Business Studies Sample Paper on Diamond Model

Diamond Model

            Diamond model is a strategy that firms use when approaching a new market outside their parent location. The strategy is categorized into six major factors that define a company’s competitive advantage in a new market. The entire six factors are equally important, but the factor condition is very fundamental in this approach. This is because the factor condition evaluates the physical resources, personnel, skills, capital resources and the available infrastructure. In this case, Alibaba Group Holding Limited is an internet-based firm that launched its operations in China facing competition from established firms such as Amazon and Ebay. It employed the diamond model strategy but the factor condition is more profound to the success of its operations. This is because an organization factors an array of conditions to establish whether it is suitable to commence its operations. One of these conditions is the availability of capital resources, which determines the capability of an organization to operate effectively. These resources include the finances to purchase inventory, equipment, and plant where the Alibaba Group had factored the issue of capital before commencing its operations.

            The factor condition also categorizes the human resource as an integral part of a firm in gaining a competitive advantage. The work force must be available, have the requisite knowledge and skills, and align with the labor regulations; hence, the company elicits productivity. Physical resources also play a great role because they have to be available to the consumer at anytime. For instance, the Alibaba Group had to streamline their logistics because their business is conducted on an online platform. The issues such as shipping the commodities to the consumers can cause a huge challenge to the firm. However, ensuring the physical resources such as inventory are available, the customer can get the products anytime. Therefore, the factor condition is a fundamental approach that enhanced Alibaba Group gain a market share in China in spite of stiff competition.