada is a leading trade country, and the US, the Russian Federation, China and Brazil are trade-led countries. China, the Netherlands, the US, France and India are important hubs. Finally, using Porter's national competitive advantage theory, it proposes countermeasures for forming the international competitive advantage of potassium salt enterprises in different countries.

Uwarunkowania prawne i polityczne a konkurencyjność branży elektroenergetycznej OZE w Polsce i w Niemczech

The aim of this paper is to analyse how legal and political conditions in Poland and Germany affect the competitiveness of renewable energy (RES) production. The analysis also includes the most important competitive source of energy in both countries, namely coal. An attempt to assess the influence of governments on the RES sector by influencing carbon-based energy was also made. The framework of this analysis is expanded diamond of M. E. Porter's competitive advantage of nations, although its scope was limited to the governmental factor and its influence on the other components of the model. The analysis shows great importance of legal and political conditions for the competitiveness of RES in both countries, including enormous impact of hidden support for coal, and indicates disadvantages of the methods of RES subsidising.

Family firms, internationalization, and national competitiveness: Does family firm prevalence matter?

We revisit the question of family firms (FFs) and their capacity for internationalization, and link it to the literature on national competitiveness. We draw widely on the FF competitive advantage and internationalization literature to argue that FFs’ organizing preferences and capabilities will typically support exporting and that these same organizing preferences will mitigate against outward FDI, two dimensions of national competitiveness. Using the logic of aggregation, we hypothesize that family firm prevalence (FFP), measured at the country level, negatively moderates a series of country-level variables associated with country outward FDI, and positively moderates a series of variables associated with country exports.We develop a unique dataset on FFP across countries using a novel method in which we extract estimates from from both published and unpublished academic studies. We develop empirical tests that are rooted in Porter's Competitive Advantage of Nations (Porter, 1990), and its extensions in the Global Competitiveness Index (GCI). Our results provide consistent confirmation of the positive moderator effect of FFP on country export performance hypothesis, but contrary to expectation, higher FFP in a country has a null or positive effect on outward FDI at the country level, thus suggesting a more nuanced view of FF strengths and weaknesses. We conclude by discussing the implications of these results for both the competitiveness and the FF literatures.

Criação de valor: incorporando elementos da economia dos custos de transação na visão porteriana

Este ensaio teórico analisa o papel dos custos de transação ao longo da cadeia de valor tal como concebida na visão porteriana, objetivando propor um aparato conceitual que combine as visões da firma como um conjunto de atividades ligadas por elos e como um nexo de transações e custos que ocasionem perda de valor. Utilizando-se do levantamento bibliográfico que apresenta os conceitos da vantagem competitiva de Porter e da economia dos custos de transação, elaborou-se um framework que contempla a criação de valor pela firma em três dimensões: valor criado pelas atividades, custo das atividades e custo dos elos; identificou-se também que o custo dos elos é moderado pela matriz institucional, estruturas de governança, economias de escala e escopo da firma; sendo que a incorporação destes constructos se constitui como a contribuição deste ensaio. Conclui-se que, apesar de divergentes em suas orientações para a lucratividade, a visão porteriana e a dos custos de transação apresentam potencial para integração, pois a análise da criação de valor na firma torna-se incompleta ao utilizar-se de somente uma das abordagens.

Investigation the impact of outsourcing on competitive advantages' creation by considering Porter's model; Case study: Zamyad Company

