F.

) According to Porters diamond theory a nation can create a competitive advantage for its industries through major satisfying basic conditions that include factor conditions, demand conditions, relating and supporting industries, firm strategy, structure and rivalry, and the role of government. Factor conditions: Taiwan offers well-qualified people in the manufacturing of electronics. Demand conditions: Demand for electronic goods produced in Taiwan is great throughout the world. Major companies such as Dell, Compaq, and IBM outsourced almost 65% of their notebook production activities to Taiwan. Relating and supporting industries: Taiwan offers a very well developed supply base for parts and its computing industry is continually expanding. Firm competition, structure and rivalry: Fierce competition and rivalry amongst local companies eventually leads to increased efficiency. Government Role: Taiwans government encouraged foreign investment through tax and venture capital incentives. Land in scientific industrial parks was given at modest rates.

G.) China is a favored manufacturing hub due to the fact that it satisfies porters diamonds main conditions. China has land, water and other natural resources as well an abundance of human resources, modern infrastructure and transport system. Competition and rivalry among local companies is fierce. All these reasons along with the low labor costs make China a favored location for electronics manufacturing.

Chinas increased involvement in trade gives it access to foreign investments.