Factor Conditions

Factor conditions are the first element of the Porter Diamond model. These are the factors which

may or may not be available in the home country for instance, physical resources, human

resources, basic infrastructure, capital resources and knowledge resources. Factor conditions also

include the natural resources such as climate. Lebanon is participating in the international trade

liberalization with no long term planning and aiming in order to develop a national competitive

advantage and pushing strategic industries to get benefit from factor endowments research and

development and innovation. In Lebanon, sectors which are drivers of economic activity

includes, finance, real estate, construction and tourism. However, these sectors are not labor

intensive, and therefore attract cheap foreign labor. Most importantly Lebanon has tremendous

natural resources for instance, fertile land, rich sunshine and ample rain. Fruit and vegetables

which includes; olives, tobacco and other crops which are grown in the country. According to the

statistics of UNDP, the estimated number of jobs created each year in Lebanon does not exceed

4000 (Porter 1990).

Demand Conditions

Demand factors involve factors such as market growth, market growth and sophistication. These

factors help an organization in gaining competitive advantage, for example home buyers exert

pressure on the local firms to produce more advanced and technological products than the

foreign competitors. Lebanese government has to take necessary actions in order to encourage

strategic industries to participate at the international level and grow up faster to meet the needs of

the consumers and achieve economies of scale. Within the Lebanese firms there is still a need to

improve the quality standards of the products, through which the companies may achieve

competitive advantage and economies of scale. Cement industry in Lebanon needs to be

revitalized; the foreign manufacturers are looking to renew their association with the local

companies. The cement industry in Lebanon is not working efficiently because of the slowdown

in the local construction (Yeniyurt et al. 2005).

http://www.discoverlebanon.com/en/panoramic_views/major-industries.php

Firm strategy, structure and rivalry

This element of the diamond model outlines how organizational are managed and organized,

their nature of rivalry and objectives in the home market. It is difficult for organizations to

compete in the international market the way organizations are formed, developed and set goals

and objectives. However, presence of an intense rivalry makes the competition more intense. The

monopolistic structure of Lebanon plays a vital role in destroying the domestic productive

structure. The monopolistic structure does not allow the organizations to upgrade or innovate;

moreover the firms are not been able to reduce their average cost of production (Ma 2004).

Related and supporting industries

This element of the diamond model involves the companies within the home country which are

considered to be a leader in manufacturing a specific product. These types of industries help

other organizations to produce products at a low cost. Moreover, the growth of one industry

affects the growth of other industries. The main industries which are playing an important role in

boosting the Lebanon economy includes, food processing, cement, textile, chemical , wood and

furniture and metal fabrication. Banking is considered as one of the most important and

successful industry of Lebanon. Interestingly Lebanese economy keeps of growing from the last

decade but without creating any jobs for females and youth. The strategic institutions take
findings and loans from the strong financial institutions which primarily includes the banks, in

order to meet the global competitive advantage. According to the Association of banks in

Lebanon, the receivables to the GDP have reached 87% in 2010. Tourism industry is supporting

the hospitality industry in Lebanon, each year more than a million tourist visits. According to the

statistics of 2002, average tourist spends $2000 in the country (Yip 1995).

There are many other small sector industries in Lebanon such as, Textile and leather which are

under intense competition with other regions. Pharmaceutical industries

There are of course many smaller sectors of industry in Lebanon though there is no

heavy industry. Textiles and leather, which under intense competition from other regions

has declined, could, under the new partnership with Europe, recover. Pharmaceuticals

are a growing and specialized market exporting to Arab and Western countries. Jewellery

manufacture, very close to many Lebanese womens hearts, is carried out mainly by the

Armenian community in small workshops. The quality (and the price) is high and it is

therefore aimed at a specialist market.

http://www.discoverlebanon.com/en/panoramic_views/major-industries.php
 References

Ma, H., 2004. Toward global competitive advantage: Creation, competition, cooperation, and co-

option. Management Decision, 42(7), pp.907924.

Porter, M., 1990. Competitive Advantage of Nations. Competitive Intelligence Review, 1(1),

pp.1414.

Yeniyurt, S., Cavusgil, S.T. & Hult, G.T.M., 2005. A global market advantage framework: The

role of global market knowledge competencies. International Business Review, 14(1), pp.1

19.

Yip, G.S., 1995. Total Global Strategy: Managing for Worldwide Competitive Advantage.

Englewood Cliffs, pp.121124.