Chapter 8: International Strategy 245
on its bananas and packaged salad product lines. Now, Chiquita produces almost one-
third of the bananas it sells on its own farms in Latin America. It is the market leader in
bananas in Europe and is number two in the market in North America. Chiquita is using
its capabilities and core competencies in growing and distributing its brand bananas in its
international markets. However, in 2015 it was purchased by Brazil’s Cutrale Group which
added Chiquita brand bananas and fresh packaged salads to its fruit business in oranges,
apples, and peaches.^30
The third factor in Porter’s model of the determinants of national advantage is
related and supporting industries. Italy has become the leader in the shoe industry
because of related and supporting industries. For example, a well-established leather-
processing industry provides the leather needed to construct shoes and related prod-
ucts. Also, many people travel to Italy to purchase leather goods, providing support in
distribution. Supporting industries in leather-working machinery and design services
also contribute to the success of the shoe industry. In fact, the design services industry
supports its own related industries, such as ski boots, fashion apparel, and furniture.
In Japan, cameras and copiers are related industries. Similarly, Germany is known for the
quality of its machine tools and Belgium is known for skilled manufacturing (supporting
and related industries are important in these two settings also).
Firm strategy, structure, and rivalry make up the final determinant of national advan-
tage and also foster the growth of certain industries. The types of strategy, structure, and
rivalry among firms vary greatly from nation to nation. The excellent technical train-
ing system in Germany fosters a strong emphasis on continuous product and process
improvements. In Italy, the national pride of the country’s designers spawns strong indus-
tries not only in shoes but also sports cars, fashion apparel, and furniture. In the United
States, competition among computer manufacturers and software producers contributes
to further development of these industries.
The four determinants of national advantage (see Figure 8.3) emphasize the struc-
tural characteristics of a specific economy that contribute to some degree to national
advantage and influence the firm’s selection of an international business-level strategy.
Policies of individual governments also affect the nature of the determinants as well as
how firms compete within the boundaries governing bodies establish and enforce within
a particular economy.^31 While studying their external environment (see Chapter 2), firms
considering the possibility of using an international strategy need to gather information
and data that will allow them to understand the effects of governmental policies and
their enforcement on the nation’s ability to establish advantages relative to other nations.
Likewise, firms need to understand the relative degree of increased competitiveness the
entering firm might receive by examining the country resources necessary to help the
firm compete on a global basis in a focal industry.
Leading companies should recognize that a firm based in a country with a national
competitive advantage is not guaranteed success as it implements its chosen international
business-level strategy. The actual strategic choices managers make may be the most
compelling reasons for success or failure as firms diversify geographically. Accordingly,
the factors illustrated in Figure 8.3 are likely to produce the foundation for a firm’s com-
petitive advantages only when it develops and implements an appropriate international
business-level strategy that takes advantage of distinct country factors. Thus, these dis-
tinct country factors should be thoroughly considered when making a decision about
which international business-level strategy to use. The firm will then make continuous
adjustments to its international business-level strategy in light of the nature of compe-
tition it encounters in different international markets and in light of customers’ needs.
Lexus, for example, does not have the share of the luxury car market in China that it
desires. Accordingly, Toyota (Lexus’ manufacturer) is adjusting how it implements its