Japanese firms must deliver very high quality to meet the expectations of Japanese consumers.
Tokyoform – Tokyo 2966 – CC BY-NC-ND 2.0.
Factor conditions refer to the nature of raw material and other inputs that firms need to create goods and services (Table 7.7 “Factor Conditions”). Examples include land, labor, capital markets, and infrastructure. Firms benefit when they have good access to factor conditions and face challenges when they do not. Companies based in the United States, for example, are able to draw on plentiful natural resources, a skilled labor force, highly developed transportation systems, and sophisticated capital markets to be successful. The dramatic growth of Chinese manufacturers in recent years has been fueled in part by the availability of cheap labor.
Table 7.7 Factor Conditions The factor conditions in a country serve as the basic building blocks of doing business within the country. Below
we provide examples of how important factor conditions have provided competitive advantages for firms based in certain different countries.
7.3 Drivers of Success and Failure When Competing in International Markets 222
Land Russia has the greatest land mass of any country in the world and it enjoys vast oil deposits. This abundance of natural resources has helped Russia’s petroleum industry become one of the largest in the world.