V The situation in a country regarding production factors, like skilled

labor,infrastructure, etc., which are relevant for competition in particular industries.

V These factors can be grouped into human resources (qualification level, cost of
labor, commitment etc.), material resources (natural resources, vegetation, space
etc.), knowledge resources, capital resources, and infrastructure.

V They also include factors like quality of research on universities, deregulation of

labor markets, or liquidity of national stock markets.

V These national factors often provide initial advantages, which are subsequently
built upon.

V Each country has its own particular set of factor conditions; hence, in each country
will develop those industries for which the particular set of factor conditions is
optimal.
V áescribes the state of home demand for products and services produced in a
country.

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V The existence or non-existence of internationally competitive supplying industries
and supporting industries.

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V The conditions in a country that determine how companies are established, are
organized and are managed, and that determine the characteristics of domestic
competition.

V In different nations, factors like management structures, working morale, or

interactions between companies are shaped differently. This will provide
advantages and disadvantages for particular industries.

V Typical corporate objectives in relation to patterns of commitment among

workforce are of special importance. They are heavily influenced by structures of
ownership and control.

V Family-business based industries that are dominated by owner-managers will

behave differently than publicly quoted companies.Porter argues that domestic
rivalry and the search for competitive advantage within a nation can help provide
organizations with bases for achieving such advantage on a more global scale.
V 


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V upply in the IT sector as most of the other service fields is mainly the talented
well-educated humane factor. In a region like Bangalore, India which is thought of
as India's ilicon Valley, it is not difficult to find this type of workforce taking into
account that labor in such a highly advanced sector is not expensive there. India's
comparative advantage when it comes to cheap highly-skilled labor makes it a
perfect place for IT investors.
V In Bangalore the literacy rate is 80.5% compared with 52% national rate. There are
25 engineering colleges and two of the most advanced IT institutes in and around
the city providing enough workforces for the industry. Moreover, many
multinational companies in the IT field are represented in the city such as TI,
iemens, Phillips, Lucent Technologies, Motorola, Oracle and others. It is also
worth mentioning, that the city accounts for 32% of India's software production.
V áespite the fact that other essential related sectors like telecommunications and
infrastructure are suffering big time in India, all other needs are sort of there in one
way or another. o IT sector in India could be a promising and attractive sector for
companies to consider the establishment of some kind of representation when it
comes to the factor conditions ( upply).
V The use of English in India's higher education system and the large number of
Y2K- related projects in the late 90s all contributed to demand for India's IT
industry services. The lack of clear government restrictions on this sector also
helped. India's overall exports from IT-related services accounted for 10.1 billion
U dollars in 2002 from 8.4 billion U dollars in 2001. That is about 17% jump in
one year. Furthermore, it is worthwhile to mention that there are no available
figures for the local demand.

V Eventhough the local market is not sophisticated yet and demand from within India
or even its neighbors is believed to be insignificant, most of the developed markets
demand India's IT products nowadays for their remarkable quality and their
reasonable price. As we just saw from the table above and the export figures
mentioned in the previous paragraph, India overall and Bangalore in specific is
now well known in the IT industry where people and businesses from all around
the world believe India is the right destination for there software solutions and their
other related IT services.
V The IT industry in India is normally thought of as a highly competitive cost based
one especially when it comes to the low value-added products. Competition there
also is increasing as far as the capital power and investment in process quality are
concerned. Firms operating in India are competing on recruiting and training the
highly qualified workforce and moving to higher value-added products as well.
V As the Indian government more realizes the importance of the IT industry for the
country's economy it relaxes restrictions and attracts more foreign and local
investments to this sector. That is to say, competition has been increasing in the
past few years and expected to increase for years to come.
V The U. by far is the largest market for India's software exports, its share of India's
software exports is 63 percent, with Europe coming in the second place with 26
percent, and Japan and the rest of the world accounting for the remaining 11
percent.
V There are more than 2,500 Indian software exporters where (TC , Infosys, Wipro,
atyam and HCL) are being the top five amongst them. While these top firms are
approaching the status of global brands, they together account for only about 35
percent of software exports. That indicates the tough competition as the rest of the
export market is dominated by small and medium enterprises.
V Information technology essentially refers to the digital processing, storage and
communication of information of all kinds. Therefore, IT can potentially be related
to every sector of the economy. The IT cluster in India, is now well integrated
evidenced by the availability of all different types of IT-related industries and
activities i.e. analysis and specification of requirements, design, coding, testing,
installation, maintenance, technical support, communication of information and
marketing.