Indian Spice Industry--Application to Porter's Diamond

Indian Spice Industry--Application to Porter's Diamond

Olga Ryan

Benedictine University

International Business

MBA 539

Dr. Cindy Atchley

September 11, 2013

Abstract

Industrial clusters are apparent across the globe in various industries. Several economists and philosophers have proposed theories suggesting explanations for this phenomenon. Dr. Michael Porter of the Harvard Business School proposed that a national competitive advantage is resultant from the contribution of four elements; factor endowments, demand, supporting industry and rivalry within the industry (Hill, 2011). His research suggests that nations with the more the favorable the environment within each element and greater interplay between the elements can create a positive landscape for industry proliferation. The Indian spice industry provides a robust example in support of Dr. Porter’s Theory. The factor endowments, basic and advanced, are apparent in an analysis of land distribution, climate and societal investment into the industry. Local demand for spices as well as neighboring presence of fertilizer and processing industries contribute to the chain of production while community investment and inter-industry completion have stimulated innovation and increased efficiency within the industry.

Indian Spice Industry--Application to Porter's Diamond

The concept of trade among societies has been captured throughout multiple examples of recorded history; for some civilizations trade was essential to their functionality and survival. Ancient Mesopotamia, for example, was rich with fertile soil and able to produce “grain, oils and textiles,” ("Mesopotamia," 2007, para. 1) however lacked structural materials for building such as timber, metals and stones. Ancient Mesopotamians bartered and traded products of surplus to supplement their limitations, building elaborate trade routes and means of delivery. The need to trade also contributed to the society’s exposure to neighboring...