Demand Conditions According to Porter’s Diamond and Competitive Advantage of Firms of Pakistan Automotive Industry

The purpose of this study was to investigate theoretical and practical implications of Porter’s diamond demand conditions attribute improving the performance of firms in the automotive industry of Pakistan. Empirical based, positivism philosophy governs the study; pilot study was the integral part which entailed finalizing the self-administered questionnaire through which instrument reliability and validity established. Research methodology included various facets of empirical research. Data analysis and findings drawn by applying statistics, both descriptive and inferential. Justified by study findings safe conclusions drawn that Porter’s diamond demand conditions do have the strength to provide positive impact on the performance of firms operating in the auto industry. Through this study industry players arguably gain insight on diamond conditions context and improve the performance of firm. This is the first time such study was conducted in Pakistan. Demand conditions determinant study made contribution to theory and supported that Porter’s diamond demand conditions are viable component to be applied on industry like automotive. Practical implications include improving the performance of firms by effective use of demand conditions determinant by the practicing managers. Government can understand the concept of demand conditions and its positive implication for the industry. The diamond theory demand conditions attribute is tested for the first time in automotive industry of Pakistan. The study results are specific to the auto industry of Pakistan. Generalizability of results in other industries may be tested with further future research.