the competitive advantage of nations

291 Pages·2014·9.79 MB·English

THE COMPETITIVE ADVANTAGE OF NATIONS:
THE CASE OF GREECE
IOANNIS KONSOLAS
Submitted in Fulfilment of the Requirements for
the Degree of Doctor of Philosophy
of the University of London
Interdisciplinary Institute of Management
The London School of Economics and Political Science
1999
UMI Number: U61546B
All rights reserved
INFORMATION TO ALL USERS
The quality of this reproduction is dependent upon the quality of the copy submitted.
In the unlikely event that the author did not send a complete manuscript
and there are missing pages, these will be noted. Also, if material had to be removed,
a note will indicate the deletion.
Dissertation Publishing
UMI U615463
Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author.
Microform Edition © ProQuest LLC.
All rights reserved. This work is protected against
unauthorized copying under Title 17, United States Code.
ProQuest LLC
789 East Eisenhower Parkway
P.O. Box 1346
Ann Arbor, Ml 48106-1346
POLITICAL
AND
ABSTRACT
The present study applies Porter’s diamond framework, which identifies the
sources of international competitive advantage for particular industries in a country,
to the case of Greece. The diamond framework and Porter’s work on the
development of competitive economies are first summarised, their main applications
are presented and a critical evaluation is attempted using the various criticisms and
comments made by other researchers. Then, a short economic history of Greece since
its liberation and a brief description of Greece’s past and present economic
environment are followed by a review of the Greek literature on industrial
competitiveness. The competitive structure of Greek industrial clusters is further
explored with the help of trade and other relevant data. Using Porter’s methodology,
the competitive Greek industries are identified and categorised in clusters. A large
part of the study is devoted to five case-studies of particular Greek industries, namely
the cement, rolled aluminium products, tourism, men’s outerwear, and dairy
industries. The conclusions from the case studies, and the data analysis, are positive
for the applicability of the framework to Greece. Areas of concern, nevertheless, are
apparent, related to domestic rivalry, customer sophistication, as well as, the
relationship between firm strategy and structure, and rivalry. On the other hand,
Porter’s emphasis on geographic concentration, on the industry level of
competitiveness, and especially on the cluster concept are found to be justified. These
conclusions also provide the basis for the presentation of some suggestions
concerning the Greek State’s policies and the strategies of Greek companies.
2
TABLE OF CONTENTS
Pages
LIST OF TABLES 7
LIST OF FIGURES 8
ABBREVIATIONS 9
ACKNOWLEDGEMENTS 10
INTRODUCTION 11
CHAPTER 1: THE COMPETITIVE ADVANTAGE OF NATIONS 15
1.1 The Competitive Advantage of Nations: The Diamond Framework and
The Competitive Development of National Economies 15
The Diamond Framework 15
The Dynamics of National Advantage 20
The Competitive Development of National Economies 21
1.2 Applications of the Diamond Framework 24
1.3 Evaluation of the Competitive Advantage of Nations 33
General Assessment 34
Criticisms about the Study 38
Criticisms about the Diamond Framework 40
Critique of Porter’s Stages of Economic Development 45
Criticisms about the Methodology 48
CHAPTER 2: THE COMPETITIVE ADVANTAGE OF GREECE 52
2.1 The Greek Economic Environment: Past and Present 52
From Independence to the Second World War 53
The Reconstruction (1945-1952) 55
The High Growth Period (1953-1974) 56
The Current Period 1975-1998 60
2.2 Review of the Literature on Greek Industrial Competitiveness 72
Factor Conditions, Home Demand and Government’s Role 72
Greece and the EU 75
Porter’s Diamond 78
2.3 The Competitive Industrial Structure of Greece 79
Porter’s Methodology and its Application to Greece 79
Industrial Clusters in Greece 83
The Industry Case-Studies 95
CHAPTER 3: THE GREEK CEMENT INDUSTRY 99
3.1 Products and Processes 99
3
Cement Types and Uses 99
Production T echnology 101
3.2 Recent Trends in the World Market 103
3.3 The European Union: Customers and Competitors 104
3.4 Economic Characteristics of the Industry 107
3.5 The Greek Cement Industry 108
Historical Development 108
