... Factor conditions, Demand conditions, Related and supporting industries and Firm strategy, structure and rivalry. They are all inter-related in what is commonly known as Porters Diamond. Firm strategy, structure And rivalry Factor conditions Demand conditions Related and supporting Industries This needs to be explained to deepen our understanding of competitive advantage. Factor conditions are the basic raw materials needed for economic activity, it is composed of factor endowments such as physical resources, human resources, knowledge resources and capital resources. Factor endowments have different characteristics; these can be sophisticated or basic. Everyone has basic factor endowments but it is the access to the sophisticated ones e.g. a highly educated workforce that can enable success. Factor endowments can alter over time, sometimes a sophisticated resource can become basic and the competitive advantage is lost, this also works vise versa e.g. Japan had a massive workforce and through investment in this human capital they now have a sophisticated ...

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