Diamond Model Porter

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Definition: Diamond Model Porter

Micheal Porter proposed this model in his book, the competitive advantage of Nations, to explain why certain industries flourish in particular areas only. The model says that industry is dependent on four primary factors as shown in the diagram.

  1. Factor Conditions: This includes the availability of the factors of productions: eg. labor, capital, raw material, knowledge. For example: Rubber and labour should be available for a tyre company.
  2. Demand Conditions: The industry should be having enough demand in particular area for the industry to flourish.
  3. Related and Supporting Industries: For example: presence of rubber processing industries and automobile companies plays a big role in success of a tyre company.
  4. Strategy, Structure and Rivalry in the industry also determines the industry’s success.

Diamond Porter 

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