Every day, in a third-class carriage of the express train that rolls between Bombay and Ahmedabad, plainly dressed couriers carry precious cargo: diamonds. Rough gems are imported to Bombay from dealers in London, Antwerp, Tel Aviv, and New York, taken by these couriers to cutting and polishing centers in Gujarat state, and then
Carried back to Bombay to be reexported to the world. This system, based on trust,
Secrecy, and skilled low-cost labour, has been working for half a century. It has helped make India the world's premier center for diamond cutting and polishing. Nine out of every 10 stones sold in the world pass through India, making diamonds that country's
Largest export at $6.6 billion a year. This ability to use its skilled labour as a resource is an example of what Michael Porter would term:
A)demand conditions.
B)structural conditions.
C)factor conditions.
D)socio-cultural conditions.

Question

Quizplus · Accepted Answer

Michael Porter's theory of competitive advantage suggests that the success of a nation's industries is based on four interlinked factors: factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry. In this case, the ability to use skilled, low-cost labor as a resource is a factor condition that has helped India become the world's premier center for diamond cutting and polishing. The other options - demand conditions, structural conditions, and socio-cultural conditions - do not adequately describe the role of India's skilled labor in the diamond industry.

Every Day, in a Third-Class Carriage of the Express Train