Major Competitors - Ownership Structure 109
Production - Exports - Imports 111
3.6 Sources of Competitive Advantage 114
Factor Conditions 114
Demand Conditions 119
Related and Supporting Industries 123
Firm Strategy, Structure and Rivalry 125
The Role of Government 130
The Role of Chance 131
3.7 Summary 132
CHAPTER 4: THE GREEK ROLLED ALUMINIUM PRODUCTS
INDUSTRY 135
4.1 Products and Processes 135
Aluminium: An Overview 135
Rolled Aluminium Products 137
Production T echnology 137
4.2 Recent Trends in the World Market 138
4.3 The European Union: Customers and Competitors 139
4.4 Concentration and Integration in Aluminium Production 141
4.5 The Greek Aluminium Industries 142
Historical Development 142
Major Competitors - Ownership Structure 143
Production - Exports - Imports 145
4.6 Sources of Competitive Advantage 147
Factor Conditions 147
Demand Conditions 151
Related and Supporting Industries 154
Firm Strategy, Structure and Rivalry 157
The Role of Government 160
The Role of Chance 160
4.7 Summary 161
CHAPTER 5: THE GREEK TOURISM INDUSTRY 164
5.1 The Tourist Product and the Tourism Industry 165
5.2 The World Market: Historical Developments and Recent Trends 166
5.3 The European Union: Customers and Competitors 169
5.4 Economic Characteristics of the Tourism Industry 170
5.5 The Greek Tourism Industry 172
Historical Development 172
Major competitors 174
5.6 Sources of Competitive Advantage 177
4
Factor Conditions 177
Demand Conditions 182
Related and Supporting Industries 184
Firm Strategy, Structure and Rivalry 185
The Role of Government 189
The Role of Chance 190
5.7 Summary 190
CHAPTER 6: THE GREEK MEN’S OUTERWEAR INDUSTRY 193
6.1 Products and Uses 193
6.2 Recent Trends in the World Market 195
6.3 The European Union: Customers and Competitors 197
6.4 Economic Characteristics of the Industry 198
6.5 The Men’s Outerwear Industry in Greece 199
Historical Development 199
Major Competitors 201
6.6 Sources of Competitive Advantage 203
Factor Conditions 203
Demand Conditions 206
Related and Supporting Industries 208
Firm Strategy, Structure and Rivalry 209
The Role of Government 212
The Role of Chance 212
6.7 Summary 212
CHAPTER 7. THE GREEK DAIRY INDUSTRY 216
7.1 Products and Uses 216
7.2 Recent Trends in the World Market 218
7.3 The European Union: Customers and Competitors 219
7.4 Economic Characteristics of the Dairy Industry 220
7.5 The Dairy Industry in Greece 222
Historical Development 222
Major Competitors 224
7.6 Sources of Competitive Advantage 227
Factor Conditions 227
Demand Conditions 230
Related and Supporting Industries 232
Firm Strategy, Structure and Rivalry 233
The Role of Government 23 5
The Role of Chance 23 5
7.7 Summary 236
CHAPTER 8: CONCLUSION 238
8.1 Implications of the Case Studies for the Diamond Elements 238
Factor Conditions 240
Demand Conditions 241
Related and Supporting Industries 242
Firm Strategy, Structure and Rivalry 243
The Role of Chance 244
5
The Role of Government 245
8.2 Overall Implications for the Applicability of Porter’s Framework 245
8.3 Implications for the Greek Economy 250
Government Policy 251
Company Strategy 253
APPENDIX 256
BIBLIOGRAPHY 273
LIST OF INTERVIEWS 288
6
LIST OF TABLES
Pages
2.1 Basic Indicators 1975-1980 62
2.2 Basic Indicators 1981-1987 62
2.3 Basic Indicators 1988-1996 63
2.4 Clusters of Internationally Competitive Greek Industries, 1992 84
2.5 Percentage of Greek Exports by Cluster and Vertical Stage, 1992 91
2.6 Percentage of Greek Exports by Cluster and Vertical Stage, 1985 92
3.1 Financial Results of the Greek Cement Companies for 1995 111
3.2 Greek Cement Factories and their Productive Capacity 129
4.1 Financial Results of Aluminium-Related Companies for 1995 145
5.1 Financial Results of Greek Travel Agencies for 1995 175
6.1 Financial Results of Men’s Outerwear Companies 202
7.1 Financial Results of the Greek Dairy Companies 226
8.1 Sources of Advantage in the Five Greek Industries 239
A.1 Clusters of Internationally Competitive Greek Industries, 1978 257
A. 2 Clusters of Internationally Competitive Greek Industries, 1985 265
7
LIST OF FIGURES
Pages
1.1 Porter’s Diamond Framework 16
2.1 Greek GDP, 1962-1995 64
2.2 Greek Trade Balance, 1962-1995 65
3.1 Cement World Export Trade, 1980-1992 105
3.2 Greek Cement Exports and Domestic Consumption, 1978-1996 122
4.1 Competitive Greek Aluminium-Related Industries 156
8