This essay “Diamond Model Analyze” seeks to explain the environment factors that a company can consider when attracting direct foreign investment. The diamond model as an economic model by Porter Michael explains why certain industries are more competitive in certain locations. …
These are very important. A country endowed with natural resources that are important for the production especially in the line that the foreign investor has interest will be an advantageous situation. Further, infrastructure makes it easy for operations reducing cost of doing business. For example an existence of an airport makes it easy for transportation of goods or perishable products and as such is a good environment for wooing direct foreign investment.Secondly, the demand conditions also come to play. As a factor that would influence the ability for doing business for foreign investors. Demand for the products that are generated by the foreign investor is an environmental factor of consideration. Without demand the investor will not be attracted and as such no foreign investment can be realized. Related supporting industries in the line that the foreign investor is also necessary and is a factor to consider. This is because they make easier the operation of the given foreign company and as such their existence around can provide a good environment for the survival and operation of the foreign investment. For example if the direct foreign investment was targeting production of cotton, an existence of textile industry or other related ones will make the investment viable and as such encourage direct foreign investments. Competitive opponent’s existence is another environment factor that should be taken in to account when trying to woo a foreign direct investor. ...
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