International Business Environment for Porter- myassignmenthelp

Question: Discuss about theInternational Business Environment for Porter Theory. Answer: Introduction Porters diamond theory of national advantage is a significant theory that deals with the competitive advantages of countries. This theory states that countries can enhance their competitiveness by developing its different factors, which are available to them. It can be used to evaluate the ability of firm to operate the business in national market. In addition to this, it also analyzes the ability of national market to compete in global business market. It offers a model, which can assist in understanding the competitive position of the country in international competition. This theory mentions various factors for competitive advantage for different countries. These factors are such as firm strategy, structure and rivalry, factor endowments, demand conditions and related and supporting industries (Acs, Audretsch, Lehmann, and Licht, 2017). The major objective of this report is to discuss and apply Porters Diamond theory of National Advantage on Bank of Ireland. About the banking industry in Ireland, it can be stated that this industry is very significant for the development and stability of the countrys economy. Banking system in Ireland is very strong and it is regulated by different set of laws and regulations, which have united the directives of European Union. The major regulatory organization for Irish banking sector is the National Bank of Ireland that offers the rules and regulations for commercial banks, which are running their operations in Irish market (International Trade Administration, 2018). The Bank of Ireland is a commercial bank that is operated in Ireland and it is the part of traditional Irish Big Four banks. It is the type of public company that was founded in the year 1783 and headquartered in Dublin, Ireland. By offering premier banking operations and services, this bank occupies an exclusive position in the banking history of Ireland. It is the oldest bank in on-going banking operations in Ireland. Bank of Ireland is controlled by the Central Bank of Ireland. Currently, this organization has started to offer 365 online banking services, under which it offers flexibility and convenience to operate day to day banking on internet at any place and any time, which suits the customers (Bank of Ireland, 2018). Apart from this, the organization is offering both insurance and banking services to its domestic customers, who can be legal entities, natural persons, several institutions etc. As most of the Irish banks, Bank of Ireland also provides the services such as loan accounts, investment services, deposit accounts, current accounts, mortgage accounts etc. The below report discusses various factors, which contribute to the growth and success of Bank of Ireland in national and international industries. In this report, Porters National Diamond Theory of Competitive Advantage assists in understanding the ways how Bank of Ireland creates and sustains competitive advantage. It is the key to explain that what role the country plays in the success and processes of organization. By the use of this model, external competitive environment that assists organizations to determine the related strength and explain why banking industry in Ireland has become competitive and have regional and domestic advantages (Bessis, 2015). Firm Strategy, Structure and Rivalry Firm strategy, structure and rivalry are one of the factors of Porters Diamond Analysis that varies from nation to nation. Firm strategy, structure and rivalry are significant for the growth and success of a company. These strategies assist the organization in establishing new objectives, structure assists in managing the business activities and operations and rivalry assists in developing new and innovative ideas in companies (Cassidy, Barry and Egeraat, 2009). This factor of this framework is related to the way, in which a company is managed and organized, its corporate goals and the analysis of competition within its organizational culture. Moreover, it emphasizes on the conditions in a nation, which determine where the organization is operating its business. In the context of this factor, it can be stated that competitiveness breeds growth and success in an organization. The banking industry of Ireland is becoming highly competitive and it is very difficult to attain competitive advantage. There are various players, which are posing intense competition to Bank of Ireland. These players are such as National Irish Bank, Allied Irish Bank and Ulster Bank. By looking at the Irish Banking Industry, it can be stated that there is a tough rivalry among lots of banks. So, they are competing intensely and developing more unique and quality services (Barbosa, de Paula Rocha, and Salazar, 2015). As there are various competing banks, so people shift between banks easily because they are situated in same location, i.e. Dublin. If they are dissatisfied with the services of one bank, then they shift to other competitors in the similar sector. This is the major factor that drives the Bank of Ireland to become more competitive and innovative in the globa l market. The Bank of Ireland is doing so in the technologically sophisticated banking processes, which are not done by other rival organizations (Lazzarini, 2015). By the use of advanced and innovative technologies, Bank of Ireland offered 365 online services. These services of organization provide convenience and flexibility to practice its banking and account services. It has diversified its services in online banking, retail and commercial banking. To deal with the strong competition, Bank of Ireland is adopting various effective strategies such as; it has established a strong distribution network. Moreover, it has expanded its operations in Great Britain by the acquiring other banks. Marketing strategies of Bank of Ireland are very effective and it has enhanced its visibility through sponsoring sports events (Barney, 2014). Instead of strong competition, Bank of Ireland is able to gain higher competitive advantage by the use of effective strategies and structure. In this country, governme nt has developed strict rules and legislations for international players, which are attempting to enter into Irish banking industry. It helps this bank in attaining competitive advantage over international players also. Thus, it can be stated that direct competition is the major component that compels the Irish banking firms to work for enhancing their innovation and productivity in the industry. In Ireland, the companies are trying to be more innovative and qualitative due to competitive pressure from leading players in the industry (Gianiodis, Ettlie and Urbina, 2014). Factor Endowments It is another factor in the country that