Double Diamond Model

Explain the double diamond. How is it more powerful than Porter’s Diamond?

First, it is essential to understand what Porter’s Diamond model is all about. It can be described as the configuration of four sets of attributes which, in Porter’s theory, determine a nation’s competitive advantage [ (G. A. Cole, 2011) ]. These attributes are namely; factor conditions, demand conditions, related and supporting industries and firm strategy, structure and rivals. Additionally, Porter identifies these four factors as largely responsible for a firm’s comparative advantage.

However, over time the model revealed a few limitations. Essentially, it fails to consider and incorporate the nature of multinational activities (which are on the rise due to globalisation) such as inbound and outbound foreign direct investments (FDI) in the context of the global economy [ (Sardy & Fetscherin, 2009) ]. The model exclusively focuses on the home country conditions or factors influencing competitiveness. This in turns diminishes its validity and effectiveness as a model of analysing competitiveness.

Due to these limitations, a modification of the model was developed by Rugman and D’Cruz (1993) and was named the Double Diamond Model (DDM). It aims to overcome the shortfalls of Porter’s model stated above. The double diamond takes a more international approach to analysing firm competitiveness compared to Porter’s original diamond model. It can be used to better understand the international marketing strategies and implementation of foreign countries, for instance MNEs. The DDM provides a foundation to look into the international competitiveness of MNEs, for example a major trading partner, by compiling data (or a “diamond”) based on the four factors mentioned above and comparing them to, the “diamond” of the home country. As [ (Sardy & Fetscherin, 2009) ] puts it, this approach considers both the home country and the leading host country partner’s diamond for international...