Porter’s Diamond Theory: The Case of Nigeria

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Table of Contents

The Case of Nigeria: Porter’s Four Factors
Limitations
Conclusion
References

The American strategy professor Michael Porter developed the diamond model to explain the competitive standing of businesses on the market. The model owes its name to its shape reminiscent of that of a diamond. Nigeria is the most populous country in Africa, whose economic growth remains fragile and not exactly predictable. This paper will explain how Nigerian industries and organizations could improve their performance and efficiency, drawing on the theoretical framework provided by Porter.

The Case of Nigeria: Porter’s Four Factors

To build a comprehensive model relevant to Nigeria, one should analyze each of the factors in regards to the country’s current business environment. Thus, the model might look as follows:

Firm strategy, structure, and rivalry refer to organizational management within a given industry (Gamble, Peteraf, & Thompson, 2014). Eniola, Entebang, and Sakariyau (2015) argue that some of the greatest obstacles to economic growth in Nigeria include insufficient use of technology and poor knowledge regarding marketing techniques. On a larger scale, Nigeria’s business environment suffers from government corruption and red tape, which should be tackled to reach prosperity.
Factor conditions pertain to Nigeria’s factors of production, including labor, natural resources, infrastructure, and land. Nigeria is rich in natural resources such as gas, tin, coal, iron ore, limestone, zinc, lead, and arable land. However, as Eniola et al. (2015) point out, there is evidence of deteriorating man-land relationships and poor land use.
Demand conditions. To stay afloat and move forward, Nigerian industries and organizations should be digital-oriented and use modern technologies more extensively. One of the ways to ensure a solid presence on the market is to go online: statistics show that by 2023, 84.5% of Nigerians will be using the Internet as part of their everyday lives (Statista, 2019).
Related and supporting industries. One particular industry that can enhance the performance of all others but that is in dire need of changes is infrastructure. Nigeria is a big country, and as Eniola et al. (2015) note, many regions have yet to enjoy proper communication.

Limitations

For all its virtues, Porter’s diamond model is not devoid of certain pitfalls. First, while the proposed statements may be true, the model does not exactly assess Nigerian industries and organization’s abilities to succeed. The four factors may be seen as valid predictors of economic standing and performance. However, it is not easy to judge whether a given company or firm will take advantage of all the opportunities and use the available resources wisely. Eventually, it comes down to the vision and strategy that a business has and how adequate it is about Nigeria’s environment. Second, other factors may influence success, especially events that were not predictable, such as sudden setbacks or technological developments. For instance, when in 2016, a terrorist organization Boko Haram was committing atrocities in Nigeria, kidnapping and killing its citizens, many investors turned their backs on the country (Felter, 2018). Thus, to remain reliable, Porter’s diamond model for Nigeria needs to be readjusted after each major event.

Conclusion

Porter highlighted four essential factors that determine whether a business can gain a competitive advantage. These included firm strategy, home demand and conditions, factor conditions, and related support industries. To improve their economic standing, Nigerian industries and organizations should make an effort to fight corruption and red tape. Marketing, technology, digitalization, and adequate resource management may also be good predictors of economic growth. Porter’s model is relevant to the current situation in Nigeria but needs readjustments given social and political events.

References

Eniola, A., Entebang, H., & Sakariyau, O. B. (2015). Small and medium scale business performance in Nigeria: Challenges faced from an intellectual capital perspective. International Journal of Research Studies in Management, 4(1), 59-71.

Felter, C. (2018). Nigeria’s battle with Boko Haram.Council on Foreign Relations. Web.

Gamble, J. E., Peteraf, M. A., & Thompson, A. A. (2014). Essentials of strategic management: The quest for competitive advantage. New York, NY: McGraw-Hill Education.

Statista. (2019). Number of internet users in Nigeria from 2017 to 2023 (in millions).Web.

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Porter’s Diamond Theory: The Case of Nigeria

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