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TitleTo what extent is Porter’s Diamond a useful concept in explaining the home and host locations of international businesses?
TagsStrategic Management Competitive Advantage Supply Chain International Business Competitiveness
File Size229.1 KB
Total Pages7
Document Text Contents
Page 1

http://www.carrefour.com/
http://www.marksandspencer.com/

Page 4

http://www.geert-hofstede.com/

Page 5

5


locations such as Belgium, Spain and Brazil (Frynas and Mellahi, 2011) which

according to Hofstede‟s dimensions have very similar scores.

Consequently I think that for the understanding and choice of home and host location

the model should only be a starting point of the environmental analysis, i.e. a

research on a macro level, but it should then be followed by a more thorough

research on a meso (e.g. competitor analysis, Porter‟s Five Forces) and micro (e.g.

value chain analysis, cultural analysis) level (Hollensen, 2011: 104). Even though

such researches are very costly and time-consuming, they are necessary for making

the right decision because location is crucial for international success. If not, a failure

because of a wrong location would be even more costly as in the case of M&S when

it closed all its stores in the US. That is why additional models should be used to

gather more in-depth and purposeful information on exact needs and industry

characteristics in order to explain what is behind organisational location decisions.

In conclusion, no model can be perfect and in fact, no model actually is simply

because countries and companies differ fundamentally and no generalisation is

possible. All environmental analysis frameworks have missing considerations. What

matters from a company‟s perspective however is the combination of the right models

that best fit to its own needs and capabilities for sufficient results. Porter‟s Diamond

Model alone is not enough for fully making or explaining the decision where to

internationalise. It is however an excellent starting point because it provides the basic

selection criteria for understanding home and host locations and how to build and

exploit competitive advantages.

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References:

Cambra-Fierro, J. and Ruiz-Benítez, R., 2011. Notion for the successful management

of the supply chain: learning with Carrefour in Spain and Carrefour in China.

Supply Chain Management: An International Journal, [e-journal] 16(2), pp. 148-

154. Available through: Emerald Database [Accessed 24 November 2011].

Collier, N., 2007. Marks and Spencer. In: Johnson, G., Scholes, K. and Whittington,

R., 2008. Exploring Corporate Strategy: Text and Cases. 8
th

ed. Harlow:

Pearson Education Limited. pp. 831-839.

Financial Times, 2011. Suppliers feel the pinch as retailers seek better terms. 21

November 2011.

Free Case Study, 2011. Case Study on Marks and Spencer. [online] 22 February

2011. Available at: <http://freecasestudy.wordpress.com/2011/02/22/sample-

case-study-marks-spencer/> [Accessed 2 December 2011].

Frynas, J.G. and Mellahi, K. 2011. Internationalization of a French retailer-Carrefour.

In: Frynas, J.G. and Mellahi, K. 2011. Global Strategic Management. 2
nd

ed.

New York: OUP Oxford. Ch. 5, pp. 148-149. [online] Available at:

<http://www.oup.com/uk/orc/bin/9780199543939/frynasmellahi2e_ch05.pdf>

[Accessed 2 December 2011].

Hollensen, S., 2011. Global marketing. 5
th

ed. Harlow: FT Prentice Hall.

Mellahi, K., Jackson, P. and Sparks, L., 2002. An Exploratory Study into Failure in

Successful Organizations: The Case of Marks & Spencer. British Journal of

Management, [e-journal] 13, pp. 15-29. Available through: EBSCOhost

Database [Accessed 24 November 2011].

Peacock, L., 2011. Marks & Spencer's Bostock 'very disappointed' over reports she is

in talks to quit. The Telegraph, [online] Available at:

<http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8912575/

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http://freecasestudy.wordpress.com/2011/02/22/sample-case-study-marks-spencer/
http://freecasestudy.wordpress.com/2011/02/22/sample-case-study-marks-spencer/
http://www.oup.com/uk/orc/bin/9780199543939/frynasmellahi2e_ch05.pdf
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8912575/Marks-and-Spencers-Bostock-very-disappointed-over-reports-she-is-in-talks-to-quit.html
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8912575/Marks-and-Spencers-Bostock-very-disappointed-over-reports-she-is-in-talks-to-quit.html
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8912575/Marks-and-Spencers-Bostock-very-disappointed-over-reports-she-is-in-talks-to-quit.html

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