Advantage Sweden explores the evolution of competitive f irms, industries, and clusters of industries in the Swedish economy. It provides a new perspective on how and why Swedish firms have built world-leading positions in certain industries and industry clusters. The diamond model, outlining a system of four fundamental determinants underlying international competitive advantage, is applied to Swedish firms and industries. The book shows how pressures and challenges in the home environment, rather than a static environment without competition and stringent demands, are the key to long-run competitive advantage. Advantage Sweden illustrates the importance of tight linkages among related Swedish firms in the process of building competitive advantage. Contrary to popular belief, it shows the importance of a history of domestic rivalry and other pressures and challenges for innovation and upgrading in successful Swedish industries. Using examples from some of the cutting-edge Swedish multinational firms, the book examines how a company can extend and upgrade its competitive advantage through global strategies.