Facets of the Diamond Usually, all four conditions need to be favorable for an industry within a country to attain and maintain global supremacy.
Demand Conditions Demand conditions are the first feature in the theory. Both PLC theory and country similarity theory show that new products (or industries) usually arise from com of which has traditionally been in their home country, where they start up production. This was the case for the Italian ceramic tile industry after World War In a postwar housing boom, consumer wanted cool floors (which tile would provide) because of the hot italian climate
Factor Conditions Continuing our example, the second feature factor conditions (recall natural advantage the within the absolute advantage and factor-proportions theories)influenced both location. of tile to meet consumer demand and the choice of Italy as the production location. Wood was expensive, and most production factors (skilled labor, capital, technology and equipment) were available within Italy on favorable terms.