is related to the production and service factors of business, i.e. infrastructure and knowledge. According to this economic theory, factor endowment of a nation is commonly understood as amount of capital, labor, land and entrepreneurship, which a nation have and it can exploit for offering services (Wagner III and Hollenbeck, 2015). Factor conditions are significant aspects such as skilled and technology resources, which a nation develops. There are the factors to determine the competitiveness in particular sectors. These factors can be convened into important resources such as human resources, infrastructure and knowledge resources. In addition to this, the country includes the domestic buyers, which have demand and awareness for quality, innovative ad advanced products that can create global competitiveness for the organization (Byun, Lee, and Kim, 2016). In the Irish banking industry, the factor conditions are physical resources, human res ources, capital resources, knowledge resources and infrastructure. These are the most sparkling corner of Dublins diamond. Ireland country boasts talented, well-educated and native team. In addition to this, the Banks in the country are attracting experienced people from all over Europe, so that they can deliver the banking services effectively. Currently, Bank of Ireland has a strong workforce of more than 15000 employees. The company has trained its employees with different cultures and languages, so that they can expand their business in other countries and engage in international banking industry. In the country, there is a large presence of software companies that has provided different software to the banking companies. Ireland country has got a talented workforce and following the hard and long recession. Due to this, the talent and workforce of this company are comparatively cheaper than other neighboring countries. The country has good infrastructure and telecommunication f acilities, which assist this bank in gaining competitive advantage in this industry (Fainshmidt, Smith, and Judge, 2016). About Dublin, Ireland, it can be stated that country has enough supporting infrastructure that is required by the banks for operating their processes and connecting with their clients. Moreover, knowledge resources are also plentiful in the form of research and third level educational facilities. In the context of capital resources, Dublin has a strong venture capital community and the country has easy access to the government funding and debt financing. Apart from this, another component is the 45% decrease in the rental prices of offices, which have occurred in the city post-crash (Cullen, 2015). In Ireland, most of the banking firms reported that they are receiving non-financial support like marketing information, management development skills and business planning data from state agencies. Thus, it can be said that government and other state agencies are supporting the organizations in the development of factor conditions in the country. Irish telecommunication infrastructure is very beneficial for the competitive success of organization. Thus, the primary factors that are used by the Irish banking industry and Bank of Ireland and which may have a large impact on its competitiveness are capital resources, labor, talent, technological resources and infrastructure. By looking at the Irish scenario, it can be stated that factor conditions in Ireland are moderate for the Bank of Ireland and other firms in the banking industry, but they cannot be used solely (Kharub, and Sharma, 2017). Demand Conditions According to the Porters model of National Competitive Advantage, regional and local demand is the major root of national competitive advantage. Demand condition is the component that refers to the size and nature of customers of products and services in the domestic market. The demand conditions in the nation encourage the local companies to enhance their products and services offerings. If product and service demand will be more in the local market, then it can affect the customer demand in international market. In todays globalized environment where the local demand seems to be redundant, Porter recommends domestic demand can offer competitive advantage of an organization (Hallissey, 2016). An extensive local market can provide the major driver for a firm to upgrade and innovate before shifting to the international markets. Moreover, a country can adopt its culture and values to develop a market in foreign land. For most of the organizations, it seems that communication with the c ustomers in Ireland has been profitable and in this context regional demand conditions have some impact on indigenous banking sector. For instance, interaction with customers has assisted Bank of Ireland to develop innovative and improved products and services, which are specialized for targeted audiences. For Bank of Ireland, demand conditions are shown by the demand of traditional banking services such as; giving loans, accepting deposits etc. Number of accounts of bank customers and how better their related with the banks profits is important to be considered. In the case of Ireland market, there are different arguments, which can be made (Kelly, Brien, and Stuart, 2015). First, the home market in the country is very small to gain substantial economies of scale advantages and there is less incentives to make investment. However, it is improbable that Irish banking firms develop its banking services by keeping only Irish customers in mind. The country is emphasizing on expanding its demand conditions in United Kingdom that has given a closeness of the UK industry and historical connections between both countries (Floyd, Ardley, Summan, Rahman, and Vortelinos, 2016). This can be looked by the close link between the economy of UK and Ireland. This independence on UK industry has dropped intensely during past 35 years, but still UK is the largest customer of Ireland. By developing retail banking and online banking, Bank of Ireland is creating demand of its services in international market also. It is offering the services and facilities to international transfer of funds. Mobile banking of Bank of Ireland is designed to assist the customers to perform the banking in an effective and convenient manner (Baptista, and Oliveira, 2015). It has made international fund transfer very easy and secure by developi ng this facility. About Ireland, it is true that it is the home to some innovative, demanding and advanced customers, especially from banking and financial service industry. Therefore, the demand, which entices US and UK based companies to Ireland is not local but rather than regional. From the analysis of country, it can be stated that demand conditions solely are not important in Ireland, because they are dependent on other components of National Diamond theory like