“Samsung Electronics has formally opened a new factory in India, which the South Korean tech group

says is the world’s biggest mobile phone manufacturing plant, part of its plans to expand production in
the world’s fastest growing major mobile phone market.

Porter is not preoccupied with explaining the export and import patterns of nations but rather with
explaining why some nations are more competitive in certain industries. He identifies four elements that
are present to varying degrees in every nation and that form the basis of national competitiveness. The
Porter diamond consists of :

(1) factor conditions, nation’s resources,

basic factors: a large labor force, natural resources, climate, or surface features, as paramount factors in
what products a country will produce and export.

Advanced factors include: the skill levels of different segments of the workforce and the quality of the
technological infrastructure in a nation.

abundant skilled workforce in India, India boasts a vast network of technical and management
institutions that are of the highest international standards. These institutions develop excellent human
resources. India also has a strong base of an English-speaking population for business purposes.

Example real life: Japan did not acquire its advantage in automobiles because of its natural resources of
iron ore—it has virtually none and must import most of the iron it needs. These countries developed
their productivity and advantages in producing these products through deliberate efforts.

(2) demand conditions, A sophisticated domestic market drives companies to add new design features
to products and to develop entirely new products and technologies. Companies in markets with
sophisticated buyers should see the competitiveness of the entire group improve.
huge market base and fast-developing spending habits of middle-class Indians

(3) related and supporting industries, supporting industries spring up to provide the inputs required by
the industry. This happens because companies that can benefit from the product or process
technologies of an internationally competitive industry begin to form clusters of related economic
activities in the same geographic area. Each industry in the cluster serves to reinforce the productivity
and, therefore, competitiveness of every other industry within the cluster.

joining the 'Make in India' program (Prime Minister Narendra Modi launched the Make in India initiative
on September 25, 2014, with the primary goal of making India a global manufacturing hub, by
encouraging both multinational as well as domestic companies to manufacture their products within the
country.) will also help Samsung to compete more effectively with rivals such as China’s Xiaomi, which
became India’s biggest smartphone brand by shipments earlier this year. Samsung was the top
smartphone seller in India but it was overtaken by Xiaomi — the Chinese rival that just went public in
Hong Kong — at the end of 2017.

Xiaomi is also building up its presence in India, where its cheaper devices have appealed to price-
conscious consumers. in the country. More than 95% of Xiaomi smartphones sold in India today are
made in India, allowing the company to avoid the tariffs on imported smartphones that have
hobbled(move unsteadily) rivals such as Apple (AAPL).
Apple (AAPL) started manufacturing some iPhone models at a plant in Bangalore last year, but it still
imports the vast majority of its devices into the country.

It recently tripled its Indian manufacturing base by adding four smartphone plants

It now has a total of six factories that it says can produce two smartphones every second.

(4) firm strategy, structure, and rivalry. The more intense the struggle to survive between a nation’s
domestic companies, the greater will be their competitiveness. This heightened competitiveness helps
them to compete against imports and against companies that might develop a production presence in
the home market.

Government and Chance

Apart from the four factors identified as part of the diamond, Porter identifies the roles of government
and chance in fostering the national competitiveness of industries.

First, governments, by their actions, can often increase the competitiveness of firms and perhaps even
entire industries. Governments of emerging markets could increase economic growth by increasing the
pace of privatization of state-owned companies,

Second, although chance events can help the competitiveness of a firm or an industry, it can also
threaten it.

government policies should not be designed to protect national industries that are not internationally
competitive but should develop the components of the diamond that contribute to increased
competitiveness.

vibrant democratic setup, which is aptly underpinned by a broad legal framework and independent
judicial system. The Indian government also allows foreigners to make direct investments in the country's
firms by way of acquiring share and debentures.