Article history: Received October 17, 2011 Accepted 12 March 2012 Available online 16 March 2012 Competitive advantage is an important factor in boosting companies' success and is considered more emphatically in management and strategic marketing literature in recent years. There are many different ideas about effective factors in creation of competitive advantages. Also fast rate of change in business, is forcing CEOs to utilize some strategies, which have the best impact on current organizational circumstances and the future trend of investigation in organizational trades. Outsourcing is one of the best strategies, which are widely utilized by CEOs in different organizations. Many managers believe that outsourcing is the solitary way for preserving the balance of organization in 21 century. Based on Porter competitive advantage model, there are three strategies, which lead a company to reach competitive advantage. These strategies are cost leadership, differentiation strategy and segmentation strategy . In this article, we are investigating outsourcing effects on creation of competitive advantages through Porter model in an automotive factory in Iran. We design a questionnaire for gathering necessary information about the role of outsourcing in creation of different strategies as competitive advantages in managers' point of view. We analyze the questionnaires and implement a goodness of fit test to recognize the distribution of data and the statistical method. Preliminary results show that nonparametric statistic methods can be utilized for testing our hypothesis. We use a Wilcoxon test to consider the null hypothesis and a Friedman test to estimate the rank of means. Our findings verify an undeniable effect of outsourcing on creation of competitive advantage and the ranking list is presented. © 2012 Growing Science Ltd. All rights reserved.

A Comparative Assessment of the Information Technology Services Sector in India and China

The purpose of this paper is to assess the nature of competition in the information technology (IT) services sector between India and China. Using primary and secondary data sources, we compare and contrast the strengths and weaknesses of the IT services sector in the two countries along the main dimensions of Porter's competitive advantage model. The principal findings indicate that the IT services sectors in the two countries are distinctively different, have developed along different paths and are highly complementary to each other. China has a well-established hardware sector and its IT services sector focuses mostly on servicing its domestic market. India's IT services sector is predominantly export orientated with focus on the US and Western European markets. Contrary to popular beliefs, given the complementary characteristics of the IT services sectors in India and China, it is unlikely for the two countries to compete against each other in the near future and greater strategic co-operation between IT service providers in the two countries is a more likely outcome.

Determinants of the Competitive Advantage of Residential Tourism Destinations in Spain

This paper focuses on an analysis of the tourism competitiveness of residential destinations on the Spanish coast, applying Porter's competitive advantage theory. This analysis is conducted with a hypothesis test using a structural equation model based on Porter's competitive diamond. The paper shows that by analysing a range of variables, it is possible to develop attributes related to competitiveness which constitute Porter's diamond model, confirming that this theory is appropriate for explaining the tourism development processes in residential tourism destinations on the Spanish coast. The results show how the competitive difference between destinations in such a specific geographical area is based mainly on small details belonging to the advanced factors of the competitive advantage theory. Finally, there is cause for concern in the fact that the supporting and related sectors determinant has a negative influence on competitiveness.

Conditions for Hosting Mega-Sporting Events in Asia: Comparing Japan and India

This study examines the impact of mega-sporting events on business and economic growth by using Porter's competitive advantage diamond framework. Specifically, it comparatively analyses the differential impacts of mega-sporting events in two countries, viz. Japan and India — the main hosts, respectively, of the FIFA World Cup 2002 and the ICC Cricket World Cup 1996. The analysis led to the expectation that there are significant differences in the nature and direction of the impact such mega-sporting events have on the society and economy of these two nations. This qualitative analysis led to the formulation of a proposition anticipating differences in ex ante vs ex post impact between the two countries. The differential impacts of mega-sporting events on social and economic development, growth and infrastructure are explored. The study extends the comparison of these two nations and seeks to generalize the differences across developed vs emerging markets of Asia. Based on emerging markets literature, managerial implications are developed from the perspectives of the different ‘players’ in question in the respective markets.

Using Competitive Advantage Theory to Analyze IT Sectors in Developing Countries:A Software Industry Case Analysis

The purpose of this paper is to provide guidance for researchers and analysts on when, why, and how to apply Porter's competitive advantage theory to analysis of IT sectors in developing countries. To date, this theory has been rather poorly applied in such analysis, yet the question of how developing countries—as latecomers—can create competitive advantage in IT industries remains one of critical interest to policy makers, entrepreneurs, and international agencies. Understanding of IT sector growth is particularly important, in light of its significant potential contribution to economic development. From the five IT sectors—goods, software, infrastructure, services, and content— this paper focuses on software. Having provided a thorough explanation of competitive advantage theory, it applies this theory to the case of India's software industry, which it finds does have a competitive advantage, based on variables such as ever-increasing advanced skills, domestic rivalry, clustering, and government policy/vision. To assist researchers, the paper identifies emergent challenges to Porter's theory that can be resolved relatively easily but also some less tractable problems around the issues of government policy, processes of upgrading/innovation, and local/global linkages. All these require some identified amendments to Porter's original ideas. Nonetheless, Porter's theory is seen to be a valuable tool for development informatics/ICT4D research, applicable to a variety of IT sectors—not just software—and offering answers to questions about whether sectors are competitive, why they are or are not competitive, and what should be done to improve or sustain competitive advantage.

