helen mba _2 - Nelson Mandela Metropolitan University

This is because firms compete globally and can achieve a large scale even if theirhome market is small. Porter explains that the role of segment structure at home isshaping the attention and priorities of a country’s firms. The relatively large segmentsin a nation receive the greatest and earliest attention from the country’s firms inallocating product design, manufacturing and marketing resources.Porter (1990:88) adds that one implication of the importance of segment structure isthat small nations can be competitive in segments that represent an important shareof local demand but a small share of demand elsewhere, even if the absolute size ofthe segment is greater in other nations. In some industries, the range of segments inthe home market influences competitive advantage. In highly engineered or tailoredproducts and services, exposure to a wide range of significant segments at homeprovides experience that can be used in entering foreign markets.Porter (1990:89) further argues that the presence of large segments in a nation thatrequires more sophisticated forms of competitive advantage, is particularly valuable.These large segments provide a visible path for local firms to upgrade theircompetitive advantage over time. Positions in such segments are more sustainable.Cummings (1998:3) differs from Porter’s statement and takes the standpoint that thefreight transport business is ruthlessly competitive. The industry is highly fragmentedand in nearly every country, the vast majority of vehicles are operated by numeroussmall companies that compete against the few large companies. In this environment,transportation companies have been searching for a competitive advantage that willgive them the edge over their rivals. This has led to various services such as globalcoverage, guaranteed delivery times for time sensitive materials, and total inventorymanagement.36