intense rivalry among local players. Related and Supporting Industries Related and supporting industries are the contributors for a nation, which drive the growth and success for other industries and overall economy. The growth and success of a market depends of the presence and contribution of suppliers and related industries in a region. In a country, the companies should involve the industries, which are considered as a major leader of a specific product or service. These suppliers and industries assist in reinforcing internationalization and innovation. If a company is successful, then it can be profitable for other supporting and related industries (Kumar, 2017). In a country, it is very important for a countrys growth as development of one sector affects the growth and success of other sectors. Supporting and related industries refers to the retailers and distributors, research institutes, distribution systems, tools and equipment, raw material suppliers, transportation system and other sectors, which use technology and other required facilities. Related and supporting industry is an essential determinant of national competitive advantage. There are various industries in Ireland, which are related and supporting to banking industry and which have a large impact of its importance. One of the most significant related industries of Bank of Ireland is those, which have assisted the bank to develop the skills and knowledge of labor that have proven meaningful and valuable for the banking industry. In addition to this, Information Technology (IT) industry is the most supporting industry as there are so many IT organizations, which are offering updated technologies and software to operate banking services (Bishnoi, and Devi, 2017). In Ireland, supporting and related sectors are surely contributing to the competitiveness and growth of Bank of Ireland. There are various risky businesses, which rely on traditional banking as they can have difficulties in getting loans and raising funds from public and financial markets. The survival of these risky businesses assures the development of banking industry in Ireland. With the increase in the demand of these risky businesses, there will be growth in the banking services and systems because this is the only source of funding for their business operations. These are the industries, which assist this bank in developing factor conditions in Ireland and gain competitive advantage over other players (Gibson, 2015). Apart from this, there are some other industries in the country such as insurance, venture capital, asset management and credit services. These organizations offer the services, which resemble the banks services. This has an adverse impact on the competitiveness o f Bank of Ireland. The people in country are shifting their interest towards these industries and companies that is reducing the customer base of the banks. To deal with the issues, the banking firms have established alliance and business relationships with the foreign companies (Jussila, Krkkinen and Aramo-Immonen, 2014). It has been purchasing the hardware and software from the foreign IT companies and taking marketing and promotional assistance. Bank of Ireland has adopted effective strategies such as merger, strategic alliance and acquisition. Thus, this factor of Porters Diamond of National Competitive Advantage is equally important to other factors and it is important to develop factor and demand conditions in the country. Conclusion From the above analysis, it can be concluded that Porters Diamond of National Advantage is an important model that analyzes different conditions and factors of a country. It states how the country is profitable for the organizations, which are operating business in this country. According to this theory of Porter, factors of country play a vital role in the growth and success of a company in global market. These factors are depicted in the shape of diamond, so it is known as diamond theory. The above report shows that there are various factors, which determines the national advantage. It is used to evaluate the external environment and marketplace that assist the organizations to determine the related strengths and describe that why some of the industries are competitive and have national advantages. These advantages can be evaluated by four factors such as firms strategy, structure and rivalry, factor conditions, demand conditions and supporting and related industries. These factors interact with each other and assist the firms in enhancing the competitiveness and gaining competitive advantage. The above report describes these four factors in context of Bank of Ireland. From this discussion, it can be stated that competitive advantage is moderate for the Irish Banking industry. A single factor is not sufficient for the growth and success of Bank of Ireland. The country should possess a combination of factors to gain national competitive advantage (Pinto, 2015). The outcomes of the above analysis indicate that business environment of the country is very supportive and can assist the organization in creating a foundation for getting comparative edge. The Irish banking industry has a powerful competitive position. There is a combination of profitable impacts, which have proved effective for the industry and Bank of Ireland. In the case of Bank of Ireland, factor conditions have been significant for the quality and availability of skilled workforce. In many ways, local demand conditions have a positive effect on creating competitive edge of most of the banking firms. Under the strategy, structure and rivalry factor, it can be stated that Bank of Ireland is adopting various effective strategies to deal with the intense competition in the industry (Riasi, 2015). It is making specialization and developing in different market niches that give it a sustainable and competitive market position. Domestic competition has positive impact on the competitiveness of banking companies in Ireland. In addition to these factors, there are some supporting and related industries, which have assisted banking organizations in developing skills and knowledge of labor in this industry. IT industry plays a vital role in the growth of Irish banking industry. Combination of these factors is beneficial for the organizations growth in a country. Thus, Ireland is a favorable country for the growth and success of banking firms and offering various regional advantages to Bank of Ireland. References Acs, Z.J., Audretsch, D.B., Lehmann, E.E. and Licht, G., 2017. National systems of innovation.The Journal of Technology Transfer,42, 997-1008. Bank of Ireland, 2018, Bank of Ireland - For small steps, for big steps, for life, Available from https://www.bankofireland.com/ on 12 March 2018. Baptista, G. and Oliveira, T., 2015. 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