Competitive strategy and strategic agendas

Abstract Competitive strategy has not evolved very significantly since Michael Porter's Competitive Advantage in 1985 but the analysis of strategic agendas helps to develop our understanding. Strategic agendas shape the industry mind‐set and influence the impact of Porter's five competitive forces. This is manifest through the degree of psychological advantage which players in the industry have over each other. Strategic agendas are found at a variety of levels and deeper ones need to be surfaced. The way strategic agendas impact on competitive strategy appears to be a very fruitful area for future research.

Linking Entrepreneurship and Economic Growth

In the 1980s stagflation and high unemployment caused a renewed interest in supply side economics and in factors determining economic growth. Simultaneously, the 1980s and 1990s have seen a reevaluation of the role of small firms and a renewed attention for entrepreneurship. The goal of this survey is to synthesize disparate strands of literature to link entrepreneurship to economic growth. This will be done by investigating the relationship between entrepreneurship and economic growth using elements of various fields: historical views on entrepreneurship, macro-economic growth theory, industrial economics (Porter's competitive advantage of nations), evolutionary economics, history of economic growth (rise and fall of nations) and the management literature on large corporate organizations. Understanding the role of entrepreneurship in the process of economic growth requires the decomposition of the concept of entrepreneurship. A first part of our synthesis is to contribute to the understanding of the dimensions involved, while paying attention to the level of analysis (individual, firm and aggregate level). A second part is to gain insight in the causal links between these entrepreneurial dimensions and economic growth. A third part is to make suggestions for future empirical research into the relationship between (dimensions of) entrepreneurship and economic growth.

Transnational Economic Synergy and Business Networks: The Case of Two-way Investment Between Malaysia and Singapore

YEUNG H. W .-C. (1998) Transnational economic synergy and business networks: the case of two-way investment between Malaysia and Singapore, Reg. Studies 32, 687-706. This paper examines the argument that two-way investment flows, embedded in transnational business networks, constitute an important source of economic synergy between regional economies. Whereas these macro-economic flows of investment can be explained by Dunning's investment development cycle model and Porter's competitive advantage perspective, they are less useful in explaining the role of transnational business networks in constituting economic synergy between countries and regions. Based on secondary data published by respective authorities in Malaysia and Singapore, it is found that two-way investment between Malaysia and Singapore has long historical roots. When both economies develop over time, the structure of investment flows across the Straits begins to change in response to different levels of economic development and competitive advantage. Malaysia has been the most important geographical destination for Singapore's outward foreign direct investment (FDI). Similarly, Singapore has been an important geographical destination for outward FDI from Malaysia. In assessing the role of two-way investment in promoting economic synergy, this paper discusses how investment flows between Malaysia and Singapore can be embedded in business networks. Several case studies of business networks by leading transnational corporations from Malaysia and Singapore are provided. YEUNG H. W .-C. (1998) La synergie économique et les réseaux commerciaux: étude de cas de l'investissement bilatéral entre la Malaisie et la Singapour, Reg. Studies 32, 687-706. Cet article cherchè a aborder la thèse selon laquelle les flux d'investissement bilatéral, enchâssés dans des réseaux commerciaux transnationaux, représentent une source importante de synergie économique interrégionale. Alors que ces flux d'investissement macroéconomiques peuvent s'expliquer par le modèle de Dunning quant au cycle d'investissement et par le point de vue de Porter en ce qui concerne l'avantage compétitif, ils sont moins utiles pour expliquer le rôle des réseaux commerciaux transnationaux dans le développement d'une synergie économique internationale ou interrégionale. A partir des données secondaires publiées par les administrations respectives en Malaisie et en Singapour, il s'avère que l'investissement bilatéral entre la Malaise et la Singapour est bien enraciné. Au fur et à mesure que les économies se développent, la structure des flux d'investissement à travers le détroit évolue en fonction des niveaux du développement économique et de l'avantage comparatif différents. La Malaisie a été la destination géographique la plus importante pour l'investissement direct étranger en provenance de la Malaisie. Tout en évaluant le rôle de l'investissement bilatéral dans la promotion de la synergie économique, cet article discute la manière dont les flux d'investissement entre la Malaisie et la Singapour peuvent être enchâssés dans des réseaux commerciaux. On fournit plusieurs études de cas des réseaux commerciaux faites par les sociétés transnationales les plus importantes en Malaisie et en Singapour. YEUNG H. W .-C. (1998) Übernationale wirtschaftliche Synergie und Geschäftsnetzwerke: der Fall gegenseitiger Investitionen von Malaysia und Singapur, Reg. Studies 32, 687-706. Dieser Aufsatz untersucht das Argument, daß gegenseitige, in übernationale Geschäftsnetzwerke eingebettete Investitionsströme, eine wichtige Quelle wirtschaftlicher Synergie von regionalen Wirtschaften darstellen. Während diese makro-ökonomischen Investitionsströme durch Dunnings Modell des Investitionsentwicklungskreislaufs und Porters Perspektive des Wettbewerbsvorteils erklärt werden können, erweisen sie sich als weniger brauchbar für die Erläuterung der Rolle übernationaler Geschäftsnetzwerke bei der Konstituierung wirtschaftlicher Synergie von Ländern und Regionen. Auf der Grundlage untergeordneter, von den entsprechenden Behörden in Malaysia and Singapur veröffentlichen Daten, wird festgestellt, daß gegenseitige Investitionen in Malaysia und Singapur tief in der Geschichte verwurzelt sind. Wenn beide Wirtschaften sich im Laufe der Zeit entwickeln, beginnt die Struktur der Investitionsströme über die Straße von Malakka hinweg sich in Erwiderung der verschiedenen Ebenen der wirtschaftlichen Entwicklung und des Wettbewerbsvorteils zu wandeln. Malaysia ist der geographisch wichtigste Bestimmungsort der direkten Auslandsinvestitionen (Foreign Direct Investment - FDI) Singapurs gewesen. In ähnlicher Weise ist auch Singapur ein bedeutender geographischer Bestimmungsort für auswärtige FDI von Malaysia gewesen. Bei der Beurteilung der Rolle gegenseitiger Investitionen bei der Förderung wirtschaftlicheren Synergie erörtert dieser Aufsatz, wie Investitionsströme zwischen Malaysia und Singapur in Geschäftsnetzwerke eingebettet werden können. Es liegen eine Anzahl Fallstudien von Geschäftsnetzwerken führender übernationaler Korporationen von Malaysia und Singapur bei.

The idea of competitive advantage and the ideas of Michael Porter

This article is broadly supportive of the thesis of Michael Porter's Competitive Advantage of Nations, but issues a number of qualifications: There are important methodological limitations to his chosen approach. The thesis is over-deterministic in the role allotted to economics. It neglects the role of culture, custom, history and politics. Critics of Porter such as Krugman are reviewed. The question of industrial policy is raised, can it ever succeed, how and in what circumstances? © 1997 John Wiley & Sons, Ltd.

The idea of competitive advantage and the ideas of Michael Porter

This article is broadly supportive of the thesis of Michael Porter's Competitive Advantage of Nations, but issues a number of qualifications: There are important methodological limitations to his chosen approach. The thesis is over-deterministic in the role allotted to economics. It neglects the role of culture, custom, history and politics. Critics of Porter such as Krugman are reviewed. The question of industrial policy is raised, can it ever succeed, how and in what circumstances? © 1997 John Wiley & Sons, Ltd.